1. Association of California Symphony Orchestras
August 8, 2008
Walnut Creek
Katherine E. Akos
Greg Lassonde, CFRE

2.  Organizational readiness
 Administrative components
 Methods for building
 Questions on topic welcome throughout
 Q&A last 15 minutes for general questions

3.  Organizational needs are all immediate
 Strong history using planned gifts for
operational use
 Guide Dogs for the Blind
 St. Anthony’s Dining Room
 AIDS organizations in earlier years
 Board not ready to make commitment
 Need reserve or rainy day fund in place

4.  Organization will continue in perpetuity
 Board ready and willing to oversee
 A plan in place to build
 Current gifts
 Deferred gifts
 Administrative systems identified/established
 Expenses budgeted

5.  Develop a case statement
 The need for endowment
 Specific program components listed
 Program component and total goals
 Time period to achieve goal stated
 www.plannedgivingcoach.com

6.  20% of operating budget example
 $1,000,000 total operating budget
 20% = $200,000
 5% draw: $4,000,000 fund = $200K draw
 Assumes 8% yield
▪ 5% draw
▪ 3% inflation

7.  Work the board
 Start with development committee
 Move to finance committee
 Full board discussion
 Case convinces a few board members to give
 Board resolution at passage of case
statement
 Basic premise achieved for marketing efforts

8.  Under auspices of Investment Committee
 Gifts into endowment include
 Current gifts so designated
 All matured planned gifts
▪ Some policies will include capital use
▪ Few policies will allow operating use
 Will follow (newly created?) endowment
policies
 Will follow (newly created?) investment
policies

9.  Guide establishment and operation
 Cover many terms including
 Definition of endowment
 Separate nature of funds
 Spending policy
 Exceptions to policy
 Oversight and investment
 Administration and monitoring
 Etc.

10.  Spending policy typically 5% - 5 ½%
 12 – 20 trailing quarters average
 Offsets unusually high gift or investment years
 Smooths out economic downturns

11.  UMIFA (Uniform Management of Institutional
Funds Act)
 UPMIFA (Uniform Prudent Management of
Institutional Funds Act [pending])
 FASB (FinancialAccounting Standards Board)
 GAAP (GenerallyAcceptableAccounting
Principles)

12.  Provides authority to InvestmentCommittee
 Delineates responsibilities
 Defines ethics and conflicts of interest
 States investment objectives
 Lists an asset allocation strategy
 Determines criteria for investment strategy
 Sets meeting and communications schedule
 Define performance evaluation

13.  FASB 116 & 117
 Permanently restricted
 Only a donor can restrict or remove restriction
 Temporarily restricted
 Time
 Purpose
 Combination of time and purpose
 Unrestricted

14.  Oxymoron?
 3,000 Google hits (mostly higher education)
 San Francisco Symphony campaign
 aka
 quasi-endowment
 Board-designated endowment
 What a current board restricts, a future board
may remove such a restriction

15.  Generally poor reasons to remove restrictions
 Repeated annual budget shortfalls
 Increases in budget not sustainable through
earned or contributed revenue in second year
 Good reasons to remove restrictions
 Capital needs
 Special campaigns
 Program start
 Donor disclosure at time of gift is crucial

16.  Current gifts
 Endowment campaign
 One-off gifts
 Deferred gifts
 Proactive planned giving program
 Gifts only “over the transom”
 Usually from assets (not income)

17.  Keep a current list at hand
 Attach a price tag
 Don’t under-value
 Consider term of years vs. perpetual
 Provide ample and visible name recognition
 Include a mix of chairs and programs
 Have a generic list for “pool” (smaller gifts)
 “New Compositions Fund”
 Steers restricted giving toward acceptable uses

18.  Named funds should:
 Provide stewardship
 Encourage others to step forward
 Be coordinated with annual fund efforts

19.  Agreement document
 Terms clearly delineated
▪ Name of fund
▪ Pledge term if not a single payment
▪ Cy pres clause
▪ Investment and endowment policies referenced
▪ Forms of recognition specified
 Include finance department
 Restrictions acceptable and correctly documented
 System in place for reporting fund performance

20.  Hold gift celebration that is appropriate and
consistent for giving level
 Token gifts should be mission-focused
 Named funds should be visible to patrons
 Visibility should promote other opportunities
 Annual fund reporting
 Strict fund accounting
 General narrative report
 Combination of the two

21.  Usually conducted with campaign counsel
 Feasibility study with case prospectus
 Extensive case statement
 Creation of campaign committee
 Guidance of staff during solicitation
 Without counsel
 Usually smaller campaigns
 Expectation of 100% board participation

22.  Top down / inside out
 Quiet phase (typically 1-2 years)
 Lead gift (10-25% of campaign total is common)
 Usually 50%-75% of total raised
 All one-on-one
 Public phase mostly for smaller gifts
 One-on-one; direct mail; telemarketing
 Multi-year pledges common

23.  Gift only (coordinated with annual fund)
 “Comprehensive” - often multi-year
commitments
 Campaign gift
 Annual fund increase
 Triple ask (true comprehensive campaign)
 Campaign gift
 Annual fund increase (match for new AF gifts)
 Consider joining legacy society

24.  Ongoing source of endowment funds
 Proactive program will be more successful
 Board policy will direct gifts to endowment
 Some policies include capital uses as well
 Use for operations is the exception
 Consider a 10%/$100K maximum operations cap
 Encourage 100% participation of life trustees
 Aim for a minimum of 50% board member
participation

25.  Use a survey to meet one-on-one
 Board members and honorary/emeritus/life
trustees
 Former board members
 Long-term stakeholders
 Major donors
 Direct mail; newsletter; any opportunity
 Marketing premise:
“Your GiftWill Live On Forever”

26.  Gift acceptance policy
 Board resolutions
 Establishing endowment
 Launch or reinvigorate planned giving program
 To conduct an endowment campaign
 Staff documents
 Endowment procedures
 Investment procedures
 Planned giving procedures

27.  Partner with a community foundation
 Chronicle of Philanthropy on line article:
philanthropy.com/free/articles/v16/i05/05002201
.htm
 Presentation / attachments
(www.acso.org)
 Endowments are:
 usually a helpful vehicle
 involve much responsibility
 can be easy to establish and operate
 are not for the faint-hearted