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Enter the Title of Your Presentation Here March 3, 2016 Agenda - - PowerPoint PPT Presentation

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THE OREGON COMMUNITY FOUNDATION Endowment Partners 101 Enter the Title of Your Presentation Here March 3, 2016 Agenda Community foundations The Endowment Partners Program Definition of endowment Investment Program Break

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Enter the Title of Your Presentation Here

THE OREGON COMMUNITY FOUNDATION

Endowment Partners 101

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www.oregoncf.org

March 3, 2016

Agenda

  • Community foundations
  • The Endowment Partners Program
  • Definition of endowment
  • Investment Program
  • Break
  • Fund administration

– Statements – Fees – Distributions – Additions

  • Planned giving support
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www.oregoncf.org

What and who is The Oregon Community Foundation?

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www.oregoncf.org

Community Foundations

Wikipedia: Instruments of civil society designed to pool donations into a coordinated investment and grant making facility dedicated primarily to the social improvement of a given place.

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www.oregoncf.org

The Oregon Community Foundation

Mission To improve life in Oregon and promote effective philanthropy. Publicly supported 501(c)(3) Donors

  • Individuals
  • Families
  • Businesses
  • Nonprofit organizations
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www.oregoncf.org

Many types of funds Discretionary Community Donor Advised Scholarship Designated

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Designated Funds

The grantees are designated at the time the fund is established.

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T wo Types

Donor = Individual = Business = Organization Donor Grantee

Donor Designated Fund

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T wo Types

Donor = 501(c)(3) Public Charity Donor = Grantee

Agency Endowment Fund

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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

Endowment

What does it really mean? Long-term fund created to support an organization

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www.oregoncf.org

Endowment

Two 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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Endowment

Board Designated “All boards fear future boards.”

  • T

ed Kaye

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 in the long term

Model Considers

  • Investment
  • Expenditure
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www.oregoncf.org

Investment Policy

Objective

T

  • retain (at a minimum) the purchasing power
  • f the funds,

while producing a reasonable return for distribution to meet current community needs.

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Spending Policy

  • Board reviews rate annually
  • Investment committee’s 10 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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www.oregoncf.org

Investment Program Overview

Board of Directors Main Pool Investment Managers Social Pool Investment Managers Investment Committee Investment Consultant

Independent Auditor

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Investment Committee

William Berg, Chair, Portland Patrick Criteser, Board Member, Tillamook Lyn Hennion, Medford Karen Harding, Portland Duane McDougall, Board Member, Lake Oswego William Moffat, Portland Garth Nisbet, Portland Ronald Parker, Portland Eric Parsons, Portland William Rutherford, Portland Benjamin Whiteley, Portland Robert Wulf, Portland

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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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Main Investment Pool Allocation

December 31, 2015

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Social Investment Pool Allocation

December 31, 2015

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Volatility Matters

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Investment Returns

for periods ended December 30, 2015

Trailing Trailing Trailing Trailing Quarter 1 Year 3 Years 5 Years 10 Years

Main Investment Pool

OCF 2.4% -1.5 4.9% 4.5% 4.9% OCF Custom Benchmark 2.3% -2.3 4.2% 3.8% 3.8%

Social Investment Pool

OCF 5.0% 1.9 7.7% 6.4% OCF Custom Benchmark 3.5% -0.9 6.3% 5.8%

Returns are net of investment management costs

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www.oregoncf.org

Market Update Cambridge Associates

Fourth Quarter 2015

– US Federal Reserve announced first rate increase since financial crisis. – European Central Bank expanded quantitative easing.

  • Brief global rally in October fizzled in November & December

– Q4 best for developed markets in 2 years

  • S&P 500: 7%
  • European Monetary Union: 6.5%
  • Japanese equities: 9.8%
  • Emerging Markets: trailed at 1.6%

– January 2016 equity markets off to very rough start.

  • Global fears regarding China’s economy
  • Drop in oil prices
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Enter the Title of Your Presentation Here

THE OREGON COMMUNITY FOUNDATION

Endowment Partners 101

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www.oregoncf.org

Fund Administration

Statements Fees Distributions Additions

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www.oregoncf.org

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Fee Schedule

Endowment Partner Funds

Up to $1 million .50% Next $4 million .20% Above $5 million .10 %

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Planned Giving

Wendy Usher Regional Director of Development Portland Metro

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Charitable Gift Annuity

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Thank you for coming!

The slide deck can be found at

  • regoncf.org/donors/endowment-partners