Philanthropic Trends, Grant Initiatives & Generational Wealth Transfer

1. Philanthropic Trends, Grant Initiatives & Generational Wealth Transfer April 24, 2012 Peter A. Dunn President and CEO Central New York Community Foundation pdunn@cnycf.ofg www.cnycf.org

2. Session Agenda • The CNY Foundation Ecosystem • CNYCF Background and Context • Grant Initiatives: Examples of Crisis Response and Opportunistic Philanthropy • Strategic Partnerships • Performance Management • Philanthropic Trends • Charitable Planning and Generational Trends • CNY Wealth Transfer Analysis

4. CNY Foundation/Funder Ecosystem

5. What is a Community Foundation? • A tax exempt public charity • Receives, manages and distributes charitable funds • A collection of permanent charitable funds reflecting numerous purposes and philanthropic goals • Through its unrestricted Community Funds, a grantmaking foundation having impact on local needs, concerns and issues • A convener and resource for local nonprofits • A resource for personal and family philanthropic planning and complex charitable gift plans

6. CNYCF “Businesses” Community Impact Charitable Fund Stewardship • Grants to Nonprofits • Convening Around Issues • Leading Initiatives • Creating Positive Change • Both Community Responsive and Foundation-Initiated Strategies • Private Foundation Alternative • Aggregating Community Charitable Capital • Stimulating Philanthropy and Endowment • Promoting Legacies and Current Giving • Honoring Donor Intent

7. A Brief History of Community Foundations • 1914 First U.S. community foundation established in Cleveland, Ohio • 1927 CNYCF established as “Syracuse Foundation, Inc.” by community leaders • 2011 850+ community foundations in the US and Canada; 1400 community foundations around the world (in 50+ countries) • administer more than $50 billion in assets; and • distribute almost $4 billion in grants/year

8. CNYCF Founders - 1927

9. Legacy Gift Stories Connected to Syracuse History Charles F. Brannock Judge Frank H. Hiscock • Syracuse Inventor and Entrepreneur • Gift of Residence • Corinthian Club Purchase, Proceeds Fund Legal Services • Carriage House Legacy

10. CNYCF Statistics • $130+ million total assets at March 2012 • Largest local endowed philanthropic foundation • Almost 600 charitable funds under administration • Funds ranging in size: $2,500 - $20 million • Each fund with a donor-defined mission and purpose • $100+ million in grants since inception • In 2011: 1,700+ grants totaling ≈ $6 million to 750+ charities • Focus on Onondaga and Madison Counties • Plus: Cayuga, Cortland and Oswego

11. Fund Composition Summary March 2011

12. The Value of Endowment Grants = 5% Payout Using 20 Qtr Rolling Avg Fund Balance Increases Over Time Grant Support Consistently Produced Fund Has Now Produced More in Grants Than Its Current Asset Balance At a time of Economic Uncertainty, CNYCF Grants Budgets have Remained Stable for Last 4 Years

13. Managing for Grantmaking Complexity Initiatives: • Literacy Coalition • NPO Partnerships, Mergers • Affiliates • Women’s Fund • Cayuga, Pulaski Regional Funds Scholarships: • More than 100 scholarship funds • Largest non-college scholarship provider • Manage Say Yes to Education SCSD scholarship grants and endowment fund Community Grants: • Board Committee • Onondaga & Madison • 3 times/year • Competitive (50%>30% success rate) • Range = 2k-$150k • $2m/year in grants Donor Advised Grants: • 501(c)3 public charities • No geographic restriction • More than 1,500 grants processed/year

14. Strategies Aligned with Strengthening the NPO Sector

15. The Perfect Storm for NPOs Scary Statistics Creative Responses • 85% Report Increases in Demand • Only 50% Able to Meet Demand • <50% Receive Contracted Government Grants on Time • Even so, 75% Indicate Government Grants do not Cover Program Costs • NPOs Float Costs with Own Funds • 50% Have <3 Months Cash Reserves • 31% Had a Budget Deficit • >50% Added Programs, # Served, and Program Staff • 38% Partnered with Another NPO to Increase Program Capacity • 38% Relied More on Volunteers • 20% Expanded Geographic Region Served • 17% Collaborated to Reduce Administrative Costs Source: Nonprofit Finance Fund, April 2012

16. Economic Crisis Response: Performance Management $200k to Support Data Processes Measuring Programmatic Impact Government and Funders Expectations: a Move From “Outputs” to “Outcomes” • NPOs Without Data to Support Impact • Federal “Social Innovation Fund” Concepts of Scalability, Impact and Measurement • Grant Program Developed • New “Grantee Learning Community” • 12 Month NPO Learning Cohort • CNYCF Staff Led Plus Consultants • Grantee Participatory Model

17. Economic Crisis Response: Strategic Partnership Fund • County Meets with Funders • Human Services Budget Shortfall • Funder Responses • Funder Differentiations • What is Philanthropy’s Role in Economic Crisis? • Prior Capacity Building Efforts • Program Design • $300k total • Up to $25k grants • Regionalization, Mergers, Back Office Partnerships, Affiliations, Dissolutions • So far: 5 Mergers, 2 Regionalizations Funded • Proposals in Pipeline

18. Strategic Partnerships in Context In 2011, CNYCF Broadened the Criteria for the Grants to Include Not Only the “Wedding” but also the “Dating” Period : -Exploratory Partnerships -Due Diligence and Consulting -Board Facilitation • Government Contract Cuts • NPOs Striving for Sustainability • More than 60% of NPO CEOs Will Retire Within the Next 5 Years • Potential Merger Culture Clashes • Stark Choice for Some: • Preservation of the Mission; or • Preservation of the Entity • CNYCF View: Mission Sacred, Entity Not

19. www.CNYVitals.orgCommunity Indicators Project Raise awareness of assets and issues Inform community planning and funding Support community partnerships Empower communities to make positive changes

20. Current Trends in Philanthropic Planning • Life Simplification • Private Foundation Termination and Succession Planning • Complex Asset Gifts • Family Dynamics • Warren Buffett example • Empowering Children • Diversity in Family Structures • Keep it Now, Give it Later • Fear of Living Too Long • Telling Bequest Donor Stories Through Mission Statements • More Specificity in Demands for NPO Performance • “Contractual” Donor Confidence Through Gift Agreements • NPO Financial Stability and Sustainability • Concerns About Board Governance • Donors Planning Gifts Around Future Concerns • CNYCF Designated Fund Bequest Example

21. Birthrate Trends Affecting Giving Generational Trends and Distinctiveness Impacts Philanthropy How Do We Retain CNY Wealth for Charitable Purposes that May Go Elsewhere? Silent GenX Boomers Millennials WWII

22. CNY Wealth Transfer Study Trend Analysis Regional Factors • Demographics • Financial Assets • Real Estate • Other Nonfinancial Assets • Wealth and Asset Type Distribution • Special Populations • College Campuses • Prisons • Vacation Homes • Special Industries • Discounting Used from Actual

23. Regional Household Wealth and Income More $ Wealth Than Most Expect Plays to Perspective of CNY as Lacking Donor Resources Significant Differences County to County

24. Current Net Worth and 10 Year Transfer of Wealth Expectation

25. Charitable Bequests and Endowment Impact

26. Impact of New Building Largest Foundation But Lack of Brand Knowledge/Identity Space Matching Mission A Physical Manifestation of Brand Enhanced Convening Confidence in Stewardship 100+ Events in One Year, 1,000+ Visitors On Target for LEED Silver 2 Foundations, 2 NPO Tenants

27. Philanthropic Trends, Grant Initiatives & Generational Wealth Transfer April 24, 2012 Peter A. Dunn President and CEO Central New York Community Foundation pdunn@cnycf.ofg www.cnycf.org