trends in philanthropy · 2018-04-03 · community foundation in u.s. •work with donors on...
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Trends in Philanthropy
January 9, 2018
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GHCF OVERVIEW
• Public Charitable Foundation, 33rd largest Community Foundation in U.S.
• Work with donors on maximizing the impact of their giving
• 2016 statistics: $640 million of assets under management, $107 million grants, about 1,000 donors
• Staff of 32 professionals
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GHCF GRANTS BY PROGRAM AREA From 1/1/2016 to 12/31/2016
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Total Gifts to Fund
$111,000,000
Total Grants from Fund
$64,500,00
HURRICANE HARVEY RELIEF FUND
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HURRICANE HARVEY CORPORATE EMPLOYEE RELIEF FUNDS
# of Funds Established
51 New & 8 Reinstated
Total Gifts to Date
$8.5 million
Grants Disbursed to Date
3000+
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Philanthropic Ecosystems
SOURCE: Giving USA Foundation | GIVING USA 2017
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SOURCE: Giving USA Foundation | GIVING USA 2017
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SOURCE: Giving USA Foundation | GIVING USA 2017
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SOURCE: Giving USA Foundation | GIVING USA 2017
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Philanthropic Ecosystems HOUSTON RESOURCES – BY THE
NUMBERS
HOUSTON MSA: FOUNDATIONS BY ASSET RANGE # OF
FDNS ASSET RANGE ASSETS GIVING
50 $50 million or more $13,550,038,240 $847,307,081
99 $10 million to $49.9 million $2,115,684,381 $150,465,841
92 $5 million to $9.9 million $610,419,851 $44,708,644
298 $1 million to $4.9 million $714,874,116 $85,921,502
132 $500,000 to $999,999 $97,818,402 $18,801,390
80 $250,000 to $499,999 $30,645,748 $3,652,579
59 $100,000 to $249,999 $10,622,200 $8,084,255
90 Less than $100,000 $2,717,245 $52,861,750
908 $17,132,820,183 $1,211,803,042
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Philanthropic Ecosystems HOUSTON RESOURCES – BY THE
NUMBERS
HOUSTON MSA: TOP 10 FOUNDATIONS BY GIVING
FOUNDATION CONTRIBUTIONS DISCLOSURE
Greater Houston Community Foundation $94,455,749 12/31/2014
Houston Endowment $85,843,061 12/31/2014
Laura and John Arnold Foundation $85,348,365 12/31/2014
ExxonMobil Foundation $75,212,563 12/31/2014
Moody Foundation $65,994,027 12/31/2014
Brown Foundation $63,704,116 06/30/2015
Kinder Foundation $42,650,633 12/31/2014
Robert A. Welch Foundation $29,117,084 08/31/2014
Terry Foundation $20,614,322 12/31/2014
Joe Levit Family Foundation $18,019,667 12/31/2014
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Philanthropic Ecosystems
HOUSTON RESOURCES – BY THE NUMBERS
HOUSTON MSA: TOP 10 FOUNDATIONS BY ASSETS
FOUNDATION ASSETS DISCLOSURE
Laura and John Arnold Foundation $1,766,641,213 12/31/2014
Houston Endowment $1,742,374,990 12/31/2014
Moody Foundation $1,547,141,408 12/31/2014
Brown Foundation $1,303,245,651 06/30/2015
Robert A. Welch Foundation $699,916,142 08/31/2014
Greater Houston Community Foundation $523,180,892 12/31/2014
Terry Foundation $365,331,240 12/31/2014
George Foundation $314,058,088 12/31/2014
BHP Billiton Foundation $282,423,901 06/30/2015
Cullen Foundation $281,536,194 12/31/2014
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Philanthropic Ecosystems
HOUSTON RESOURCES – BY THE NUMBERS
SOCIETAL ISSUES ADDRESSED
$- $100,000,000 $200,000,000 $300,000,000 $400,000,000
Educat iona Institutions and Related Activities
Public, Societal Benefit Total
Human Services Total
Arts, Culture, and Humanities
Health Total
Religion Related, Spiritual Development
Environment and Animals Total
International, Foreign Affairs, and National Security
Other/Unknown
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Philanthropic Ecosystems WHO IS HOUSTON?
NONPROFIT TYPE/REVENUE
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Philanthropic Ecosystems WHO IS HOUSTON?
HOUSTON NONPROFIT FACTS
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STRUCTURES
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DONOR ADVISED FUNDS
• “Charitable savings account” in your name
• Easy to establish
• Gifts are tax deductible, earnings are tax-exempt
• You recommend grants to qualified U.S. charities
• You get the recognition just as with a direct gift
• Ability to name successor advisors
• Low minimum account size
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SUPPORTING ORGANIZATIONS
• Subsidiary corporation of sponsor
• Sponsor names majority of board
• Operates much like a private foundation • Donor can select own money manager
• Customized checks and stationery
• Regular board meetings
• Higher minimum amount to start
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PRIVATE FOUNDATIONS
• Stand-alone nonprofit corporation or trust
• Fully under family control • Family names all board members
• Good vehicle for creating family legacy of giving
• Status sometimes a consideration
• Operates in many ways like a for-profit entity • Regular board meetings • Accounting and tax filing requirements
• Generally much higher minimums to start
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COMPARING THE TOOLS: Tax Exempt Status
DONOR ADVISED FUND
• Component fund of sponsor
• Shares tax exempt status
SUPPORTING ORGANIZATION
• Must apply for exempt status from IRS
• Classified as a public charity
PRIVATE FOUNDATION
• Must apply for exempt status from IRS
• Classified as a private foundation
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COMPARING THE TOOLS: Donor Control
DONOR ADVISED FUND
• Donor makes grant recommendations
SUPPORTING ORGANIZATION
• Donor holds significant influence
• Donor appoints minority of board
PRIVATE FOUNDATION
• Donor retains complete control over investments and grantmaking
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COMPARING THE TOOLS: Deductions for Cash Gifts
DONOR ADVISED FUND
• Up to 50% of AGI
SUPPORTING ORGANIZATION
• Up to 50% of AGI
PRIVATE FOUNDATION
• Up to 30% of AGI
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COMPARING THE TOOLS: Deductions for Appreciated Property
DONOR ADVISED FUND • Full fair market value • Up to 30% of AGI
SUPPORTING ORGANIZATION • Full fair market value • Up to 30% of AGI
PRIVATE FOUNDATION • Fair market value for publicly traded securities • Deduction limited to lower of cost basis or fair market
value for other assets • Up to 20% of AGI
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COMPARING THE TOOLS: Tax Issues
DONOR ADVISED FUND • Annual filing: none • Annual tax due: none
SUPPORTING ORGANIZATION • Annual filing: Form 990
• Simpler than Form 990-PF • Generally prepared and filed by sponsor
• Annual tax due: none
PRIVATE FOUNDATION • Annual filing: Form 990-PF, including required schedules • Annual tax due: Excise tax up to 2% of net investment income and
realized net capital gains
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NATIONAL CENTER FOR
FAMILY PHILANTHROPY’S
2015 TRENDS STUDY
Results of the First National Bench Survey
of Family Foundations
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SMALL WITH GREAT POTENTIAL FOR GROWTH
Foundations created since 1990:
• 78% have less than $10 million in assets
• <3% have assets of more than $200 million
• 60% expect to additional assets in future
NOTE: 40% of family foundations use a DAF
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PERPETUITY OR THE LIMITED-LIFE: A CONVERSATION IN FLUX
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GEOGRAPHY-BASED GIVING AND/OR ISSUE-BASED GIVING
How organizations organize their giving
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HOW BOARDS SPEND THEIR TIME
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THE NEXT GEN IS PARTICIPATING!
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CHALLENGES FOR NEXT GEN PARTICIPATION
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QUICK HIGHLIGHTS: NEXT FOUR YEARS …
Family foundations are considering making changes over the next 4 years:
• 20% will increase payout rate
• 6% will decrease payout
• 12% will expand their mission investing
• 28% plan to make fewer larger grants
• 25% expect a change in leadership
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TOOLS FOR TRANSFORMATION
• “New” tools
• Benefit Corporations – double and triple bottom line entities • Impact Investments – leveraging philanthropic capital with more
than grants • Social impact bonds • Advocacy
• New structures often utilize traditional tools as well • Private foundations • Donor Advised funds • Charitable trusts
• Donors increasingly utilizing “portfolio” of tools rather than a single platform
• Factors include philanthropic strategy, asset mix
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WHAT IS BEHIND THE TREND TOWARD UTILIZING NEW STRUCTURES?
• Philanthropists increasingly looking to drive
transformational change • Impact, scale, sustainability
• Along with family legacy work, Next Gen involvement
• Increasing recognition that transformation requires: • Capital to innovate
• Advocacy to scale in partnership with public sector, whether with public dollars or modifications to regulatory scheme
• Broad collaboration
• Purely traditional structures often do not provide access to all of the tools such philanthropists want to utilize
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Thank You!