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

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 • Fund administration – Statements – Fees – Distributions – Additions • Planned giving support www.oregoncf.org

What and who is The Oregon Community Foundation? 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. 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 www.oregoncf.org

Many types of funds Discretionary Community Donor Advised Scholarship Designated www.oregoncf.org

Designated Funds The grantees are designated at the time the fund is established. www.oregoncf.org

T wo Types Donor Designated Fund Donor = Individual = Business = Organization Donor Grantee www.oregoncf.org

T wo Types Agency Endowment Fund Donor = 501(c)(3) Public Charity Donor = Grantee 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 www.oregoncf.org

Endowment What does it really mean? Long-term fund created to support an organization www.oregoncf.org

Endowment Two Considerations: • Creation – Donor? – Board of directors? • Use – Income stream? – Rainy day fund? www.oregoncf.org

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 www.oregoncf.org

Endowment Board Designated “All boards fear future boards.” - T ed Kaye Board Designated = Emergency Reserve 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 www.oregoncf.org

Investment Policy Objective T o retain (at a minimum) the purchasing power of the funds, while producing a reasonable return for distribution to meet current community needs. www.oregoncf.org

Spending Policy • Board reviews rate annually • Investment c ommittee’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 www.oregoncf.org

Investment Program Overview Board of Directors Independent Auditor Investment Investment Committee Consultant Main Pool Social Pool Investment Investment Managers Managers www.oregoncf.org

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 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. www.oregoncf.org

Main Investment Pool Allocation December 31, 2015 www.oregoncf.org

Social Investment Pool Allocation December 31, 2015 www.oregoncf.org

Volatility Matters www.oregoncf.org

www.oregoncf.org

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 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 www.oregoncf.org

THE OREGON COMMUNITY FOUNDATION Endowment Partners 101 Enter the Title of Your Presentation Here

Fund Administration Statements Fees Distributions Additions www.oregoncf.org

www.oregoncf.org

Fee Schedule Endowment Partner Funds Up to $1 million .50% Next $4 million .20% Above $5 million .10 % www.oregoncf.org

Planned Giving Wendy Usher Regional Director of Development Portland Metro www.oregoncf.org

Charitable Gift Annuity www.oregoncf.org

Thank you for coming! The slide deck can be found at oregoncf.org/donors/endowment-partners www.oregoncf.org