Nonprofits and endowments: A success story

In recent months and weeks I have been invited to visit with nonprofits in small towns and rural communities across western North Carolina to discuss their endowment funds. Maybe their board of directors transitioned, and they need a refresher course about their endowment. Maybe they are considering establishing an endowment, and their board is curious about utilizing the services of their community foundation to house the endowment.

But, interestingly, I am beginning to hear the sound of a pattern evolving. The pattern might look like this.  An agency is considering a capital campaign (for now long-deferred capital needs).  What a grand time to establish an endowment campaign for your organization or grow your endowment — through your capital campaign.

Here is the scenario. Your organization is building – so it is a bricks and mortar capital campaign. Can you imagine a better time to grow your endowment in support of the new building, the expansion, new programs in the new building?  Consider the wonderful opportunity to grow your endowment by designating a percentage from your capital campaign. Can you imagine how pleased your donors would be to learn that you are not only building for needs now, but planning ahead to fund your organization from your agency’s endowment in the future?

Your donors are likely to become very familiar and comfortable with your endowment through the process, which only increases the opportunity for future gifts. 

And it does not stop there. The opportunity to market your endowment fund can then become an integral component of your overall annual resource development plan. 

If your nonprofit agency would like to learn more about growing your existing endowment with us, contact me or Beth Boney Jenkins to discuss the opportunities to market your agency’s endowment.  We can help, and we can share success stories.  And, if by chance, your agency is planning a capital campaign, consider including funding for an endowment. 

Wm. Shakespeare, Equity Analyst?

"Life is but a walking shadow, a poor player that struts and frets his hour upon the stage, and then is heard no more; it is a tall tale, told by an idiot, full of sound and fury, signifying nothing."  Macbeth, Act V, Scene V

Recall with me, if you will, 12/31/2010, the broad market S&P 500 Index closed the year at 1,257.64.  Fast forward to 12/30/2011 (last trading day of the year), and the S&P 500 closed at 1,257.60.  The index dropped four basis points (0.003%!), essentially flat, so 2011 must have been a boring year, right?

Cue the Bard. While U.S. corporates cranked out record profits, amassed unprecedented levels of cash and stock valuations (P/E ratios for all you gear-heads), dropped to amazingly low levels, the financial markets weathered exceptional fits of volatility on geo-political issues in North Africa and the Middle East, Japan's natural disasters, the European debt crisis (du jour) and political gridlock in Washington. And the market only moved four basis points - 4 bps!  That's the "full of sound and fury, signifying nothing" part.

In a spirit of equal time, the blue chip Dow Industrials was up 5.5% while the tech-heavy NASDAQ slipped 1.8% for the year. U.S. equities outshone world markets though, with Europe exchanges off mid-to-high teens and Asian houses down high teens to mid-twenties. 

Reminds me of the comment I read in the business section of a Canadian newspaper in September: "The U.S. economy is the best looking horse at the glue factory.”  While many bemoan the speed and strength of the recovery, for the past three years, equities have tracked post-WWII recession performance remarkably well -- great the first year, good the second then flat the third.

So what about 2012?  Fundamentals look quite positive for the U.S., but as 2011 demonstrated, results pale in the light of headline news.  We have many of the same issues as 2011, hopefully not another earthquake/tsunami, though the presidential primaries and election will bring a whole new dynamic to the market. 

O.K., so here's my forecast: fundamentals win out (actually, equities stage a furious comeback after election day -- whatever the result) and the S&P 500 ends the year at 1400, up about 11%.

Many best wishes to all for an extremely bright 2012, and let's get out there and serve the philanthropic needs of the citizens of North Carolina!

A year of good intentions

This may have happened to you. After a routine annual exam you are called back due to some questionable results.  You are asked to get additional tests.  For me it was three days before Christmas. 

If you are like me, you go from carefree optimism to belief that you are about to be diagnosed with a terminal condition that will change everything.  I already knew I was not strong or brave enough to handle this. 

In those days I made several promises, and vowed to change some behavior. Maybe a little bargaining, but mostly realization that I take so very much for granted.  Instead of squandering time and stressing over things that really do not matter, shouldn’t I have been more grateful?  Shouldn’t I have let those small things go, discarded some of the petty grudges, been a better person??

Luckily for me the additional tests indicated no problem.  I was free.  But many of my friends and family have not been so lucky.  I left the doctor’s office feeling incredibly grateful.  The sky looked bluer, the air was cleaner, my husband was even handsomer!  Life was good.  From the despair of the previous day I emerged feeling incredibly lucky. 

But what about all those promises and good intentions?  What if I decided to truly live each day to the fullest and let go of those “small” things?  In the heat of the moment, this was an easy pledge to make.  It is not so easy in the day to day.  However, that is my intention this year -- and what I hope for you.  Spend time on those things that are important, be grateful for what you have and to let go of those negative thoughts.  I will let you know how it goes. . .

Guilt by comparison

“… more than seven in 10 women (71 percent) say they feel badly they can’t give more to charity this year, compared to 51 percent of men.”

 -- American Red Cross Holiday Giving Poll, October 2011

Each Christmas our church (Presbyterian) collects The Joy Gift – a denomination-wide offering that provides financial assistance to current and former church workers and their families.  A portion of the Joy Gift also provides scholarships for deserving students wishing to attend certain Presbyterian-related colleges and schools.  For “the poor in circumstance or in spirit,” the Joy Gift is a great blessing indeed.    

Whether directly or subliminally, many of us were taught early that giving should always be done joyfully and with a glad heart.  Giving from gratitude or compassion are also on the “approved” list of motivations.  Giving from a guilty conscience?  Not so much.

But let’s face it: guilt  is often a great motivator.  And given the survey finding above, women’s guilt meters may be set a tad higher when it comes to notions of charitable giving.  (Perhaps that’s the reason it took Ebenezer Scrooge THREE visitations from ghostly apparitions before he opened ye olde checkbook.)

At this time of year, thoughts of giving are uppermost in most of our minds and hearts.  And frankly, whatever prompts you to make that charitable donation (an abundance of compassion, need for tax relief, yes, even guilt) – in the end, the impact is the same.  

And your preferred charity doesn’t care whether you’re male or female.   Still, I can’t help but take a perverse joy in scoring higher on the compassion meter than old Ebenezer. 

No Christmas socks for me!

And so it has begun! Well actually, according to the retail calendar, the holidays actually began sometime early in October.  As we head into what can sometimes be a hectic stressful season, I plan to take time to remind myself daily about what is truly important about the holidays.

I just read that in addition to Black Friday, we now have Cyber Monday, Green Tuesday and Magenta Saturday.  Really???  

Several weeks ago I was at the local Target, where the holiday section of lights, candy, gifts, decorations and cards took up an entire corner of the store. I was in the socks section where I overheard an exasperated mother telling her young boy: “NO, I am not getting you Christmas socks! We are Jewish!”

I had to smile as we are truly bombarded with messages about the holidays. And many are asking us to buy something or to be something different than who we are.  The constant sales messaging during this time is relentless. It takes effort to stay focused on our own values. 

We have all heard the sad statistics that tend to escalate during the holidays: suicide and family violence are generally on the rise during this time. We know that spending often outpaces resources at hand.  In this difficult economy with so many of our friends and neighbors un- or under-employed, the holidays just add to the stress.  When I think back on my memories of holidays growing up, I remember laughter and family and singing.  I remember my grandfather with his video camera, and blinding lights that always made my sister and me look as startled as two deer in headlights.  I remember only a handful of those gifts, but what I truly recall is the feeling of the holidays and the togetherness of our family.  I am so grateful to have these memories, especially in a year when loss seems so close. 

Each year Lindsay, Ted and I make donations in honor of our family members. We believe this gift honors them -- and I think honors the meaning of our holiday season.

My wish for each of you is to spend time with people you love, to reach out in love and kindness and to hug those who are important to you, to thank someone for their kindness and to take time to treasure what is truly important. 

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A stark and stunning look at priorities

I was stunned to hear of this divorce . . .

Last week we all learned that celebrity extraordinaire, Kim Kardashian and her new husband were divorcing after a mere 72 days of married bliss. 

Stunning you may say. But actually what really floored me was learning that they had generated almost $18 million through product endorsements, public access and other options through their wedding.

Really?!?  Eighteen million dollars?   How can our priorities be this misplaced, to financially award “celebrities” (and honestly, what exactly is she famous for, anyway?) for making a personal, sacred day so public? And “for sale?”

This made me think: if we took this same amount of money and applied it toward charitable intentions -- what could we accomplish? I thought I would pose the question to a couple of our nonprofit partners, and boy did I learn a lot!

Danita Morgan, who heads development for Wake County-based Urban Ministries, told me that Urban Ministries could apply that same $18 million to operate for nine years, serving more than 24,000 people each year (for a total of 216,000 people!); help 18,000 homeless women move into stable housing and a productive life;  provide medical care for a year for 21,600 uninsured people who are living in poverty; write 25,992 prescriptions for uninsured people; and provide a week’s worth of groceries for nearly a million families in need. WOW!

When I talked with Ashe County Habitat for Humanity, I learned that with $18 million, of course the number of homes could be increased -- but also entire sections of the community could be built or replaced!  This would include the purchase of land and infrastructure:  roads, sewers, community wells, and so on.  The same $18 million is enough to construct 140 Habitat homes and purchase the land and install the required infrastructure.  Economies of scale would offset the costs of management. 

The implications of a large infusion of capital like this would be far-reaching, touching our economy, improving unemployment statistics and changing not just lives, but entire communities.

With respect to the number of people impacted, we can start with the 140 homes with an average of, let’s say, 3.5 family members.  That comes to 490 residents.  We can add to that an average of 100 individuals and repeat volunteers per home easily effecting as many as 14,000 people!

Pretty amazing stuff. What struck me most about these “what-if” conversations were the wide-ranging ripple effects that a single contribution of this size could create. Lives would be changed, communities would be strengthened, economies could grow again.

So, I’m here to propose that Kim and what’s his name agree to “sell the rights to their divorce.” Imagine…live television coverage of proceedings (maybe even covered by Nancy Grace!), book sales, videos, People magazine covers, Barbara Walters interview…it would surely surpass $18 million.

And, in a gesture of profound humanitarian commitment and selfless dedication to their fellow man … they give all of the proceeds to charity! It’s an idea whose time has come … talk it up, spread the word, maybe we can make it happen!

The big question: How to widen and engage?

For years, I dreaded the end of summer – who wouldn’t miss soaking up glorious sunny days and daylight well into the evening hours?  But there is something about fall and how it encourages reflection that I have to say is very appealing.  A perfect opportunity presented itself after returning from a recent conference with other community foundations across the country. 

What I’ve come away with after reading over my notes and thinking about the conversations boils down to a core question for me.  A question that gets to the heart of what our Foundation is really all about – how to strengthen the communities in our statewide network? 

But, then I’ve asked myself, isn’t this a core question for so many other organizations and individuals who live and work in these communities? Of course it is  -- nonprofits, local governments, faith-based organizations, civic groups grapple with this just as we do. And therein lies both the potential power we have and the major challenge – how can we work together, drawing up each other’s expertise and talents for the greater good of the places we live in and care about so strongly? How can we blend our collective passions and energies to create vibrant communities?

At the conference, I jotted down a note shared by another community foundation that I’ve  thought about a lot. It’s another question – how do we widen our circle and deepen our engagement?  It’s become for me “a reflection keeper” and as we get more into the rhythm of this season’s changing, vibrant colors, I invite you to reflect upon it, too.

Sometimes our paddles feel small -- but usually they're just what we need

Fall is finally here, and about time! It has been a long, hot summer.  Many of us in North Carolina have been through a tornado, an earthquake, a hurricane and a flood. (Are locusts next?)

Our disaster relief efforts have been all-consuming to many on our team. But marketing, administrating and granting these funds have combined to provide an incredible opportunity for us to illustrate the effectiveness of our model and the power of our statewide network.  It has also been an opportunity for all parts of our organization to come together to work for our state, and all on our team have shone.  We have learned much, and I want to pay special tribute to Rod Martin, who chairs the statewide grants effort, and all who serve on that committee.

Aside from the disasters, our summer at NCCF has been busy and active. The pace has been brisk in terms of new funds and growth in existing funds; community grants processes replete with meetings, reviews, receptions and celebrations; donor events across the state; fund statements and many other communications out to our Foundation “family.”

While everyday activities can feel somewhat overwhelming at times, there are of course bigger issues to consider. Some of our challenges can seem down right daunting. A great quote I’ve heard puts it this way: “The challenges are deep, and sometimes our paddles can feel so small.”

Those facing rural North Carolina were brought into plain view at our recent board meeting, where we had the opportunity to hear from Anita Brown-Graham from the Institute of Emerging Issues.

Challenges facing the foundation sector were keenly underscored at the Council of Foundation’s recent conference, where Emmett Carson of the Silicon Valley Community Foundation wondered if we should all rethink our business model.

And we now also have challenges coming from the US Congress, which is suggesting changes to the charitable exemption.

Not to mention the challenges that many of our communities are facing in recovering from April tornadoes and Hurricane Irene.

So it’s all put into perspective. Sometimes all those little everyday challenges may block our vision around the big roadblocks many of us face.   So we all navigate around both pebbles and boulders, and our paddles are usually exactly what we need.

Looking forward to fall -- me?

Though many await the beauty and crispness of fall, I've never been able to completely enjoy the changing leaves or the clear Carolina blue sky.  Instead, I'm beginning to dread the approach of winter.  Christmas and college basketball notwithstanding, what does winter have to offer?  The sky's gray, the ground is brown, trees are bare and cold physically hurts. 

But wait, with this summer's record-breaking heat, an earthquake, a hurricane and the volatile equity markets, I'm ready for a change.  The major equity indices were down 8 to 9% for the summer, and August alone proved to be the worst August in a decade, down 5-6%.  And that was with a nice rebound in the last week and a half of trading.  The suspects were wearily familiar (Europe and recession fears) or maddening (Washington and the debt downgrade). 

Though European debt and double-dip recession fears have continued to pressure equities in September, there are positives.  Unlike September 2008 and the onset of the financial crisis,  corporations are now strong, energy prices are relatively stable (perhaps falling) and there is plenty of value out there for the disciplined investor.  The U.S. economy is indeed fragile and more vulnerable to unexpected events, but equity market fundamentals are strong and investors will eventually tire of earning 0% on cash.

In times like these it’s good to remember that great old British wartime expression: “Keep Calm and Carry On.”  That phrase fits nicely with the long-term investment strategy of the North Carolina Community Foundation.  Financial markets are driven either by fear or greed.  The Foundation’s Finance Committee remains vigilant and navigates the portfolio well inside those extremes.

Who's at the table?

Across the Northern Piedmont region where I work, many of the affiliate advisory boards have been deciding which grant applications to fund from the many local nonprofits that have applied.  I eagerly look forward to each meeting that has the grants decision as part of the agenda, because I’m fascinated by how people make their decisions. I’m also excited to see which projects get the final green light to be funded.

The entire process starts weeks before, when nonprofits seek out our local community foundation affiliates for funding. Going online to fill out the application – a first for our statewide foundation this year – was a new experience for many of them. Our staff has been quick and responsive to answer all the questions that our nonprofits posed during the application process. On the other side of the net, our affiliates’ grants committees viewed the applications online for the first time, and their experiences were positive and supported the notion that moving the process online was a good decision.

So the stage is set: the applications have been vetted by the NCCF staff, and the grants committee is sitting down together to discuss the merits of each application. Some applications are from familiar nonprofits that apply annually, and others are newcomers. Some committee members recuse themselves from the voting due to their involvement with the nonprofit under discussion. Other committee members raise questions about a budget line item, or whether a relatively young nonprofit has the board and infrastructure in place to make it in this economy. Some committee members can feel deeply and passionately about the mission of a certain applicant. And still others want to fund every applicant the same amount of money, regardless of the merits of the project, just to be fair.

Discussions can get heated, especially when not every application can be funded and tough decisions need to be made. The grants committee chair sometimes needs to be part Patton and part Gandhi. But by the end of the meeting, the members have reached a consensus, have voted to fund some applicants over others, and have stayed within their funding limits. Whew! It can be emotionally exhausting!

I applaud all the people at the table, because it’s a tough job to wade through applications, do the due diligence, and then discuss and make compromises to act as a committee of a board, and not as a party of one. And by the way, these are all volunteers doing this on their own time.

Who’s at the table? A hard-working group of dedicated people who want to improve their communities, who know that these grants to local nonprofits will make a significant difference in their fellow citizens’ lives. My hat’s off to all of them.