Kaye M. Ridolfi Ginger F. MlakarKristin Warzocha Senior Vice President of Advancement Senior Counsel & Director, Donor Relations Vice President of External Affairs The Cleveland Foundation The Cleveland FoundationThe Greater Cleveland Food Bank Organizational Endowments: Recruiting Agency Endowments, Pitfalls, and Approach Sunday, October 19, 2014

Agenda Introduction Establishing and Growing an Organizational Fund Benefits and Challenges Organizational Partner Perspective

3 What is an Organizational Fund? Contractual arrangement between the foundation and a IRC Section 501 (c)(3) organization Established as either an agency account, fully accessible at any time for any reason by your Board, or as a true endowment Can be effectively combined with your efforts to build endowment or reserve funds additional contributions of any size can be made at any time with full tax advantages

6 Seed MoneyAgreementPartnership Establishing an Organizational Fund

5 Fund Growth Investment Growth Additional Contributions Distribution Seed Money Fund Growth

Nationwide Data Summary ► Data Sources: ●CF Insights Benchmark Data: Approximately 240 organizations actively update data ●Individual foundation websites, annual reports or other publications ●Columbus Survey 2013 (For total foundation assets) ► Foundations focused on: ●From CF Insights focused on organizations listing endowment/agency data of $30 million or higher ●And/or top 20 foundations by total assets ► Findings: ●CF Insights shows 100+ organizations with organizational fund assets of $1 million or higher ●The foundation with largest assets found was Oklahoma City ~$165 Million, 300+ funds ●Cleveland Foundation Org Fund Assets = >$94 Million and 195+ funds. Fund sizes range from $10,000 to $40 million (Deaconess)

Benefits to an Organization Planned Giving Helps sustain a nonprofit organization’s financial stability over the long-term Broadens donor giving possibilities Opportunity available to diverse group of potential contributors

Benefits to an Organization Leveraging Expertise Assigned donor relations staff person Being part of nearly 200 non-profit partners making a difference in Greater Cleveland Maximize long-term returns by contributing to larger investment pools exposed to the market Customized service

Benefits to an Organization Increase in Options Acceptance of private stock, real estate and other unique assets Direct Giving through Cleveland Foundation website Educational forums Fund Marketing  Planned gift presentation and calculations  Website  Brochure

Benefits to an Organization Financial Stewardship Recordkeeping Investment Oversight Access to Online Service Gift Acknowledgements to donors

Summary of Partnership Opportunities *build endowment funds that grow and benefit our community forever. *offer donor involvement and help donors create an individual or family legacy. *local organization meeting a broad range of changing local needs. *provide a simple way to fulfill charitable interests, with low-cost administration. *deliver personalized donor service that is flexible and responsive to unique needs. *accept a wide variety of assets. *offer maximum tax advantage. *preserve donor intent even when community needs and organizations change. *known for prudent stewardship and investment practices. *offer full disclosure and transparency.

Challenges Competition Other providers Resistance to change Fees Profitability Increased staff time Agency vs. endowment funds

Organizational Partner Perspective Greater Cleveland Food Bank

Who Are We? Founded in 1979; Currently 100+ employees, $20 million budget Programs include mobile pantries, children’s nutrition initiative, summer food service, and SNAP outreach. Coordinates annual Harvest for Hunger campaign Largest hunger relief organization in Northeast Ohio; Serving six counties – Cuyahoga, Lake, Geauga, Ashtabula, Richland, and Ashland Provided access to nearly 45 million meals in 2014 through more than 750 partner agencies

Organizational Partner Perspective Greater Cleveland Food Bank Why we affiliate with the Cleveland Foundation: Financial management expertise and guidance Planned giving and marketing services Reputation

Organizational Partner Perspective Greater Cleveland Food Bank What has happened since : Endowment Growth 2008$229, $243, $344, $440, $444, $606, $965,919 (as of 6/30/2014)

Organizational Partner Perspective Greater Cleveland Food Bank What has happened since : Growth of Tomorrow’s Harvest Legacy Society Currently 75 members (46 living, 29 deceased) More than $600,000* in realized planned gifts in FY14 (*includes single estate gift of more than $500,000)

Questions?