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Ente r the T itle o f Yo ur Pre se nta tio n He re
THE OREGON COMMUNITY FOUNDATION
www.oregoncf.org
Ente r the T itle o f Yo ur Pre se nta tio n He re Klamath Falls - - PowerPoint PPT Presentation
Ente r the T itle o f Yo ur Pre se nta tio n He re Klamath Falls - - PowerPoint PPT Presentation
THE OREGON COMMUNITY FOUNDATION Endowment Partners 101 Ente r the T itle o f Yo ur Pre se nta tio n He re Klamath Falls July 12, 2017 Elizabeth Carey, Vice President and Chief Financial Officer Cristina Sanz, Regional Director for
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www.oregoncf.org
Agenda
- Endowment Partners Program
- Fund Administration
- Endowment Defined
- Investment Program
- Deferred giving support
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www.oregoncf.org
The Oregon Community Foundation
Mission To improve lives for all Oregonians through the power of philanthropy.
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www.oregoncf.org
The Oregon Community Foundation
Many types of funds – Discretionary – Advised
- Donor
- Community
- Corporate
– Scholarship – Designated
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www.oregoncf.org
Designated Funds
The grantees are designated at the time the fund is established.
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www.oregoncf.org
Two Types
Donor = Individual = Business = Organization Donor Grantee
Donor Designated Fund
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www.oregoncf.org
Two Types
Donor = 501(c)(3) Public Charity Donor = Grantee
Agency Endowment Fund
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www.oregoncf.org
Endowment Partner Funds
Primary Benefits
- Access to investment expertise
- Create efficiencies
- Access to planned giving advice and services
- Advice on complex gifts
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www.oregoncf.org
Fund Administration
Statements Fees Distributions Additions
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www.oregoncf.org
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www.oregoncf.org
Fee Schedule
Endowment Partner Funds
Up to $1 million .50% Next $4 million .20% Above $5 million .10 %
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www.oregoncf.org
Endowment
Long-term fund created to support an organization
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www.oregoncf.org
Endowment
T wo Considerations:
- Creation
– Donor? – Board of directors?
- Use
– Income stream? – Rainy day fund?
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Endowment
True Endowment = Donor Restricted
- Obligated to maintain in perpetuity
- Cannot fully expend in the short term
- Annual income stream
- Revenue diversification
- Additional restriction to use of income
- OCF maintains arm’s length
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www.oregoncf.org
Endowment
Board Designated “All boards distrust their successors.”
Jerry Westersund
Board Designated = Emergency Reserve
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www.oregoncf.org
Endowment
OCF’s Definition
- Fund maintained in perpetuity
- Annual income stream
- Goal = to manage the fund in a prudent
manner as to not exhaust it in the long term.
Model Considers
- Investment
- Expenditure
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www.oregoncf.org
OCF’s Investment Program
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www.oregoncf.org
Investment Objective
To retain (at a minimum) the purchasing power
- f the funds
AND When possible increase the purchasing power
- f the funds
WHILE Producing a reasonable return for distribution to meet current community needs.
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www.oregoncf.org
Spending Policy
- Board reviews rate annually
- Investment committee’s 10 year projection
- Target 9% return
– If 9% or higher 5% payout rate – If below 9% 4.5% payout rate
- Basis = 13 quarter trailing average of market values
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Investment Program Overview
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www.oregoncf.org
Investment Committee
William Berg, Chair, Board Member Portland Lyn Hennion, Medford Karen Harding, Portland Chris Magana, Portland Kirby Dyess, Board Chair Beaverton Duane McDougall, Lake Oswego Garth Nisbet, Portland Ronald Parker, Portland Eric Parsons, Out of State William Rutherford, Portland Lane Shetterly, Board Member Dallas Duncan Wyse, Board Member Portland
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www.oregoncf.org
Endowment Investment Model
Three tenets
– High allocation to equities is generally required for most spending levels. – Broad diversification mitigates risk inherent with high equity allocation – Fixed income supports spending during periods of prolonged economic contraction or deflation.
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www.oregoncf.org
Why Equities?
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Main Investment Pool Allocation
March 31, 2017
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Volatility Matters
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Volatility Matters
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T wenty-four-year Growth of an Endowment Partner Fund 1993-2016
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Investment Return Summary May 31, 2017
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www.oregoncf.org
Deferred Giving for Endowment Partners
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www.oregoncf.org
How Life Income Gifts Work
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www.oregoncf.org
Our Partnership
Gift Type Minimum Gift Designation of Residuum/Remainder Notes Charitable Gift Annuity (CGA) $25,000
- Residuum designated to nonprofit
partner to add to an existing EP Fund
- Create a new EP Fund, if residuum
meets current funding amount
- Minimum age of the annuitant is 60
- 55 and older eligible to set up
deferred CGA
- No fee
Charitable Remainder Trust (CRT) $100,000
- For OCF to serve as trustee, 50% of
the charitable remainder value must be designated to nonprofit partner to add to an existing EP Fund
- Remaining 50% may be distributed
directly to nonprofit partner
- New EP Fund may be created if the
net present value of the remainder interest for OCF is greater than or equal to the current fund minimum ($25K)
- Minimum age of beneficiary is 55
- Payout percentage to beneficiary
between 5% and 7%
- Fees for preparation of trust
document
- Expenses related to carrying costs
- f unmarketable assets prior to
their sale
- Administrator fee approximately
80 bps annually
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www.oregoncf.org
For questions regarding Deferred Giving for Endowment Partners please contact Cristina Sanz csanz@oregoncf.org 541.773.8987
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www.oregoncf.org
Thank you for coming!
The slide deck can be found at
- regoncf.org/donors/endowment-partners