Third Quarter, July 1 — September 30, 2011
A Quarterly Update for Triangle Community Foundation Fundholders and Successor Advisors
A Message from the President This is an exciting time for the Foundation – a time of transition but also a time for getting back to basics, to the Phail Wynn, Jr. core functions or “Main Things” that drive the work of the Foundation. For TCF, those “Main Things” are: donor identification and cultivation; exemplary financial and asset management; fund-holder services and relations; and grantmaking. This summer TCF staff engaged in a capacity assessment and organization realignment exercise. An important result of this process is the merging of our Development and Philanthropic Services teams. This new department will be under the leadership of Lori O’Keefe, whose new title is Vice President for Philanthropic Services and Chief Operating Officer. Robert Naylor, our Director of Finance, has the new title of Chief Financial Officer and Director of Administration. Robin Barefoot will serve as Legal and Policy Advisor, and as Director of Planned Giving. Jessica Aylor is our new Director of Development and Community Partnerships. To strengthen our finance department, we have hired a new Controller, Lindsay Harrell, a former auditor with PWC who most recently worked at a private equity investment fund; and we have hired Anne Wolf, an experienced staff accountant with significant non-profit experience. As a result of their combined efforts, we completed our 2011 audit fieldwork in record time – two weeks – and we should be issuing the audit report shortly.
made sound and patient decisions during the downturn that significantly benefited the recovery of our investment portfolios. From October 2007 to March 2009, the investment markets lost over 50% of their value, while our investment pools lost only approximately 30% of their total value. For the fiscal year ending June 30, 2011, our total assets exceeded $145 million – the highest in TCF history – and we received $11.9 million in gifts to new and existing funds. Today we hold 755 charitable funds, the largest number ever, and our grantmaking remains robust at approximately 10% of our asset level. Last year we granted out more than $14 million to nonprofit organizations – $9 million of those grants coming from donoradvised funds. The Foundation’s Community Grantmaking Program marked its fifth year with a cumulative $1.9 million in grants to organizations working in civic engagement and youth leadership. The Foundation’s other initiatives continue to flourish as well. This summer we distributed over $138,000 to our Send A Kid To Camp partners to provide 522 camp scholarships. Our online community, Triangle Gives Back, now has almost 1600 accounts. In March we hosted our second What Matters Benefit Dinner, with net proceeds supporting TCF programs that address community issues and strengthen local nonprofits. TCF continues to be nationally ranked among the Top 100 community foundations for asset size, grantmaking activity, and transaction volume. And like most community foundations, our biggest challenge is to increase unrestricted and field of interest funding so that we can channel significant funds to particular areas of need and to the nonprofit organizations best addressing those needs. This is one of the specific goals stated in our strategic plan.
As you may recall, we discovered an accounting issue in 2010 in which certain unrealized investment losses had been allocated to the Foundation level but not down to the individual fund level, affecting some 450 funds. In response, we undertook immediate steps to ensure that the allocation of investment gains and losses are made in an accurate and timely manner. Along with hiring additional staff, we performed system optimizations and overhauled our internal financial reporting package to ensure pinpoint accuracy in reconciling our investment pools to the investment trustee statements. This new process and disclosure information will ensure that an allocation issue like this will not happen again. The good news is that all of these unrealized losses have been reversed by our investment gains as of June 30, 2011.
Allow me to note that our renewed focus on the “Main Things,” our new organizational structure, and the implementation of our new strategic plan are all tracking in parallel. These efforts will help the foundation become a sustainable high performing organization, dedicated to continuous improvement and organizational excellence. Of course, we couldn’t accomplish any of these goals without the support of our fundholders. We are grateful for your enduring support, and we extend our thanks and gratitude for your commitment to Triangle Community Foundation.
While the Foundation was not immune to the impact of the past few years’ economic turmoil, our Investment Committee – in collaboration with our investment advisor, Colonial Consulting –
Phail Wynn, Jr. Interim President and CEO Immediate Past Chair, Board of Directors
New Funds for this Quarter
Kudos Congratulations to Board Chair Richard B. Guirlinger, who received the Automotive Aftermarket Management Education Award November 1st at an industry meeting in Las Vegas. Rick received the award for substantial dedication over a number of years to the educational process and the field of Automotive Aftermarket. Kudos to FLC Leadership Council member Frank Daniels, Jr., who received the Frank W. Mayborn Leadership Award by the Southern Newspaper Publishers Association (SNPA) at its recent annual News Industry Summit. Daniels, retired president and publisher of The News and Observer Publishing Co. in Raleigh, is chairman of The Pilot in Southern Pines. Congratulations to fundholder Marco Zarate, president and co-founder of the North Carolina Society of Hispanic Professionals, for receiving The Latino Diamante Award. Zarate was honored for his exceptional leadership and contributions to North Carolinaâ€˜s Latino/Hispanic community. Hats off to Jessica Banks Gilmour Aylor, a recipient of Business Leaderâ€™s 2011 Women Extraordinaire Awards, which are presented to civic and community leaders who have demonstrated significant business achievement and community involvement.
A total of five new funds were created during this quarter. We welcome these fundholders to Triangle Community Foundation. ASHA Endowment Fund and General Fund: Agency funds created to support the work of the American Social Health Association, a non-profit organization based in Research Triangle Park. ASHA is dedicated to improving the health of individuals, families and communities with an emphasis on sexual health and a focus on preventing sexually transmitted diseases and their harmful consequences. Robert E. Forry Fund: An agency fund created by the Jazz Foundation of North Carolina with an estate gift to support its programming and ensure the continued development of jazz and jazz education in our state. The Jazz Foundation of North Carolina sponsors and operates the North Carolina Jazz Repertory Orchestra, one of the leading repertory orchestras in the country.
Friends of NCLBPH Fund: An Agency Fund created by Friends of the NC Library for the Blind and Physically Handicapped (NCLBPH) to support the work of the Library, which circulates books and magazines throughout the state for persons who cannot use regular printed material. The Central Park School for Children Foundation Fund: An agency fund created to support the work of the Central Park School for Children (CPSC) in Durham, NC. CPSC is a tuition-free public charter elementary school in downtown Durham serving K-5 students with a child-centered, project-based, integrated-arts curriculum. Galloway Ridge Employee Scholarship Fund: A scholarship fund created and supported by residents of Galloway Ridge at Fearrington to further the education of employees of the continuing care retirement community in Pittsboro.
Grants to Support Community Issues: For the quarter ending September 30, 2011, the Foundation made: 458 grants totaling $1,749,982.68 67 scholarships totaling $412,511.00 In sum, there were 525 transactions for a total of $2,162,493.68 in distributions
Please join us for the 2011 Community Partners Celebration Thursday, December 1, 2011 6:30-8:30 pm, Marbles Kids Museum Raleigh, NC 2|
Each guest is asked to bring canned goods for the Food Bank of Central and Eastern North Carolina as admission to the party. Space is limited, so please register by November 21 at: www.tcfcelebration2011.eventbrite.com
Year-end Giving Reminders
Tis the season to plan for year-end giving!
Triangle Community Foundation would like to thank you again for your continuing generosity. TCF donors have remained steady in their giving this year, recommending thousands of grants to nonprofit organizations throughout our region, the nation and the world. We believe effective giving happens when people are passionate and knowledgeable about their communities, whether times are tough or good. With the end of the year in sight, we hope you are considering how your fund at TCF will play a role to support charitable causes that have special meaning to you. Now is the perfect time, with help from your professional advisor, to consider making contributions to your fund. Year-End Gifts: Dates to Keep in Mind In order to secure a charitable deduction in 2011 by contributing to your fund at TCF, we must receive your contribution before the end of December. • Checks and cash: gifts must be postmarked by December 31 • Credit card gifts: by phone on December 30 by 5pm; online before midnight December 31 • Wire transfer: TCF must receive the transferred asset in our account by Friday, December 30. Note that requesting your financial advisor to transfer assets does not secure your deduction. • Stock, bonds and mutual funds that have appreciated in value may generate tax savings: we recommend you initiate the gift prior to December 16 • Gifts from your IRA: Contact Robin Barefoot at 919-474-8370 ext. 133 or email@example.com
Year-End Grants To ensure that the organizations you wish to support this year are issued a check by December 31, 2011, we must receive your grant recommendations by 5:00pm on Monday, December 19, 2011. You have several flexible options to recommend a grant from your fund: • DonorCentral: log into your account and recommend a grant online • Fax (919-941-9208) or by mail: send a signed Grant Recommendation Form to TCF • Email: send your grant recommendation request directly to your Donor Engagement Officer We are here to help make sure your gifts reflect your personal goals and values. Please do not hesitate to contact your donor engagement officer at 919-474-8363 for help with your year-end giving.
Thank you again for all you do to make our community a better place to live, work and play. We hope your Holiday Season is a fulfilling one! Sponsor a Summer Camper this Holiday Season Consider making a gift to support TCF’s Send A Kid To Camp program this holiday season in honor of a loved one. In 2011, Send A Kid To Camp provided 522 summer camp scholarships to children from the Triangle who would otherwise be unable to attend camp due to family finances, placement in foster care, or disability. In its 27 year history, the program has raised over $2.3 million dollars to send more than 7,700 children to camp. Every dollar you contribute will be used to help a child attend camp. To make a contribution, please visit www.kidstocamp.net or contact your Donor Engagement Officer.
Upcoming Holiday Schedule Our offices will be closed November 23, 24 and 25 for the Thanksgiving holiday. We will process any grants received this week by Friday, December 2. We will be closed Friday, December 23 and Monday, December 26 for Christmas. Grant recommendations received by Monday, December 19 will be processed Thursday, December 22. We will be closed Monday, January 2, for New Year’s. Grant recommendations received by Monday, December 26 will be processed Thursday, December 29.
Quarterly Update | 3
TCF: Investment Overview, September 2011 The quarter ended September 30, 2011 proved difficult for domestic and international equity markets. Investors continued to react negatively to macro-related issues, which included the European sovereign debt crisis, S&P’s downgrade of US debt, and weaker growth estimates in emerging countries. The Triangle Community Foundation’s portfolio helped protect assets to some extent, but the overall market declines were significant. Overall for the quarter, the S&P 500 lost -13.9%, the Dow Jones was down -11.0% and international stocks (EAFE) were down -19.0%. For the past twelve months, the S&P 500 was down -1.3%, the Dow Jones was down -0.7% and international stocks (EAFE) were down -14.1%. The Third Quarter 2011 and 1-Year returns are shown in the accompanying graph for the: • Endowed Investment Portfolio (60% equity, 20% fixed income, 20% alternative) • Non-endowed Investment Portfolio (75% equity, 21% fixed income, 4% alternative) • Income Oriented Investment Portfolio (35% equity, 6% fixed income).
3Q 2011 and 1-Year Returns 3Q 2011
0 -0.7% -0.7%
-4 -6 -8 -10 -12
For more information, please contact Robert Naylor, Chief Financial Officer and Director of Administration, at Robert@trianglecf.org or 919-474-8370 x129.
Charitable gifts from IRAs only through New Year’s Eve 2011 President Obama’s tax bill signed into law in mid-December of last year allows owners of traditional and Roth IRAs to direct payouts of up to $100,000 to qualified charitable organizations through December 31, 2011. The amount transferred directly to charity will satisfy the minimum distribution requirement for tax year 2011 and will not be included in the IRA owner’s gross income. No itemized charitable deduction can be claimed for the amount transferred, and donors must be 70½ years of age or older to avoid penalty for early distribution.
Transfers from IRAs cannot be directed to a donor-advised fund, but can be directed to a field of interest or designated fund to support programs and organizations that you care about. If you plan to make a gift to Triangle Community Foundation from your IRA before the end of 2011, please contact Robin Barefoot, Director of Planned Giving to be sure the gift is correctly processed as a transfer from an IRA. You can contact Robin at 919-474-8370 ext. 133 or firstname.lastname@example.org.
In Memory . . . Our thoughts are with the families and loved ones of the following special friends of the Foundation Shirley Berger, TCF Fundholder, passed away on Thursday, October 8, 2011. Shirley founded NC Arts in Action (AIA) at the age of 82 after re-locating to Chapel Hill from Santa Fe, NM. She had been on the board of the Santa Fe affiliate of the National Dance Institute (NDI) and knew first-hand the transformational impact on students who participated in the program. During her first months in Chapel Hill, she set out to establish an affiliate and founded North Carolina Arts in Action in 2005. Since that time, over 2,500 children have participated in NC AIA’s in-school and after-school programs in Chapel Hill and Durham. Today NC AIA includes summer programs and alumni programs that continue to build leadership and teamwork skills for hundreds of area children. NC Arts in Action has been a recipient of both CGP and donoradvised fundholder support since its inception.
Pearl Francis Seymour (Rev. Robert and Pearl Seymour Fund), 84, of Chapel Hill, passed away on October 28th, 2011. She was born in LaFollette, Tennessee, in 1927 and preceded in death by her parents and two brothers. An accomplished pianist and organist, Pearl started her career teaching in the Music Department of Mars Hill College and was also the organist of the Mars Hill Baptist Church. Following her marriage to the Reverend Robert Edward Seymour, Jr., the couple moved to Chapel Hill in 1959, where she served as the organist for the Olin T. Binkley Memorial Baptist Church for 30 years. Pearl was an early President of the Chapel Hill Service League and a member of the Chapel Hill Music Teachers’ Association. She was recently honored with her husband in the naming of the new Chapel Hill Senior Center as the Robert and Pearl Seymour Center. The family welcomes contributions to the Ministry of Music or the Endowment Fund of the Olin T. Binkley Memorial Baptist Church (1712 Willow Drive, Chapel Hill, NC, 27514).