Presbyterian 2015 annual report final

2015

Annual Report

THE FUTURE OF GIVING Presbyterians have always been generous.

From changing communities to changing the world —Presbyterians love to give of their time, talent, and treasure. And while we can never out-give God, we long to be good stewards of the abundant gifts He has given us.

Since 1799, faithful Presbyterians have relied on the Presbyterian Foundation to preserve a strong financial footing for the ministries and missions they care about most. We work with both individual donors and the congregations and mission organizations they support to gather resources, steward gifts and investments, and disburse funds faithfully.

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IF IT IS TO ENCOURAGE THEN GIVE ENCOURAGEMENT IF IT IS GIVING THEN GIVE GENEROUSLY IF IT IS TO LEAD DO IT DILIGENTLY IF IT IS TO SHOW MERCY DO IT CHEERFULLY Romans 12:8

LETTER

FROM THE PRESIDENT 2015 was another successful year for the Foundation.

We distributed nearly $60 million for mission and ministry, and faithful Presbyterians continued their generosity by placing 10,272 new gifts in the Foundation’s care. I am truly grateful for the growing number of individuals, congregations, and ministries that allow the Foundation to help gather, steward, and disperse their gifts and resources.

New Tools and Resources Philanthropy and giving patterns are ever-changing, and the Foundation is deeply committed to helping ministries and congregations endure and thrive for generations to come. We instituted several key projects in 2015 that brought new tools and services to assist them with the mission God calls them to do.

Planned gifts, such as a bequest, are often the largest gifts a congregation receives. The addition of the tools and resources of the Planned Giving Navigator to the Foundation’s services offers churches customized web pages, brochures, a best practices library, a project management feature, and more to help them implement an effective planned giving program.

There is a great need for stewardship education within congregations, and we spent considerable time last year building our educational resources to support them with training, discussion, and tools for building a culture of generous giving and making giving easier for their donors.

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Growth in Giving In keeping with current trends as the fastest growing means of charitable giving, money given to establish new Donor-Advised Funds (DAFs) through the Foundation grew by 257 percent. DAFs offer donors ease, flexibility, simplicity, and opportunities to engage the entire family and teach children about giving. We continue to explore ways that our expertise in socially responsible investing and available positive investment options will distinguish our donor-advised funds and open the door for further growth.

In 2015, more than $2.9 million was given through the Foundation’s Ministry Partnership Funds. At year-end, 332 churches and ministries were using our online giving and GIVE NOW button. Most use it for their regular giving, not just special fundraising purposes like a church van or organ.

Grant from Lilly Endowment Inc. At the end of 2015, the Presbyterian Foundation, along with the Board of Pensions, received the exciting news that each organization had received grants of $1 million as part of Lilly Endowment Inc.’s National Initiative to Address Economic Challenges Facing Pastoral Leaders. The initiative supports a variety of religious organizations across the nation as they address the financial and economic struggles that can impair the ability of pastors to lead congregations effectively.

The Foundation’s work under this proposal will address financial challenges that diminish the effective ministry of pastoral leaders in their professional sphere. Research has shown that economic challenges result from an array of professional issues that are theological, staff-related, systemic, personal/ political, and technological. All of these elements must be addressed to effectively change church culture toward healthier understandings and practices of church financial administration and leadership.

The Foundation will use its grant to assemble a body of educational materials and tools for effective church leadership and financial administration and make them available to both pastors and lay leaders; develop a

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comprehensive overhaul of the PC(USA) congregational stewardship system (i.e., how Presbyterians view and raise funds for ministry and mission); and build on existing and create new technological means to deliver training, tools, and resources for pastoral and congregational leaders.

The programs we envision will not only offer immediate assistance to an array of pastoral leaders, they will enable the development of long-term, adaptive solutions that could quite literally transform the way Presbyterians talk about and deal with finances. This is a transformation that has long been needed in our denomination—and likely in many others as well.

Additional Developments Last year we made two significant changes to help us better meet the needs of donors and the denomination: • P artner with the Board of Pensions of the Presbyterian Church (U.S.A.) to help build communities of generosity.

• S hare our development expertise and stewardship services with the Theological Education Fund, which moved from the Presbyterian Mission Agency to the Foundation.

We look forward to serving the needs of our pastors, congregations, donors, and other ministry partners in the coming year.

Yours in Christ,

Rev. Thomas F. Taylor, J.D., Ph.D. President and CEO

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BY THE NUMBERS

$59.8 Million

DISTRIBUTED TO MISSION

Ministry and Mission Efforts that Presbyterian Endowment Funds Support

3.97%

49.07%

Presbyteries and Synods

Presbyterian Mission Agency and other GA Entities

2.44%

Other Mission and Discipleship

6.12%

Education, including Theological Education

17.54%

Health and Social Services Ministries

20.86% Congregations

$1,004,933,778 $145,438,986 $703,558,525 TOTAL ASSETS STEWARDED

BY THE FOUNDATION

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TOTAL NCTC ASSETS UNDER MANAGEMENT

ASSETS IN NEW COVENANT FUNDS; INCLUDES $211 MILLION FOUNDATION AND NCTC ASSETS

$1.6 Billion

IN ASSETS SERVICED

332

12,330

2,108

8,821

CHURCHES AND MINISTRIES USING ONLINE GIVING PLATFORM

ACCOUNTS UNDER MANAGEMENT

DONORS MADE GIFT CONTRIBUTIONS IN 2015

GIFTS THROUGH ONLINE GIVING

$944,808

$53.2 MILLION

$1,755,253

GIFTS RECEIVED TO DONOR ADVISED FUNDS

NEW GIFTS AND INVESTMENTS; INCLUDES $35,839,619 NEW NCTC ASSETS UNDER MANAGEMENT

GIFTS RECEIVED THROUGH MISSION EXCHANGE

Total Beneficiaries*

* 608 organizations have multiple types of funds

Permanent Funds 2,186

Life Income Funds 1,275

Ministry Partnership Funds 332

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TRADITIONAL GIVING METHODS

Write check for charity

Mail check

DONOR-ADVISED FUNDS Your online “charitable checkbook”

Wait for receipt/acknowledgement— save for tax returns

Donor-advised funds are the fastest growing means of charitable giving today, offering immediate potential tax advantages, simplified record-keeping, and flexibility in choosing beneficiaries and investment options.

DONOR-ADVISED FUND

Online gift to establish fund or add future gifts

Advantages

Immediate potential tax advantages

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Make online grant requests

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Giving history available online

A donor-advised fund is opened with a contribution made to a sponsoring organization (like the Presbyterian Foundation). The fund may be set up by an individual, family, or corporation. It is an irrevocable gift—but you retain advisory privileges for the fund.

You have the ability to make grant recommendations to qualified nonprofit organizations of your choice (including your church). A donoradvised fund operates similarly to a private foundation, offering opportunities to engage your entire family in philanthropic decisions and teach your children to live generously.

As a family you can identify and discuss the types of ministries or missions to support, at what level, and share why it is important to help a particular mission or ministry. You can research charities to see what impact your gift can achieve, and to assure that your gift is well managed.

BENEFITS OF A DONORADVISED FUND • Flexibility —You make gifts to your local congregation and many other organizations as well. Now you can support all these ministries or charities and manage your giving using one single fund.

• Giving on your schedule—You may receive an immediate tax-deduction when you open your fund, yet you can take months or even years to recommend grants from your fund.

•L asting legacy —You can ensure that giving continues after your lifetime through instructions you leave with the Foundation to make grants you designate or to name an heir to continue as a fund advisor.

•T hinking beyond traditional assets—Funding your donor-advised fund with appreciated, non-liquid assets may provide you with a tax-smart way to give.

If you are looking to create a lasting legacy, build a culture of generosity within your family, or simply fund the many charities you care about, talk to the Presbyterian Foundation about the flexibility and simplicity of a donor-advised fund.

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CARING FOR THE ENVIRONMENT THROUGH INVESTING The Presbyterian Church (U.S.A.) is among hundreds of denominations, universities, private endowments, and other institutional investors that are studying ways their investments can best be leveraged to help care for God’s creation and mitigate the negative effects of climate change. While denominational policy discussions continue, the Foundation’s Board of Trustees at their meeting in June 2015 discussed a positive approach to address environmental concerns.

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INVESTMENTS TARGET ENVIRONMENTAL SOLUTIONS. The trustees approved a $7 million allocation of the Presbyterian Endowment Fund for investments that target climate change solutions.

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DIALOGUE WITH ENERGY COMPANIES. The Foundation commits to continued work with the denomination’s Mission Responsibility Through Investment committee to dialogue with energy companies to bring about change.

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SECURITIES SELECTION PROCESS. The Foundation has sent letters to all of its investment managers, directing them to consider environmental, social, and governance (ESG) factors in their security selection process.

LOANS TO ENCOURAGE ENERGY EFFICIENCY. In collaboration with the Presbyterian Investment and Loan Program, a portion of the Church Loan Funds (for which the Foundation is the fiduciary) have been made available for loans that help PC(USA) congregations and ministries implement renewable energy or carbon reduction solutions. The Restoring Creation Loans provide lower interest rates and flexible terms that can match the length of the return on investment. The goal is to provide loans to congregations to renovate their buildings using energy-efficient products in order to conserve energy, thus, saving on costs and reducing carbon emissions.

FOSSIL-FREE INVESTMENT SOLUTIONS. The Foundation’s subsidiary, New Covenant Trust Company, is providing fossil-free managed portfolios to congregations and other clients who desire a customized approach. This offers congregations and others a way to meet their objectives and align with their values.

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CREATIVE INVESTMENTS EXTEND CHURCH’S MISSION For 45 years, the Presbyterian Church has engaged in a program known as “Creative Investment” designed “to invest funds on six continents for the promotion through investment of social concerns expressed by the General Assembly.” The program allows up to 10 percent of a select group of endowment funds held at the Foundation for the benefit of the Presbyterian Church (U.S.A.) to be invested in organizations and projects that offer a social return and may offer a financial return as well.

In 2016, the Foundation deployed $4.5 million in Creative Investments around the world in an array of ventures that are helping people in real and tangible ways.

Among our investments: • T he Foundation’s Transformational Investment program now funds five projects in IsraelPalestine, including a microfinance effort that has created 136 sustainable jobs in its first two years, and a solar energy installation that delivers 168 kilowatts of renewable energy and provides 110.2 tons of annual reduction in carbon dioxide.

• O pportunity Finance Network undergirds small businesses, microenterprises, nonprofit organizations, commercial real estate, and affordable housing projects through Community Development Financial Institutions (CDFIs) in hard-to-serve markets across the United States, sparking job growth and retention.

• O ikocredit International provides development funding in 63 countries to microfinance organizations; production cooperatives focused on agriculture, fair trade, manufacturing; and community servicing organizations focused on health and education.

In addition to their social return, these Creative Investments may provide a financial return as well.

10%

OF THE ENDOWMENT FUNDS HELD AT THE FOUNDATION CAN BE INVESTED FOR A SOCIAL AS WELL AS FINANCIAL RETURN

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COUNTRIES ARE BEING PROVIDED DEVELOPMENT FUNDING

U.S.

JOB GROWTH AND RETENTION ARE FOCUSES OF COMMUNITY DEVELOPMENT PROJECTS

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PROJECTS IN ISRAEL-PALESTINE INCLUDE MICRO-FINANCE AND SOLAR ENERGY

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TRANSFORMATIONAL INVESTMENTS In 2013, the Presbyterian Foundation took the lead in new efforts to accomplish positive investments in the area of IsraelPalestine to help engender peace and create sustainable economic development and jobs.

The Foundation worked with colleagues at the Presbyterian Mission Agency, several congregational leaders, and partners from consulting firms and companies in Israel, the West Bank, and Great Britain to put five investments in place.

Several of these investments from the Creative Investment funds are already producing exciting results and some have opportunity for additional investment.

MICROFINANCE The Presbyterian Foundation and The National Bank (TNB) in Ramallah launched a five-year microfinance project in 2013 with a $250,000 investment. TNB leveraged that investment to make 47 loans totaling $594,060 to new and expanding businesses in the West Bank. The loans are targeted to women and offered with discounted interest rates. Borrowers have used the funds to launch agricultural projects, to buy taxis, to start or expand shops, bakeries, and restaurants, and even to open a driving school. As a result, 136 new sustainable jobs have been created. New investments are welcome.

RENEWABLE ENERGY The Presbyterian Foundation invested $300,000 to build a 168-kilowatt solar energy plant at the Arab Development Society’s (ADS) research and production facility near Jericho.

This is the largest solar-tracking installation in the region and is already providing more consistent and affordable electricity to the Society’s dairy facility. In addition, the solar plant is providing 110.2 tons of annual reduction in carbon dioxide, and it generated $35,000 in savings on power costs in its first nine months of operation.

LIFE SCIENCES Israel invests over 4 percent of its GDP in research and development, but until 2000 no Arab scientists or researchers took part in any of the country’s incubator efforts.

A group of Israeli business leaders—both Arab and Jewish— created New Generation Technologies (NGT) to launch life science companies together using a combination of government and private funds. The Presbyterian Foundation committed $500,000 in NGT’s current round of incubator funding. Since its founding, NGT has launched 27 companies and remains open to new investors.

TOURISM The site of Jesus’ baptism is being developed as a tourist and spiritual retreat area by several religious bodies on land donated by the king of Jordan. The Presbyterian Foundation has invested $150,000 with the Evangelical Lutheran Church of Jordan and the Holy Land to finance the construction of a church and conference center there, both of which are now up and running. Church groups planning visits to the Holy Land are encouraged to include Bethany Beyond the Jordan on their list of stops.

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MINISTRY RELATIONS OFFICERS Ministry Relations Officers partner with you to increase funding for your ministry.

Rob Hagan 888.211.7030 rob.hagan@

Minner Serovy 855.514.3077 minner.serovy@

Stephen Keizer 866.317.0751 stephen.keizer@

Ellie Johns-Kelley 855.251.8212 ellie.johns-kelley@

Olanda Carr 888.711.1318 olanda.carr@ Lisa Longo 866.710.5094 lisa.longo@

Steven Wirth 866.860.3383 steven.wirth@

All Foundation emails: first.last@presbyterianfoundation.org

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Sherry Hester Kenney 855.342.4130 sherry.kenney@

Robert Hay Jr. 855.514.3152 robert.hay@

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Presbyterian Foundation 200 East Twelfth Street Jeffersonville, Indiana 47130 toll free: 800-858-6127 local: 812-288-8841 fax: 502-805-0466 presbyterianfoundation.org