A Year of Transition: the Greater Harrisburg Foundation Is Now
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TFEC-103_annual_f.qxd 4/20/05 5:29 PM Page 1 A Year of Transition: The Greater Harrisburg Foundation Is Now for Enhancing Communities 2005 Report to the Community Component Regional Foundations: The Greater Harrisburg Foundation (est. 1920) The Mechanicsburg Area Foundation (est. 1986) The Franklin County Foundation (est. 1987) 200 North Third Street The Perry County Community Eighth Floor, PO Box 678 Foundation (est. 1987) Harrisburg, PA 17108-0678 for Enhancing Communities 717.236.5040 The Camp Hill Community F: 717.231.4463 Foundation (est. 1996) www.tfec.org The Dillsburg Area Foundation (est. 2004) TFEC-103_annual_f.qxd 4/20/05 5:29 PM Page 3 1 for Enhancing Communities Table of Contents Mission Statement: Letter from the Chairman and President & CEO . 2–3 Financial Highlights . 4–5 To stimulate philanthropy and enhance the quality of life in the community through accumulating, managing Funds, Trusts and Projects . 6–19 and disbursing financial assets, and to serve as a catalyst Management Services . 20 and neutral convener to meet a wide range of community needs in the south central Pennsylvania counties of The Whitaker Foundation Regional Program . 20 Cumberland, Dauphin, Franklin, Lebanon, and Perry, The Legacy Society. 21 and also in the Dillsburg area. Standing Committees . 22–23 Statement of Philosophy: Board of Directors . 24–25 Staff . 24–25 The Foundation for Enhancing Communities: • Stimulates innovative projects and programs and encourages collaborative approaches that address emerging or unmet needs; • Promotes solutions that confront the causes of problems, with special emphasis on empowering the disadvantaged and the underserved; • Reflects the diversity of our community in The Foundation’s planning, decision-making and grantmaking; • Respects individual concerns of citizens while striving for community solutions. Organization: The Foundation for Enhancing Communities, a public foundation, is incorporated under Pennsylvania law as a 501(c)(3) nonprofit organization. Contributions to The Foundation are deductible to the fullest extent allowed by the Internal Revenue Code. The Foundation’s Board of Directors serves as the governing body, guided by The Foundation’s bylaws. TFEC-103_annual_f.qxd 4/20/05 5:29 PM Page 5 2 3 Letter from the Chairman and President & CEO The basic thought we would like to convey to you is five county region of Cumberland, Dauphin, Franklin, And we certainly have projects – 12 new ones in Our investment returns in 2003 were fourth best of all that The Foundation is no longer your grandmother’s Lebanon and Perry, as well as in the Dillsburg area. 2004 for a total of 52; from AIDS to Early Childhood community foundations in the U.S., and since we have community foundation. The foundation is dramatically Training to Equity for Gays and Lesbians to the put this investment policy into place, we rank in the top We have adopted a new name to reflect this position. different than the organization we have been through Capital Area Coalition on Homelessness, to name quartile in the same universe. Our investment returns We are now The Foundation for Enhancing Communities. the first three-quarters’ century of our existence. In the but a few. The major project we have had for the last in 2004 were 16.0% for Model E and 12.0% for Model A. past nine years, building carefully step by step on that Our assets have grown since 1996 from that $5 five years has been The Whitaker Foundation Regional Special thanks to Connie Siegel and our hard working base of 75 years, we have crafted a modern, forward million base to more than $41 million today, and in Program in which we administer on their behalf a Investment Advisory Committee for these superb results. looking, and sophisticated community foundation that 2004 we gave out more than $4 million in grants. $2 million grant program for math and science and We are sad to note that Joan Holman’s 10 year tenure is in the forefront of community foundations nationwide. economic self sufficiency. 2005 will be the final year for We have a multitude of new products, reflecting our on the board has ended. May she rest in peace. We will the program in this form, at the reduced level of We are no longer an organization with $5 million in philosophy that each donor is a unique individual. We always remember Joan’s wisdom, wry sense of humor $1 million. However, we were delighted to receive from endowment as we were in 1996, giving out less than work with our donors on this basis in establishing our and basic humanity. Bob Zullinger has also departed The Whitaker Foundation in late 2004 a $1 million $500,000 in grants annually and managing a few relationship with each of them and in making changes from The Board after three years of service. We could endowment fund, the earnings and principal of which projects. Today, following our carefully crafted growth in that relationship down the road if that should prove always count on “Mr. Franklin County” for his wise will benefit math and science programs over the next strategies and taking a number of plays from the to be advisable. Flexibility is the key to our approach. and seasoned counsel. We will miss them both greatly. 15 years. playbook of our consultants, The Greater Kansas City In addition to our traditional portfolio of endowment We have reached our current position because of a Community Foundation, a national thought leader Our investment performance deserves special mention. products, we have created non-permanent donor total team effort by our Board of Directors, committee in the field, we have evolved to a donor focused, When we put our new investment policy into place in advised funds; we have instituted arrangements whereby members, consultants, our legal counsel, Spencer multi-divisional, and flexible philanthropic organization 1996, we stated that our purpose was to obtain market we provide management services to other foundations, Nauman, and especially our very effective staff. We which works for the good of the communities in our returns over time. In turn, we indicated this meant that as well as backroom administrative services to nonprofit thank them all. But it is especially our donors to whom investments in our Model E would be roughly proportional organizations; and we have created funds which, upon we are most grateful for their continuing generosity to to the market capitalization of the U.S. Stock Market. a donor’s request, allow other approved individuals or the community. At the core it is they who make all of Index funds had demonstrated that over a long period organizations to provide investment management this possible. of time their performance would beat a high percentage services. We are increasingly exercising our capability of actively managed equity funds, and it has been our to receive non-traditional assets as charitable belief that we were not smart enough to consistently contributions, such as real estate, art, coin collections, pick in advance one or more of those active managers. closely held business stock, and the like. Increasingly in recent years we have also invested in William Lehr, Jr., Chairman We now have six regional foundations: The Greater international equity funds to provide diversification to Harrisburg Foundation, The Mechanicsburg Area the U.S. Market. For our fund holders interested in a Foundation, The Perry County Community Foundation, fixed income component, we have provided a Model A The Camp Hill Community Foundation, The Franklin in which 30% of the funds are invested in fixed income Janice R. Black, President & CEO County Community Foundation and our newest, The and 70% invested in equities. In recent years we have Dillsburg Area Foundation. allowed our fund holders to select the equity/fixed We are finding new customers, from both the Executive income mix with which they are most comfortable. and Legislative branches of the Commonwealth, to Nine years of investment performance shows Model E nonprofits who entrust us with the management of at 9.8% compared with its benchmark of 9.7%, while their endowment, to more than 60 new individuals in Model A’s 9.3% return was equal to its 9.3% benchmark. 2004, in addition to the more than 600 who had established funds in the past. TFEC-103_annual_f.qxd 4/20/05 5:29 PM Page 7 4 5 Foundation Assets at 12/31/04 $41,769,635 100.0% Financial Highlights Other Assets Donor and Committee 0.2% Advised Funds 11,870,260 Special Projects 2.9% In and Out Funds 650,825 Field of Interest Funds McKonly & Asbury, LLP, certified public accountants, audited and endorsed without qualification The Foundation’s financial statements. Provisional Funds 392,710 6.4% Advised Funds Total Unrestricted 30.9% Statement of Financial Position (December 31, 2004 and 2003) Advised Funds Total 12,913,795 30.9% Funds 9.6% Assets 12/31/2004 12/31/2003 Designated/Restricted Funds 8,214,232 19.7% Cash and investments at market value $ 33,308,064 $ 26,828,932 Organizational/ Receivables 295,982 256,697 Split Interest Agreements (Trusts) 8,076,831 19.3% Agency Funds 11.0% Designated/ Beneficial interest in irrevocable trust 50,000 50,000 Organizational/Agency Funds 4,576,270 11.0% Restricted Funds Prepaid expenses 10,929 – Unrestricted Funds 4,024,688 9.6% 19.7% Furniture and equipment (net) 19,606 32,331 Field of Interest Funds 2,688,412 6.4% Split interest agreements 8,085,054 7,714,303 Special Projects 1,195,094 2.9% Split Interest Total assets $ 41,769,635 34,882,263 Agreements (Trusts) Other Assets 80,313 0.2% 19.3% Liabilities and Net Assets