CATHOLIC FOUNDATION CHANGES JUNE 25, 2019 SAINT JOHN XXII PARISH 1 - PowerPoint PPT Presentation

CATHOLIC FOUNDATION CHANGES JUNE 25, 2019 SAINT JOHN XXII PARISH 1

MEETING AGENDA Opening Prayer (Rodney Schuster) 6:00 Welcome & Opening Comments (Phil Renda) 6:00 – 6:15 Food & Refreshments (All) 6:15 – 6:30 Intro and Overview (Phil Renda) 6:30 – 6:50 Changes to Foundation (Tom Antonini) 6:50 – 7:10 Forms and Statements (Randy Englund/Erin Adler - KeyBank) 7:10 – 7:30 Investment Options and Performance (Andrew Zach - FEG) 7:30 – 7:45 Management Corp Role (Phil Renda) 7:45 – 8:00 Questions Closing Prayer (Rodney Schuster) 2

PRESENTATION TEAM Phil Renda – Diocese Mgmt. Corp: Chief Operations/Finance Officer Tom Antonini – Diocese Mgmt. Corp: General Counsel/Director Risk Management Randy Englund – KeyBank: Client Strategist Associate Erin Adler – KeyBank: Trust Officer Andrew Zach – Fund Evaluation Group: Vice President Other Diocesan Personnel Present: Amanda Fisher, Katie Kellmurray, Dave Reed, Rene Schmidbauer, Rodney Schuster, Dave Williams 3

OVERVIEW • Background of Catholic Foundation • Diocese Restructuring – Phase 1 and Phase 2 • Diocese Strategic Plan – Pillar 6 Developing Financial Resources • Goals for taking this Action: o Align structure with purpose o Clarify and simplify operations/functions o Enhance protections and support 4

BACKGROUND CATHOLIC FOUNDATION • Non-profit 501(c)(3); Established in 1988 • Purpose: o Entity for Parishes, Schools, etc. to invest restricted/unrestricted funds o Leverage trustee, investment mgmt., and endowment fees o Conflict of interest avoidance o Ensure USCCB Socially Responsible Investing (SRI) compliance • Changes over time: o Leadership and staff changes o Annual Catholic Appeal (ACA) and National collections coordination 5

Diocese of Toledo Structure Updated 3/ 9/ 18 College of Consultors Senior Staff Bishop Finance Council Diocese of Pastoral Council Presbyteral Council Toledo Building Commission Education Council Board of Directors Board of Directors Board of Directors Board of Directors Board of Directors Diocese of Toledo The Catholic Catholic Charities Catholic Rom an Catholic Diocese Ser v ice Ag r eem ents Managem ent Pensions Foundation Diocese of Toledo Cem eteries of Toledo in Am erica Corporation Dep a r tm ents Offices Fina ncia l Tr usts Building Serv. Catholic Education Deposit and Loan Pastoral Cent. Finance & Accounting Clergy, Consecrated Health &Benefits Life & Vocations Hum an Resources Perpetual Care Inform ation Com m unica-tions Technology Properties Internal Audit/ Discipleship & Fam ily Com pliance Property & Life Casualty Legal/ Risk Managem ent Office of the Bishop/ Chancellor 6/26/2019 6 Serv ices to a ll Pa rishes, Schools a nd Ecclesia stica l Orga niza tions

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CHANGES TO THE FOUNDATION Tom Antonini – Management Corporation 6/26/2019 9

CHANGES TO THE FOUNDATION Out with the Old The Catholic Foundation of the Diocese of Toledo 6/26/2019 10

CHANGES TO THE FOUNDATION In with the New The Diocese of Toledo Catholic Investment Trust 6/26/2019 11

BACKGROUND Basic Concepts Trust Law 6/26/2019 12

THE CHARITABLE TRUST RELATIONSHIP Donor Beneficiary Charitable Entity 6/26/2019 13

TYPES OF GIFTS Gifts to a Charitable Entity • Unrestricted • Restricted • Restricted with Endowment Features 6/26/2019 14

CREDITOR ATTACKS Donor Beneficiary Charitable Creditor Entity 6/26/2019 15

THE BEST DEFENSE Protection from Creditors • Existence of a trust relationship • Assets of fund have been properly handled 6/26/2019 16

THE FOUNDATION Foundation Types of Parish/School funds in Foundation • Unrestricted • 3 rd Party Restricted • Self-Restricted 6/26/2019 17

THE FOUNDATION Foundation • 501(c)(3) corporation • Foundation funds held by KeyBank as trustee for the benefit of various participants • Maximize investment • Socially responsible investing • Corporate structure provides a firewall against creditor attacks 6/26/2019 18

WHY CHANGE? Corporation v. Trust • Bishop is sole member of Foundation corporation, with significant authority over its governance • Existence of common control by Bishop leaves open the possibility that all of the distinct entities will be treated as a single enterprise • Trust model offers enhanced security 6/26/2019 19

BENEFITS OF THE LEGACY TRUST Legacy Trust Feature • Consistent with our Diocesan phase one restructuring • The Bishop retains the right to appoint trustees • Enhanced statutory protection from creditors: o Shorter statute of limitations o Must prove intent to defraud by clear and convincing evidence o Loser pays attorney fees 6/26/2019 20

THE CATHOLIC INVESTMENT TRUST Catholic Investment Trust Types of accounts in the Trust: • General – no material limitations on use of funds • Designated – parish/entity sets aside general revenues for a particular ministry • Restricted – third party donations to fund particular purpose or ministry of parish/entity • Endowed – designed to provide support on a permanent basis by limiting distributions 6/26/2019 21

THE CATHOLIC INVESTMENT TRUST What does this mean for my parish? • The Diocese is not touching your account – assets remain assets of the parish, which can be removed by the parish • Your separate sub trust account in KeyBank will stay just that • Assets safeguarded, maximize investment, SRI • Any donor or parish restrictions on the Account will remain the same 6/26/2019 22

THE CATHOLIC INVESTMENT TRUST Next Steps: • Accounts to be categorized based on supporting documents • If you feel Account was incorrectly categorized, tell us • Missing or no charter? • New account set-up 6/26/2019 23

A NEW FEATURE Self-Endowed Feature: • Self-Funded Endowment o parish creates a fund to receive contributions and support the parish on an ongoing basis • Third-Party Settled Endowment o third party donor creates a fund to receive contributions and support the parish on a permanent basis 6/26/2019 24

CHANGES TO THE FOUNDATION Questions? 6/26/2019 25

FORMS AND STATEMENTS Randy Englund – KeyBank Erin Alder – KeyBank 6/26/2019 26

KEYBANK’S ROLE Custodian and Trustee • Coordinate with the Administrator to ensure participant transactions comply with administrative requirements of the Trust • Provide record keeping via statements and online KeyLink access • Establish new accounts for participants in the trust • Monthly investment per participants elections • Process outgoing payments to participants (as authorized by Diocese) • Process incoming stock gifts (calculate values and distribute to participant) 6/26/2019 27

CHANGES TO FORMS • Updated Forms o New Account Set Up Form o Adoption Agreement/Charter o Account Update Form ( Contact Update and Investment Update) o Deposit Withdrawal Forms • All forms are to be emailed to catholic_diocese@keybank.com • Email requests must be Cc’d to your parish pastor AND Rene Schmidbauer @ rschmidbauer@toledodiocese.org • Forms are located at: https://toledodiocese.org/page/catholic- foundation#_welcome 6/26/2019 28

NEW ACCOUNT SETUP 6/26/2019 29

ADOPTION AGMT AND CHARTER 6/26/2019 30

ACCOUNT UPDATE FORM 6/26/2019 31

DEPOSIT/WITHDRAWAL FORM 6/26/2019 32

KEYLINK INFORMATION • KeyLink – Online access to statements, balances and transaction information. • Once KeyLink access is established the invested organization is given a username and password and reference guide supplied directly from KeyBank. • KeyLink can be accessed at the follow web address: https://keylinklogin.key.com/mfr • KeyLink Support can be reached at: 1-800-539-8458 • Clean up - confirming correct people have access to statements and KeyLink. 6/26/2019 33

Statement Overview Questions: Contact Erin Adler at KeyBank 216-471-2595 Erin_k_adler@keybank.com 6/26/2019 34

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INVESTMENT OPTIONS & PERFORMANCE Andrew Zach - FEG 6/26/2019 44

FEG PROFILE ESTABLISHED Founded in 1988 OWNERSHIP 100% employee-owned by 100% FEG employees STRUCTURE FEG has $69.6B in assets under advisement 1 SIZE CLIENT BASE Nonprofit clients represent 76% of FEG institutional client assets Clients in 40 states; headquartered in Cincinnati with offices in Dallas LOCATIONS and Indianapolis Traditional Consulting, Outsourced Chief Investment Officer (OCIO), SERVICES Hybrid Solutions, Research 1 As of September 30, 2018, Assets under Advisement (AUA) include discretionary and non-discretionary assets of FEG and its affiliated entities. These assets are typically non-discretionary. Some asset values may not be readily available at the most recent quarter end, therefore the previous quarter's values were used for this calculation. The values may be higher or lower, depending on the current market conditions. Of the $69bn AUA, FEG's total assets under management (AUM) are $6.6bn which includes discretionary ($4.87bn) and non-discretionary AUM ($1.73bn). 6/26/2019 45