partners in progress

2019 ANNUAL REPORT Since its founding in 1924, The Duke Endowment has had the letter from our leaders privilege of supporting high quality organizations across North Carolina and South Carolina. Over our 95 years, we have worked together to safeguard children, strengthen health care, bolster education and fortify spiritual life. Our communities face daunting hurdles, and gaining ground toward change can prove difficult. Joining with strong partners — grantees, foundations, public systems, experts in the field — provides the best chance for impact. Today, amid the crisis created by COVID-19, this is even more true. The pandemic compounded persistent challenges — and even as it eases, its heavy toll will long affect our grantees, the essential services they provide, and the communities and families they are trying so hard to help. The Endowment is committed to working framing our philanthropic with our partners to support the Carolinas and the people approach who live here. Recently at The Duke Endowment, We chose the theme for this year’s Annual Report before the staff members collaborated across coronavirus impacted our lives so deeply, and now “Partners in teams to explore the roles we play Progress” seems especially timely. Health officials rightly urged us in our philanthropic partnerships. to stay apart to limit the virus’ spread, but it will take a collective effort to put our communities and families, especially the most We identified each program vulnerable among us, on a track toward recovery. Coming to the area’s “philanthropic approach” table to share goals, strategies and resources is key to meaningful, by considering our founder’s sustained progress. directives, current challenges and opportunities, and the impact our On the following pages, we invite you to read stories of how grantmaking dollars might make we engage as “collaborating partners” in our Child and Family relative to other funding in the Well-Being program area, “innovating partners” in Health Care, field. We hosted panels, forums and “contributing partners” in Higher Education, and “initiating conversations to gather feedback partners” in Rural Church. We also share an update on our place- from grantees and stakeholders. based initiative in Guilford County, North Carolina, that is focused on children prenatal to age 8. While no single model of effective As hoped, the effort helped us philanthropy applies across all of our program areas, you will see shape and sharpen our strategies. common themes, including the importance of system change, It pushed us to reflect on how our evidence building and communicating what we learn. goals and grantmaking align to In closing, we want to pay tribute to a beloved member of achieve positive outcomes — or, our Board, Wilhelmina M. Reuben-Cooke, who died on October put more simply, why we direct 22, 2019. Elected a Trustee in 2007, Mrs. Reuben-Cooke served our resources the way we do. To over the years as Chair of our Committee on Educational borrow from evaluation consultant Institutions and Chair of our Committee on Trustees and Michael Quinn Patton, the analysis Governance. A generous mentor and inspirational leader, helped us “make explicit what is she had the unique ability to draw people together as often only implicit.” partners toward a common good. We will miss her wisdom, guidance and friendship.

BOARD CHAIR PRESIDENT

1 philanthropic expanding support approach For Keily, getting her 8-year-old ready for school had become a The Child and Family dreaded ritual. She’d find him in bed instead of getting dressed or Well-Being program area playing instead of eating breakfast. Nagging escalated to shouting; views its grantmaking approach as advancing knowing that she’d be late for work — again — made her temper and supporting change boil. When Keily heard about The Incredible Years, a training as a collaborating partner program that builds effective parenting skills, she signed up. with public agencies and private organizations to “Something had to change,” the North Carolina mom says. prevent, treat and mitigate “I learned how to develop clear schedules and better communicate the effects of child expectations about behavior. Our relationship is stronger and maltreatment and improve there’s much less tension between us.” child well-being outcomes. In the Carolinas, public and private partners have been working “ I learned how to develop clear together to make sure that more caregivers have the resources schedules and they need to create safe, stable and nurturing environments for better communicate children. The partnerships include state agencies, nonprofits, a expectations university team and The Duke Endowment. The goal is to prevent about behavior. Our relationship is the consequences of abuse and neglect by making evidence-based stronger and there’s programs available to all children and families in both states. much less tension between us.” “These cross-sector groups are committing to a shared mission, with everyone contributing different resources and expertise,” says Ravenel Curry, chair of the Endowment’s Committee on Child and Family Well-Being. “Everyone is at the table to help children thrive and families succeed.” In North Carolina, the Endowment, the N.C. Division of Social Services (DSS) and the North Carolina Partnership for Children are funding The Incredible Years and Strengthening Families Program. DSS, the Division of Public Health and the Endowment are also funding the Triple P Positive Parenting Program. For each program, the Endowment’s funding focuses on implementation support offered by The Impact Center at UNC Chapel Hill’s Frank Porter Graham Child Development Institute (FPG) and Prevent Child Abuse North Carolina. In South Carolina, beginning with three counties, the Endowment is working with Children’s Trust to expand Triple P across the state. The Impact Center at FPG is partnering with Children’s Trust to ensure implementation support. The Endowment, the S.C. Department of Social Services and Children’s Trust are also supporting the Strengthening Families Program statewide. Will Aldridge, director of The Impact Center at FPG, believes these strong partnerships are essential for lasting change. So far, program outcomes in both states are exceeding expectations and, in the case of Strengthening Families, the outcomes exceed national norms. “We’ve tried business as usual for decades — a single organization’s program here; a state agency initiative there,” Aldridge says. “But even with pockets of excellence, nothing has been sufficient to create success at scale. Working arm-in-arm — doing ‘business unusual’ — is key to what we’re accomplishing now.”

2 3 supporting patients philanthropic approach As a community health worker in Greenville, South Carolina, Barb Dendy spends her days supporting at-risk patients in their The Health Care program area homes, helping them navigate their medical and social needs. is an innovating partner that “Miss Barb,” as her clients call her, arranges transportation to aims to improve health status clinics. She makes sure prescriptions are refilled. She lines up and reduce health disparities access to nutritious meals. in the Carolinas. Our impact can be maximized by working “To truly change someone’s health status, you must also with health systems to identify address food insecurity, stable and safe housing, literacy, and cultivate innovative transportation, personal relationships and supports,” she says. models of care that have the potential to improve health “My goal is to be the trusted person who can confront those while realizing scale and challenges, connect patients to resources and help people sustainability within the make positive changes for good health.” larger system. Amid national health care reform efforts, and with a bigger “ My goal is to be the trusted person spotlight on how social determinants impact our health, who can confront community health workers have emerged as a promising way those challenges, to reduce disparities, lower costs and improve outcomes for connect patients vulnerable patients. By encouraging healthy behaviors and to resources and

help people make focusing on holistic needs, community health workers can be positive changes important members of care delivery teams, especially in rural

for good health.” and underserved areas. According to several studies, community health workers and the interventions they deliver can improve chronic disease control, quality of care and mental health, and reduce unnecessary trips to the emergency room and hospitalization. In 2019, The Duke Endowment partnered with the BlueCross BlueShield of South Carolina Foundation and the University of South Carolina’s Arnold School of Public Health to help South Carolina take a leading role in rigorously testing and demonstrating the model. One goal is to expand the workforce pipeline through recruiting, training and field placement. Researchers will also measure economic return on investment and examine how new payment models can sustain services. Five pilots will look at how the community health worker role functions in diverse health care settings. “Right now, there aren’t enough skilled community health workers to meet demand,” says Charlie Lucas, chair of the Endowment’s Committee on Health Care. “The Endowment’s goal is to give more communities a chance to understand and implement this promising intervention — and give more Carolinians an opportunity to lead full lives.”

4 5 Program evaluation is ongoing, but the Faculty Leadership developing faculty Development initiative is already contributing to the higher education sector. At a recent conference of the Association of leaders American Colleges and Universities, for example, representatives from the four schools presented their work in a session At many colleges and universities, professors who accept moderated by a Duke Endowment program officer. leadership positions within their departments or as members of the administration receive little training for their new roles. “The payoff comes as department chairs, program leaders and While they may have had successful careers as teachers deans continue to build the leadership skills to engage most and researchers, they face new challenges when it comes to effectively with each other and with all faculty,” says Fuji Lozada, managing an academic unit or leading a university committee. an associate dean at Davidson. “Ultimately, this strengthens the experience for our students.” Davidson College, Duke University, Furman University and Johnson C. Smith University have been working together to address this important training need. With funding from The philanthropic Duke Endowment, they’ve launched initiatives focused on approach building essential leadership skills needed for today’s higher education landscape.

“ The Endowment’s “After hearing from the chief academic officers at all four The Higher Education support has allowed schools that leadership development was a critical issue for program area is a the schools to create recruiting, developing and retaining top faculty, we knew that contributing partner that programs that aims to promote the long- the Endowment could contribute to the solution,” says Bill address their unique term success of Davidson campus priorities, Barnet, chair of the Endowment’s Committee on Educational College, Duke University, while sharing insights Institutions. “The Endowment’s support has allowed the schools Furman University and best practices to create programs that address their unique campus priorities, and Johnson C. Smith along the way.” while sharing insights and best practices along the way.” University so that they may effectively serve their At Duke, the grant supports the initiatives of the university’s students and the Carolinas. first Vice Provost for Faculty Advancement, hired to oversee efforts that strengthen faculty recruiting and provide tools for success. His office hosts the university’s “Leading an Academic Unit” program, which offers a year-long workshop series with sessions on topics such as effective communication strategies and fostering a respectful teaching and learning environment. At Furman, the funding helped advance the work of the university’s new Faculty Development Center, which provides sessions on listening with empathy, conflict management, giving and receiving feedback, and other topics. Workshops used cohorts to strengthen social networks and professional growth. The university also created a mentoring program that matches strong department chairs with professors who are new to the role. Davidson and Johnson C. Smith, with campuses just 20 miles apart, chose to work together, pairing faculty from each school for dialogue and problem-solving. Along with individualized executive coaching, the program offers group sessions on managing change, approaching difficult conversations and developing a leadership vision. The first cohort began working together in 2019.

6 7 repurposing existing space In one rural town, a vacant church will reopen as a much-needed women’s shelter. In another, an empty fellowship hall will offer space for community health services. Unused land at a third church will give rise to affordable housing for seniors. Those are just a few of the successes coming from Seeds of Change, a training program that helps United Methodist churches in North Carolina find innovative ways to use their property and reclaim a vital role in their communities. The program began in 2015 with a $415,000 grant from The Duke Endowment to Wesley Community Development, a nonprofit that was founded with Endowment support in 2002. With research showing that church real estate is often underused and overlooked, the Endowment wanted to help the denomination find a better system for managing its property. The work is part of the Endowment’s Church Legacy Initiative, which seeks to support congregations as they learn how to use their assets for “ For many the communities they serve. congregations, especially in some “For many congregations, especially in some of our rural regions, of our rural regions, unused land and empty buildings have become more of a burden unused land and than an asset,” says Dr. Dennis Campbell, chair of the Endowment’s empty buildings Committee on Rural Church. “The Endowment wants to help them have become more of a burden than discover ways to use those resources in meaningful ministry an asset.” to others.” philanthropic Pastors and lay leaders from more than 40 churches have approach participated in Seeds of Change. During workshops, they calculate the percentage of time their facilities are used during the week — on The Rural Church program average, it’s 12 percent — and study demographics to learn about area takes the approach pressing community challenges. They share concepts with each of an initiating partner other and develop action plans to discuss back home. that aims to strengthen United Methodist systems Some participants leave with ideas for repurposing existing space. in North Carolina so that Others see potential in selling. Congregations have launched rural congregations can outreach programs, built community gardens and leased empty fulfill their calling to foster human, community and space for coworking. economic advancement. Several projects are in the pipeline. One church is modifying a structure to help a food bank provide meals. In Gaston County, a congregation is transitioning its church into offices for local nonprofits. Another church is redeveloping a 20,000-square-foot building to house a mix of retail and offices. “Churches can foster new futures for families, provide safe housing for seniors and contribute to healthier and more resilient communities — but first they have to accept the need to do something different,” says Wesley’s president, Joel Gilland. “Our goal is to plant seeds of possibilities and help congregations move to the next step.”

8 9 improving outcomes for children What if you could give every child in a community a better chance at success in school and life? That’s the aim of Get Ready Guilford, an ambitious initiative in Guilford County, North Carolina, spearheaded by The Duke Endowment and Ready for School, Ready for Life, a leading early childhood organization. The goal is to improve individual and population-level outcomes among 55,000 children, prenatal through age 8, in five areas: planned and well-timed pregnancies; healthy births; on-track development for infants, toddlers and preschoolers; school readiness at kindergarten; and success by third grade. Families are at the heart of this initiative and Ready Ready’s thriving Parent Leader Network has played a valued role in shaping each “Everyone wants step. At monthly meetings, parents test and generate ideas, give to make sure the feedback, and advocate for their own needs and others. parent perspective is heard — and “These parents are change agents, consultants and partners,” that families across the county feel says Amber Robinson, who leads the network and serves on included — as Ready Ready’s board. “Everyone wants to make sure the parent excitement about perspective is heard — and that families across the county feel this initiative grows.” included — as excitement about this initiative grows.” Phase I of Get Ready Guilford is focused on families and children prenatal to age 3. First year highlights have included designing a community-wide case management system and expanding get ready access to the three evidence-based programs that anchor the guilford initiative initiative: Nurse-Family Partnership, Guilford Family Connects and HealthySteps. Beginning in 2022, Phase II will expand services to ages 3 to 5, while laying the groundwork for serving children along the entire developmental continuum. Leaders expect the work to span a decade. For its first three years, Get Ready Guilford has received support from Blue Meridian Partners, a pioneering philanthropic collaborative that finds and funds scalable solutions to problems that limit economic mobility and trap America’s young people and families in poverty. The Endowment joined in 2015. Blue Meridian has approved $32.5 million for Get Ready Guilford, with The Duke Endowment contributing half of that investment. For the Endowment, this work is part of a strategic emphasis on early childhood being carried out through its four program areas and select “place-based” initiatives. “Our role in Guilford is to help catalyze and build on the positive social change that has long been a part of the community,” says Dr. Jean Spaulding, chair of the Endowment’s Get Ready Guilford Committee. “With many other partners, we are working to ensure that every family has what it needs individually to put the entire county on a path to better and more equitable early childhood outcomes.”

10 11 2019 financials and grantmaking investments expenses & grants

During 2019, the investment return on the Since James B. Duke’s death in 1925, Endowment’s portfolio was 11.5 percent. the assets of The Duke Endowment Investment performance benefited from have achieved significant growth, from increases in global equity and private capital. $107 million to $3.9 billion. During the total The Endowment’s portfolio increased in value same time, over $4 billion has been expenses & grants from $3.6 billion to $3.8 billion from December distributed in grants. 31, 2018, to December 31, 2019, impacted by investment returns, grants and expenses. * The Endowment’s total assets were $3.9 billion administration at year end. expenses

For the 10-year period ending December 31, $13.7M $181.3M 2019, the Endowment’s investment portfolio, net of fees, returned 9.6 percent annualized, program outperforming its policy benchmark, which expenses was up 6.6 percent, and a 70 percent MSCI All Country World Index/30 percent Bloomberg $8.7M provision grants distributed Barclays U.S. Aggregate Bond Index benchmark, for taxes which was up 7.5 percent annualized over the $2.8M $156.1M* same period.

total expenses assets higher $25.2M education $64.4M $3.9B distributed

$93,531,000 in new grants approved rural investment church return health care $16.4M distributed distributed $44.7M $35,211,495 in new distributed 11.5% over grants approved $34,912,314 in new child & family grants approved well-being $15.7M $4B distributed cross program/ $18,831,069 in new special opportunity in grants grants approved since 1925 $14.9M distributed $3,250,000 in new grants approved

184 new commitments • 421 grants paid

12 Find more information about our grantmaking and audited financial statements atdukeendowment.org. *May not sum to total due to rounding 13 meet our leaders

staff trustees

Ashleigh J. Allessio Anmar Y. Jerjees Matthew D. Sharp Dennis M. Jean G. Senior Administrative Program Analyst, Director, Information Minor M. Shaw Campbell Spaulding Specialist, Health Care Rural Church Technology Chair Vice Chair Vice Chair Greenville, SC William F. Bacon Jay E. Kennedy Natalie C. W. Smith Durham, NC Durham, NC Director, Evaluation Program Officer, Senior Accountant Health Care Laila A. Bell Eric D. Stevens Associate Director, Jeri F. Krentz Administrative Specialist Learning & Evaluation Associate Director, K. Todd Walker Communications Chris M. Collins Managing Director, Associate Director, Elizabeth A. Kupec Investments William Ravenel B. John F.A.V. Cecil Health Care Senior Administrative Specialist, Barnet III Curry III Kristi K. Walters Asheville, NC Finance/Information Technology Spartanburg, SC New York, NY Todd W. Dalrymple Program Officer, Program Officer, Rhett N. Mabry Higher Education Special Initiatives President Stacy E. Warren Eric E. Frazier Tania G. Mapes Program Officer, Digital Communications Human Resources Manager Health Care Strategist Trena McClure Kimberly M. Webb Constance F. Harris E. Kate A. Gaskin Senior Administrative Executive Assistant, Pamela L. Davies Gray DeLoach Jr. Senior Administrative Specialist, Rural Church President’s Office Charlotte, NC Winston-Salem, Specialist, Child & Family Hartsville, SC Susan L. McConnell Robert R. Webb III NC Well-Being Director, Higher Education Director, Rural Church Paula W. Greene Director, Human Resources Anita W. West Events Manager Laura A. Peres Accounting Manager Julie A. Hale Project and Facilities Manager Tamika D. Williams Senior Administrative Charity L. Perkins Associate Director, Specialist, Health Care Thomas S. Charles C. Director, Communications Child & Family Well-Being J. Trent Jones Kenan III Lucas III Melinda O. Hardin Sun Valley, ID Phillip H. Redmond Jr. Brittany S. Worden Chapel Hill, NC Charlotte, NC Accounting Specialist Director, Child & Family Fellow Charisma J. Hibbler Well-Being Lily H. Zhang Senior Administrative Kristen R. Richardson-Frick Associate Director, Specialist, Evaluation Associate Director, Data & Analytics Lin B. Hollowell III Rural Church Diana Zilberdrut Director, Health Care Karen H. Rogers Project Specialist, Clarence G. Kenneth D. Judy Woodruff Stella J. Jalon Chief Financial Officer/Treasurer Communications/ Newsome Weeks Jr. Senior Administrative Specialist, Investments Washington, DC Meka S. Sales Mint Hill, NC Charlotte, NC Higher Education/Human Director, Special Initiatives Resources

retirement

In 2019, we said goodbye to long-time staff member Ronda Dwyer and wished her a wonderful retirement. Ronda began her Endowment career in 1998, spending most of her time in our Health Care program area as a Senior Administrative Specialist. She joined our Finance department in 2017. We are grateful for her many years of service.

14 15 Blue Meridian news Partners In 2019, we renewed our commitment to Blue Meridian Partners, a pioneering philanthropic model for finding and new trustee Pamela Davies Welcome to Dr. Pamela L. Davies, our new Board funding scalable solutions to the member. Dr. Davies served as the 20th president problems that trap young people of Queens University of Charlotte from 2002 to and families in poverty in the United 2019. She now holds the title of President Emerita States. In the Carolinas, Blue Meridian and is a faculty member in the McColl School of is helping Wendy’s Wonderful Kids Business. In addition to serving on the boards and Youth Villages LifeSet address the of Sonoco Products Company and the Cato adversities of prolonged stays in foster Corporation, she chairs the national board of the care; Nurse-Family Partnership and YMCA. “Pamela’s background as a distinguished HealthySteps give children a stronger leader in higher education and strategic planning start in life; and Upstream USA reduce will add a valuable voice to our work,” said unplanned pregnancies. In addition, Endowment Board Chair Minor Shaw. “Through one of Blue Meridian’s two regional her extensive community leadership, she has strategies is unfolding in Guilford developed expertise in the opportunities and County, North Carolina. Led by The challenges that shape the Carolinas today.” Duke Endowment, the Get Ready Guilford Initiative seeks to improve individual and population-level outcomes among 55,000 children, beyond prenatal through age 8. $4 billion

Mirroring his business achievements, fellowship Mr. Duke’s philanthropy reflected redesign happy his ability to think big and build on anniversary a grand scale. He established the Endowment in 1924 with $40 million and left an additional $67 million from his estate in 1925. Each year, just as our founder mandated, we strive to use those resources where they have the greatest impact and outcomes. The Endowment has now surpassed $4 billion in grants distributed. We thank our grantees, past and present, for sharing Mr. Duke’s commitment to making a difference.

After pausing our Fellowship program for fine-tuning, we were excited to unveil The Duke Endowment turned 95 in our redesigned program in 2019. The 2019, giving us a special opportunity same goals Fellowship now focuses on talented new name to reflect on Mr. Duke’s legacy. But In his Indenture of Trust, Mr. Duke designated a candidates who have a bachelor’s as we looked back, we also began portion of his philanthropy to organizations that care degree, but not necessarily an advanced looking ahead. With our 100th for children who are without the benefit of being degree or extensive work experience; anniversary just around the corner in supported by family or who might be at risk of losing it is one year long instead of two; 2024, we will mark a milestone that such support. Over the years, we addressed his intent and it is project-based. Our aim stays few other private foundations have through our Child Care program area — which is now the same: to give emerging leaders reached. Our Centennial Committee called Child and Family Well-Being. Changing the name exposure to philanthropy and help them is already hard at work developing was an intensive, thoughtful process, but we believe it develop skills while contributing to the plans to celebrate the Endowment’s helps us better communicate our founder’s wishes, our Endowment’s mission. We are proud history, share insights from a century values and our strategies. of this dynamic program and eager to of grantmaking and highlight future welcome future Fellows to our work. opportunities for the Carolinas.

16 17 2024 looking ahead 1924 to our 100th year

The Duke Endowment in Charlotte, North Carolina, is a private foundation established in 1924 by industrialist and philanthropist James B. Duke. We seek to fulfill his dream for the Carolinas by enriching lives and communities through children’s services, health care, higher education and rural churches. Mr. Duke’s legacy endures today in every life touched, every institution advanced and every innovation discovered.

800 East Morehead Street Charlotte, North Carolina 28202

dukeendowment.org 2019 grantmaking table of contents

2 2019 grantmaking

3 child & family well-being

6 health care

10 higher education

12 rural church

15 cross program/special opportunity 2019 grantmaking distributed In 2019, The Duke Endowment distributed $156.1 million through 421 grants, some of which were approved in previous years; 184 new grants were approved, totaling nearly $181.3 million, some of which will be paid in future years. $156.1M * in 2019

*May not sum to total due to rounding

distributed over

$4B

in grants since 1925

higher rural education church

child & family $16.4M well-being $64.4M distributed distributed $93,531,000 in new $35,211,495 in new $15.7M grants approved grants approved distributed $18,831,069 in new grants approved health care

$44.7M distributed $34,912,314 in new grants approved

cross program/ special opportunity $14.9M distributed $3,250,000 in new grants approved

The Duke Endowment | 2019 grantmaking 2 philanthropic child & family well-being approach

The Child and Family Well-Being program area views its grantmaking approach as advancing and supporting change as a collaborating partner with public agencies and private organizations to prevent, treat and mitigate the effects of child maltreatment and improve child well-being outcomes.

$15.7M distributed $18,831,069 in new grants approved

The Duke Endowment | 2019 grantmaking | child & family well-being 3 child & family well-being

North Carolina

Chapel Hill Frank Porter Graham Child Development Institute $2,151,921 To support the statewide implementation for Triple P in North Carolina and South Carolina.

Rockingham Richmond County Department of Charlotte Elon Homes of North Carolina Social Services $100,000 To continue supporting a residential transitional $803,780 To support the use of the Treatment Outcome living program on the campus of Johnson C. Package (TOP). Smith University.

Statesville Children's Hope Alliance Charlotte Pat's Place Child Advocacy Center $3,065,787 To evaluate a psychiatric residential reduction $241,000 To create a Mecklenburg County clinical services treatment model using the Treatment Outcome project. Package (TOP).

Charlotte Safe Alliance Thomasville Baptist Children's Homes of North Carolina $200,000 To reduce the risk of abuse and neglect in $550,000 To support the statewide expansion of a family Mecklenburg County. foster care program.

Charlotte The Relatives $195,000 To continue supporting a transition living South Carolina specialist and housing subsidy program for youth aging out of care. Aiken Children's Place $743,000 To implement SafeCare and the Incredible Years. Durham Duke University School of Medicine $286,904 To create an analytic framework for predicting Charleston Dee Norton Child Advocacy Center child maltreatment risk. $1,910,000 To expand Project BEST.

Fayetteville Cumberland County Department of Social Services Columbia Epworth Children's Home $885,000 To continue piloting Cumberland County's child $622,000 To continue support for the Institute for Child welfare practice redesign for older youth in care. and Family Well-Being.

Lake Columbia Fact Forward Waccamaw Boys and Girls Homes of North Carolina $645,000 To improve the quality of adolescent $312,000 To replicate the Success Coach model. reproductive health services in South Carolina.

Morrisville Prevent Child Abuse North Carolina Columbia Palmetto Association for Children & Families $800,000 To support implementation of The Incredible $210,000 To help member organizations prepare for the Years, Strengthening Families and Triple P in Family First Prevention Services Act. North Carolina.

Columbia The South Carolina Department of Raleigh Benchmarks Juvenile Justice $118,103 To expand Partnering for Excellence to two $418,800 To support a transitional living program for eastern North Carolina counties. youth exiting secure care.

Raleigh NC Child Columbia South Carolina Department of Social Services $376,000 To strengthen and improve North Carolina's early childhood mental health system. $532,000 To build the capacity of child advocacy centers in South Carolina.

Raleigh Wake County Human Services, Division $485,400 To implement a statewide practice model, child of Child Welfare and family teams and the Child and Adolescent $1,094,128 To expand the Children's Health and Needs and Strengths (CANS) tool. Development Program to include nurse care coordination and home visitation for children and families served by child welfare.

The Duke Endowment | 2019 grantmaking | child & family well-being 4 child & family well-being, continued…

Greenville Institute for Child Success OTHER $100,000 To understand the factors linked to child and Chicago, IL Chapin Hall Center for Children family involvement in the child welfare system. $508,681 To support Family First Prevention Services readiness planning and initial implementation in North North Carolina. Charleston Carolina Youth Development Center $72,600 To support a director of continuous quality Hackensack, NJ Family Focused Treatment Association improvement and implementation. $948,965 To test a kinship care framework in North Carolina that addresses the therapeutic needs North of youth. Charleston Helping And Lending Outreach Support (HALOS) $420,000 To improve outcomes for children in kinship care.

Summerville Dorchester Children's Advocacy Center $35,000 To build agency capacity to implement and sustain Parent-Child Interaction Therapy.

The Duke Endowment | 2019 grantmaking | child & family well-being 5 philanthropic approach

The Health Care program area is an innovating partner that aims to improve health status and reduce health disparities in the Carolinas. Our impact can be maximized by working with health systems to identify and cultivate innovative models of care that have the potential to improve health health care while realizing scale and sustainability within the larger system.

$44.7M distributed $34,912,314 in new

grants approved

The Duke Endowment | 2019 grantmaking | health care 6 health care

North Carolina

Albemarle Stanly County Health Department $130,000 To expand a school-based preventative and treatment program in Stanly County.

Asheville MemoryCare Charlotte Novant Health Presbyterian Medical $400,000 To address the growing need for dementia care Center Foundation for patients and caregivers. $400,000 To establish a telehealth program for vulnerable and underserved people in the Charlotte region. Burlington Alamance County Children's Dental Health Clinic $317,000 To increase access to cardiac rehabilitation for underserved patients. $430,000 To establish a school-based preventative and treatment program in Alamance County. $275,000 To develop a medical-legal partnership to help patients and their families address social Cary Foundation for Health Leadership and determinants of health. Innovation $1,000,000 To expand a shared technology platform for $200,000 To provide free eye exams and glasses to coordinating care delivery in North Carolina. Mecklenburg County students.

$954,600 To expand the North Carolina Oral Health Dunn Harnett Health System Collaborative. $289,000 To establish a community paramedicine program in Harnett County. $507,908 To expand the regional community health needs assessment in North Carolina. Fayetteville Cape Fear Valley Health System Chapel Hill University of North Carolina at Chapel Hill $1,000,000 To expand the psychiatry resident program. $4,200,000 To expand a two-state initiative that will increase breastfeeding rates throughout the Carolinas. Flat Rock Four Seasons Compassion for Life $150,000 To expand a collaborative medical education $500,000 To enhance adolescents' engagement in their model for primary care clinicians to provide health care. palliative care in rural and underserved areas.

$255,000 To evaluate workforce and care delivery changes needed to improve outcomes, decrease costs Gastonia Gaston Family Health Services and expand access to care. $430,000 To expand school-based preventative and treatment programs in Lincoln, Davidson and Davie counties. Charlotte Atrium Health Foundation $440,000 To improve health in rural communities by implementing a collective impact framework to Goldsboro Wayne UNC Health Care address social determinants of health. $495,000 To develop a community health worker program.

$400,000 To provide rural emergency departments with Greensboro Cone Health telepsychiatry and virtual navigation services. $240,000 To implement a new and innovative nurse $180,000 To expand cancer prevention education for staffing model for the inpatient setting. school-aged children. $190,314 To increase health care access to low-income $25,000 To plan for the development of an integrated families by providing school-based telehealth oral health and primary care model in a rural services. health care setting. Greenville East Carolina University Charlotte NC MedAssist $493,800 To advance school-based oral health programs $475,000 To expand a medication assistance program for in North Carolina. the low-income, uninsured in North Carolina. $400,000 To establish a school-based preventative and treatment program in Bertie County.

Vidant Medical Center $450,000 To expand a Healthy People, Healthy Carolinas coalition to improve population health in Pitt County.

The Duke Endowment | 2019 grantmaking | health care 7 health care, continued…

Hendersonville AdventHealth Hendersonville Smithfield Johnston Health $371,000 To improve emergency department patient care $217,000 To expand a palliative care initiative. with behavioral health navigators. $216,000 To expand a community network of care for the low-income, uninsured in Johnston and Harnett Hendersonville Pardee Hospital Foundation counties. $450,000 To expand a Healthy People, Healthy Carolinas coalition to improve population health in Henderson County. Southport J. Arthur Dosher Memorial Hospital $450,000 To expand a Healthy People, Healthy Carolinas coalition to improve population health in Kannapolis Cabarrus Health Alliance Brunswick County. $400,000 To expand school-based preventative and treatment programs in Rowan and Cabarrus counties. Winston-Salem Wake Forest Baptist Health $230,000 To establish a CenteringParenting site in Forsyth County. Kinston Kinston Community Health Center $400,000 To establish a school-based preventative and treatment program in Lenoir County. South Carolina Linville Charles A. Cannon Jr. Memorial Hospital $290,000 To establish a community paramedicine program Charleston Medical University of South in Avery County. Carolina Foundation $1,280,000 To provide joint obstetric-diabetes/ endocrinology-nutrition care to women in Lumberton Southeastern Regional Medical Center underserved areas of South Carolina using $450,000 To expand a Healthy People, Healthy Carolinas telemedicine. coalition to improve population health in Robeson County. $653,942 To provide an interprofessional team approach to diabetes management. Morrisville North Carolina Institute of Medicine $600,000 To publish the North Carolina Medical Journal. Columbia Prisma Health-Midlands $185,000 To improve nurse recruitment and retention Newton Carolina Caring through a student nurse transition program. $700,000 To provide community-based pediatric palliative care to children with serious illnesses. Columbia South Carolina Department of Health and Environmental Control Division of EMS and Trauma North Wilkesboro Wilkes Public Health Dental Clinic $528,000 To provide life-saving technology to rural emergency medical service agencies in South $130,000 To expand school-based preventative and Carolina. treatment programs in Wilkes County.

Columbia South Carolina Hospital Research & Pinehurst FirstHealth of the Carolinas Education Foundation $350,000 To redesign rural hospital and health care $300,000 To expand Working Well in South Carolina. services in Montgomery County.

Columbia University of South Carolina Educational Robbinsville Graham County Government Foundation $248,250 To establish a community paramedicine program $692,000 To establish the South Carolina Community in Graham County. Health Worker Institute.

Salisbury Novant Health Rowan Medical $580,000 To enhance quality of care through improved Center Foundation health literacy. $450,000 To expand a Healthy People, Healthy Carolinas coalition to improve population health in Rowan $565,000 To address common barriers hindering school County. children from physical activity.

$550,000 To help independent community pharmacies in Siler City Chatham Hospital South Carolina intervene in social determinants $599,000 To re-open the maternity care unit at Chatham of health. Hospital using a unique care model that can be replicated in other rural communities. $375,000 To improve health and health care through the Health Policy Fellows Program.

$150,000 To establish a Childhood Immunization Task Force.

The Duke Endowment | 2019 grantmaking | health care 8 health care, continued…

Columbia Welvista Lexington South Carolina Office of Rural Health $950,000 To expand a medication assistance program for $120,000 To evaluate community paramedicine programs the low-income, uninsured in South Carolina. in South Carolina.

$250,000 To expand school-based preventative and Little River Little River Medical Center treatment programs in Hampton County. $430,000 To expand school-based preventative and treatment programs in Horry and Georgetown Conway Conway Medical Center counties. $1,000,000 To develop a residency program for family medicine physicians. Spartanburg Spartanburg Regional Healthcare System Foundation Florence McLeod Health Foundation $584,000 To utilize patient navigators to expand cancer $650,000 To create a comprehensive lung cancer program. services to rural and underserved populations in Cherokee and Union counties. $560,000 To establish an opioid stewardship program. $412,500 To establish a community-wide initiative to increase advance care planning and utilization. $300,000 To expand antimicrobial stewardship into rural community hospitals.

Greenville Prisma Health-Upstate Other $498,000 To address food insecurity to improve health outcomes. Itasca, IL American Academy of Pediatrics $1,120,000 To establish social determinants of health Hartsville CareSouth Carolina education and training in eight pediatric residency programs across the Carolinas. $400,000 To expand school-based preventative and treatment programs in Chesterfield County.

The Duke Endowment | 2019 grantmaking | health care 9 philanthropic approach

The Higher Education higher education program area is a contributing partner that aims to promote the long- term success of Davidson College, Duke University, Furman University and Johnson C. Smith University so that they may effectively serve their students and the Carolinas.

$64.4M distributed $93,531,000 in new

grants approved

The Duke Endowment | 2019 grantmaking | higher education 10 higher education

North Carolina South Carolina

Charlotte Johnson C. Smith University Greenville Furman University $3,500,000 To provide additional operating support. $1,800,000 To provide unrestricted operating support.

$2,500,000 To help with residence hall repairs. $1,800,000 To provide unrestricted operating support.

$1,800,000 To provide unrestricted operating support. $1,800,000 To provide unrestricted operating support.

$1,800,000 To provide unrestricted operating support. $100,000 To support the academic priorities and initiatives of the new chief academic officer. $1,800,000 To provide unrestricted operating support.

$375,000 To assist with recruitment costs for six leadership positions.

Davidson Davidson College $24,000,000 To strengthen the James B. Duke Scholarship program.

$1,800,000 To provide unrestricted operating support.

$1,800,000 To provide unrestricted operating support.

$1,800,000 To provide unrestricted operating support.

$256,000 To support development and implementation of curricular and co-curricular opportunities that foster civil discourse and civic engagement.

$100,000 To support the academic priorities and initiatives of the new chief academic officer.

Durham Duke University $12,500,000 To provide unrestricted operating support.

$12,500,000 To provide unrestricted operating support.

$12,500,000 To provide unrestricted operating support.

$4,000,000 To support the university's Global Perspectives Faculty Initiative.

$5,000,000 To support Sarah P. Duke Gardens.

The Duke Endowment | 2019 grantmaking | higher education 11 philanthropic approach

The Rural Church program area takes the approach of an initiating partner rural church that aims to strengthen United Methodist systems in North Carolina so that rural congregations can fulfill their calling to foster human, community and economic advancement.

$16.4M distributed $35,211,495 in new grants approved

The Duke Endowment | 2019 grantmaking | rural church 12 rural church

North Carolina

Advance Bethlehem United Methodist Church $140,000 To support affordable housing.

Asheville Blue Ridge District Elizabeth City First United Methodist Church $915,000 To begin a faith community. $139,000 To test a summer literacy program.

Boone Boone United Methodist Church Garner North Carolina Conference United Methodist Church $172,000 To test a summer literacy program. $810,449 To provide pensions to retired ministers and widows and dependent children of deceased Brasstown Hickory Stand United Methodist Church ministers. $296,183 To support healthy food production and access. $200,000 To build communities of practice for healthy eating and local food system engagement. Candor Fairway District

$110,000 To support community development efforts for $100,000 To promote clergy well-being and resilience Latinx populations. through a Sabbath Life cohort model.

Cedar Grove Cedar Grove United Methodist Church Greensboro Boundless Impact $135,000 To expand community investment in a garden $60,000 To pilot a Center for Missional Innovation. and farm ministry.

Hayesville Hinton Rural Life Center Cullowhee Cullowhee United Methodist Church $850,000 To develop a home repair training center. $120,000 To reinstate an after-school literacy program for English-language learners. $62,305 To support a community collaborative addressing the social needs of residents in Clay $99,000 To test a summer literacy program. and Cherokee counties.

Durham Duke Divinity School Huntersville Wesley Community Development $12,000,000 To revitalize the Master of Divinity degree Corporation program. $2,505,200 To provide real estate development support to the Church Legacy Initiative. $5,727,095 To continue the Thriving Rural Communities Initiative. Huntersville Western North Carolina Conference United Methodist Church $1,125,000 To provide scholarships for the 2019 Field Education Assistant Pastors and Student Pastors $1,451,088 To support the Bishop's Emerging Leadership program. Initiative.

$664,900 To support high quality continuing education $1,167,352 To provide pensions to retired ministers and events for rural United Methodist pastors. widows and dependent children of deceased ministers. $147,325 To build clergy capacity for digital community formation. $397,113 To LEED certify the Western North Carolina Conference Center. $125,000 To support the Director of Field Education and to provide training and counseling services to $160,000 To provide diversity training for clergy and Field Education Students. congregations.

$47,500 To support the Licensed Local Pastor Course of Oxford Oxford United Methodist Church Study at Duke Divinity School. $178,500 To test a summer literacy program.

Durham Student Action With Farmworkers Pembroke Sandy Plains United Methodist Church $435,000 To support partnerships between rural churches and students to address farmworker issues. $113,000 To test a summer literacy program.

East Bend East Bend United Methodist Church $126,000 To test a summer literacy program.

The Duke Endowment | 2019 grantmaking | rural church 13 rural church, continued…

Raleigh North Carolina Council of Churches OTHER $325,000 To support financial sustainability planning and development. Decatur, GA Macedonian Ministry $942,000 To expand a clergy renewal program. $48,000 To support a Come to the Table program coordinator. Whitesburg, KY Center for Rural Strategies Red Oak Red Oak United Methodist Church $160,000 To support an initiative to empower rural women $129,000 To test a summer literacy program. leaders.

Sanford Jonesboro United Methodist Church Boston, MA Tides: Project Evident $165,000 To support Hispanic community outreach. $47,160 To support evaluation planning for the summer literacy initiative. Statesville Monticello United Methodist Church $156,000 To test a summer literacy program. Grand Rapids, MI The Colossian Forum Sunset Beach Seaside United Methodist Church $75,005 To train pastors and lay leaders in conflict transformation. $135,000 To test a summer literacy program.

New York, NY Fractured Atlas Thomasville Fairview United Methodist Church $543,032 To test the People's Supper model for civil $120,000 To test a summer literacy program. conversations in rural faith communities.

West End West End United Methodist Church New York, NY Spirit House $150,000 To support a construction and renovation $321,000 To train clergy for racial equity conversations in project for food ministry. rural faith communities.

Wilkesboro Wilkesboro United Methodist Church Conshohocken, $179,500 To test a summer literacy program. PA Center for Assessment and Policy Development Wilson West Nash United Methodist Church $220,000 To evaluate racial equity grantmaking and partnerships. $135,000 To test a summer literacy program.

$165,000 To continue evaluating the work of the Duke Divinity School Hispanic House of Studies.

Philadelphia, PA Partners for Sacred Places $616,788 To assess and document the community economic benefit of rural United Methodist churches in North Carolina.

The Duke Endowment | 2019 grantmaking | rural church 14 cross program/ special opportunity

$14.9M distributed $3,250,000 in new grants approved

The Duke Endowment | 2019 grantmaking | cross program/special opportunity 15 cross program/special opportunity

North Carolina Other

Charlotte Foundation For The Carolinas Boston, MA T. H. Chan School of Public Health, $11,000 To sponsor the 2019 Inferential Learning Series Harvard University for nonprofit leaders. $350,000 To support a longitudinal evaluation of the Nurse-Family Partnership program in South Carolina. Charlotte The Lynnwood Foundation $1,000,000 To contribute to the permanent endowment and support capital improvements. Boston, MA Year Up $1,000,000 To provide training, mentorship and work experience to unemployed and underemployed Charlotte United Way of Central Carolinas young adults in Charlotte, North Carolina. $20,000 To build community capacity for evaluation.

Multiple Davidson College, Furman University, Durham Duke University Johnson C. Smith University $35,000 To support the North Carolina Leadership $49,500 To sponsor faculty to attend the National Forum at the Sanford School of Public Policy. Humanities Center Summer Residency Program.

Durham Museum of Durham History $75,000 To support Durham's 150th anniversary. Multiple Multiple Organizations $55,000 To support philanthropic organizations and affinity groups. Durham The Hunt Institute $100,000 To improve early childhood and education policy in North Carolina and South Carolina.

$5,000 To support the South Carolina Higher Education Advisory Committee.

South Carolina

Columbia South Carolina Hospital Research & Education Foundation $20,000 To assist with health care consulting for the Get Ready Guilford Initiative.

North Charleston Reading Partners Charleston $530,000 To support a volunteer-based tutorial program for disadvantaged youth.

The Duke Endowment | 2019 grantmaking | cross program/special opportunity 16 800 East Morehead Street Charlotte, North Carolina 28202

dukeendowment.org 2019 financials table of contents

4 Report of Independent Certified Public Accountants

5 Statements of Financial Position

6 Statements of Activities

7 Statements of Cash Flows

8 Notes to Financial Statements

The Duke Endowment | 2019 financials 1 2019 financials Find more information expenses & grants about our grantmaking

Since James B. Duke’s death in 1925, the assets of The Duke Endowment dukeendowment.org have achieved significant growth, from $107 million to $3.9 billion. During the same time, over $4 billion has been distributed in grants.

administration total expenses expenses & grants $13.7M * program $181.3M expenses $8.7M provision for taxes $2.8M grants distributed $156.1M*

expenses $25.2M higher education

child & family well-being $64.4M distributed $15.7M $93,531,000 in new distributed grants approved $18,831,069 in new grants approved

rural church health care $16.4M distributed $44.7M distributed $35,211,495 in new grants approved $34,912,314 in new grants approved

cross program/ special opportunity $14.9M distributed $3,250,000 in new grants approved

The Duke Endowment | 2019 financials *May not sum to total due to rounding 2 2019 investments

During 2019, the investment return on the Endowment’s distributed portfolio was 11.5 percent. Investment performance over benefited from increases in global equity and private capital. The Endowment’s portfolio increased in value from $3.6 billion to $3.8 billion from December 31, 2018, to December 31, 2019, impacted by investment returns, grants and expenses. The Endowment’s total assets $4B were $3.9 billion at year end. For the 10-year period ending December 31, 2019, the in grants Endowment’s investment portfolio, net of fees, returned since 1925 9.6 percent annualized, outperforming its policy benchmark, which was up 6.6 percent, and a 70 percent MSCI All Country World Index/30 percent Bloomberg Barclays U.S. Aggregate Bond Index benchmark, which was up 7.5 percent annualized over the same period.

3.9 total 3.69 3.61 3.37 3.43 3.35 3.37 assets 2.95 2.74 2.80 $3.9B

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

17.1 investment 14.4 return 12.3 11.8 10.9 11.5 11.5% 6.1 5.6 4.5 2.8

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

The Duke Endowment | 2019 financials 3 Report of Independent Certified Public Accountants

Board of Trustees of The Duke Endowment We have audited the accompanying financial statements of The Duke Endowment (the “Endowment”), which comprise the statement of financial position as of December 31, 2019, and the related statements of activities and cash flows for the years then ended, and the related notes to the financial statements.

Management’s responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Endowment’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Endowment’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Duke Endowment as of December 31, 2019, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of matter We draw attention to Note 6 to the financial statements, which describes private equity investments valued at $1,269,000,394 or 33% of net assets as of December 31, 2019. The fair values of such investments have been estimated by management in the absence of readily determinable fair market values. Management’s estimates are based on information provided by the fund managers or the general partners of the private equity investments. Our opinion is not modified with respect to this matter.

Report on 2018 summarized comparative information We have previously audited the Endowment’s 2018 financial statements (not presented herein), and we expressed an unmodified audit opinion on those audited financial statements in our report dated May 17, 2019. In our opinion, the accompanying summarized comparative information as of and for the year ended December 31, 2018 is consistent, in all material respects, with the audited financial statements from which it has been derived.

Charlotte, North Carolina June 5, 2020

The Duke Endowment | 2019 financials 4 Statements of Financial Position

December 31, 2019 (With comparative amounts as of December 31, 2018)

Assets 2019 2018 Cash and cash equivalents $ 12,727,847 $ 18,580,910 Securities transactions receivable 38,474,553 3,569,305 Investments, at estimated market value (Note 6) 3,812,060,551 3,549,867,282 Land, building, furniture and equipment, net 38,320,037 39,691,537 Other assets 1,219,965 1,086,776

Total Assets $ 3,902,802,953 $ 3,612,795,810

Liabilities and Net Assets Liabilities:

Grants payable $ 20,329,033 $ 19,036,398 Securities transactions payable 5,676,072 3,659,452 Notes payable 32,324,092 33,549,988 Net deferred excise tax liability 15,123,093 8,593,117 Other liabilities 20,768,970 16,160,758 Total Liabilities $ 94,221,260 $ 80,999,713

Net assets: Without donor restrictions $ 4,452,578 $ 2,597,663 With donor restrictions Purpose restrictions 3,544,448,037 3,269,517,356 Restricted in perpetuity 259,681,078 259,681,078

Total Net Assets $ 3,808,581,693 $ 3,531,796,097

Total Liabilities And Net Assets $ 3,902,802,953 $ 3,612,795,810

See accompanying notes to financial statements.

The Duke Endowment | 2019 financials 5 Statements of Activities

For the period Ended December 31, 2019 (With summarized amounts for the year ended December 31, 2018)

TOTAL

Without Donor With Donor Revenue (Loss): Restrictions Restrictions 2019 2018 Dividends and interest income, net $ 40,809,078 $ — $ 40,809,078 $ 38,944,529 Contributions received — — — 6,450,000 Other income 2,054,500 — 2,054,500 289,392 Net realized gains on investment transactions — 191,701,262 191,701,262 209,608,293 Loss on disposal of assets — — — (1,635) Increase (decrease) in net unrealized appreciation on assets — 228,748,486 228,748,486 (145,453,661)

Total Revenue $ 42,863,578 $ 420,449,748 $ 463,313,326 $ 109,836,918

Expenses

Administrative $ 13,692,928 $ — $ 13,692,928 $ 11,588,585 Program (grantmaking) 8,666,087 — 8,666,087 7,894,534

Provision for taxes 2,755,991 — 2,755,991 4,417,689

Increase (decrease) in pension and postretirement benefit obligation 4,019,067 — 4,019,067 (970,996)

Total Expenses $ 29,134,073 $ — $ 29,134,073 $ 22,929,812

Released from Restrictions (Note 3) 145,519,067 (145,519,067) — —

Grants Approved Education $ 64,509,417 $ — $ 64,509,417 $ 63,527,491 Health Care 45,372,147 — 45,372,147 43,016,643 Child Care 14,283,188 — 14,283,188 13,755,462 Superannuated Preachers 1,975,299 — 1,975,299 1,980,592 Building Rural Churches — — — 83,000 Operating Rural Churches 14,014,410 — 14,014,410 13,960,958 Administrative Grants 320,500 — 320,500 323,500 Special Opportunities 16,918,696 — 16,918,696 17,411,934

Total Grants Approved $ 157,393,657 $ — $ 157,393,657 $ 154,059,580

Change in Net Assets $ 1,854,915 $ 274,930,681 $ 276,785,596 $ (67,152,474)

Net Assets at Beginning of Year $ 2,597,663 $ 3,529,198,434 $ 3,531,796,097 $ 3,598,948,571 NET ASSETS AT END OF YEAR $ 4,452,578 $ 3,804,129,115 $ 3,808,581,693 $ 3,531,796,097

See accompanying notes to financial statements.

The Duke Endowment | 2019 financials 6 Statements of Cash Flows

Year ended December 31, 2019 (with comparative amounts for the year ended December 31, 2018)

Cash Flows From Operating Activities 2019 2018 Change in net assets $ 276,785,596 $ (67,152,474) Adjustments to reconcile change in net assets to net cash used in operating activities: Depreciation expenses 1,577,662 1,553,749 Net realized gains on investment transactions (191,701,262) (209,608,293) (Increase) decrease in net unrealized appreciation on assets (228,748,486) 145,453,661 Changes in assets and liabilities: (Increase) decrease in securities transactions receivable (34,905,248) (429,703) (Increase) decrease in other assets (133,189) 2,119,210 Increase (decrease) in grants payable 1,292,635 (6,183,794) Increase in securities transactions payable 2,016,620 1,155,795 Increase (decrease) increase in other liabilities 4,608,212 (645,010)

Net Cash Used In Operating Activities $ (169,207,460) $ (133,736,859)

Cash Flows From Investing Activities

Proceeds from sales and maturities of investments $ 1,936,520,669 $ 2,058,758,116 Disbursements for purchase of investments (1,771,734,214) (1,914,503,084) Proceeds from sale of land, building, furniture and equipment — 400 Disbursements for purchase of land, building, furniture and equipment (206,162) (99,231)

Net Cash Provided By Investing Activities $ 164,580,293 $ 144,156,201

Cash Flows From Financing Activities

Principal payments on notes payable $ (1,225,896) $ (1,180,028) Net Cash Used In Financing Activities $ (1,225,896) $ (1,180,028)

Net (Decrease) Increase In Cash And Cash Equivalents $ (5,853,063) $ 9,239,314 Cash And Cash Equivalents At Beginning Of Year 18,580,910 9,341,596 Cash And Cash Equivalents At End Of Year $ 12,727,847 $ 18,580,910

Supplemental Cash Flow Information

Cash paid during the year for taxes $ 2,755,991 $ 4,417,689 Cash paid during the year for interest $ 1,279,988 $ 1,325,856

See accompanying notes to financial statements.

The Duke Endowment | 2019 financials 7 Notes to Financial Statements

December 31, 2019 (With Comparative Amounts as of December 31, 2018 and Summarized Financial Information for the Year Ended December 31, 2018)

(1) Summary Of Significant Accounting Policies

(a) Organization The Duke Endowment (“the Endowment”) was established by James B. Duke by Indenture and Deed of Trust of Personalty, dated December 11, 1924, for specific charitable, educational and religious purposes. The Endowment is to have perpetual existence. Subsequently, additional amounts were contributed to the Endowment under Items VIII, X, and XI of the Will of James B. Duke and by gifts from members of Mr. Duke’s family. Additional amounts were also received from The Doris Duke Trust. The Endowment has been classified as a private foundation and, accordingly, is subject to federal excise taxes imposed on net investment income, including realized capital gains. The Endowment is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code.

(b) DUMAC On July 1, 2007, the Trustees of the Endowment entered into a formal agreement with Duke Management Company (“DUMAC”), an organization providing investment management services for the Duke University endowment assets, whereby Duke Management Company would perform investment management services on behalf of the Endowment.

Pursuant to the terms of the arrangement, DUMAC is compensated by the Endowment for its investment management services at a rate proportionate to the Endowment’s share of the total investment assets managed by DUMAC in comparison to the total operating expenses of DUMAC, paid annually. For the years ending 2019 and 2018, the Endowment incurred investment management fees to DUMAC in the amount of $4,186,803 and $4,106,054, respectively. Such fees are netted against dividends and interest income within the accompanying statement of activities.

(c) Method of Accounting The Endowment presents its financial statements on an accrual basis in accordance with accounting principles generally accepted in the United States of America (US GAAP). Certain items are maintained on a cash basis, which is not materially different from the accrual basis of accounting.

During the years ended December 31, 2019 and 2018, the Endowment had leased certain office facilities and equipment. Such leases were operating leases and costs were expensed as incurred.

(d) Basis of Presentation The Endowment is required by the Indenture to use the interest and dividends (Endowment Income) earned on investments for purposes defined in the Indenture, subject to the defined authority of the trustees to withhold Endowment Income. More specifically, the Endowment is required by the Indenture to distribute to Duke University a certain amount of Endowment Income from the Original Corpus, Corpus Item VIII and Corpus Item XI, subject to a limited right to withhold by the trustees of the Endowment. The Indenture provides for additional trustee discretion with respect to the disbursement of Endowment Income to Endowment beneficiaries other than Duke University and also to Duke University out of accounts other than the three Corpus accounts listed above. In accordance with terms of the Indenture, which established the Endowment, realized gains and losses arising from investment transactions are considered part of Corpus. For purposes of presentation within the financial statements, all Corpus accounts are classified as net assets with donor restrictions.

The Endowment has elected to implement the requirements of the Uniform Prudent Management of Institutional Funds Act (“UPMIFA”). As a result of this implementation, the trustees determined that they would classify as donor restricted net assets maintained in perpetuity (a) the original value of Original Corpus, Corpus VII and Corpus XI, plus (b) the original value of subsequent gifts to Corpus, less (c) distributions specified by the donor.

The net assets of the Endowment and changes therein are classified and reported as follows: • Net Assets without Donor Restrictions — These amounts are free from donor restrictions and are available for appropriation to the beneficiaries of the Endowment or for similar charitable purposes in accordance with terms of the Indenture.

• Net Assets with Donor Restrictions — These funds are subject to donor restrictions that will be met by the actions of the trustees for appropriation to the beneficiaries of the Endowment or for similar charitable purposes in accordance with terms of the Indenture or under circumstances described in Note 3. Using UPMIFA guidelines, the trustees have determined that $259,681,078 be classified as net assets with donor restrictions maintained in perpetuity as of December 31, 2019 and 2018. For the same periods, the remaining balance of $3,544,448,037 and $3,269,517,356, respectively, represent the appreciation in the original values listed above.

The Duke Endowment | 2019 financials 8 Dividends and interest are reported as increases in net assets without donor restrictions. Realized and unrealized gains and losses are reported as increases or decreases in net assets with donor restrictions. Expenses and appropriations are recorded as decreases in net assets without donor restrictions.

The financial statements include certain prior-year summarized comparative financial information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with US GAAP. Accordingly, such information should be read in conjunction with the Endowment’s financial statements for the year ended December 31, 2018, from which the summarized information was derived.

(e) Cash and Cash Equivalents Cash and cash equivalents consist of demand deposits and certain short-term interest-bearing investments held with banks for beneficiary and expense purposes. The Endowment maintains cash on deposit and the balance, at times, may be in excess of federally insured limits.

(f) Securities Transactions Receivable Securities transactions receivable represents investment transactions that have been sold, but not settled. The Endowment recognizes investment transactions on a trade-date basis. Amounts are recognized in the statements of financial position at fair market value.

(g) Investments The Endowment accounts for investments under Accounting Standards Codification (ASC) 958, Not-for-Profit Entities, through which the Endowment has elected to record investments at estimated fair market value with gains and losses included in the statements of activities. Realized gains and losses are recognized when securities are sold based on the first-in, first-out method.

(h) Land, Building, Furniture and Equipment Land, building, furniture and equipment owned by the Endowment are stated at cost at date of acquisition. Useful lives range from 39 years for buildings, 7 years for furniture and 5 years for technological equipment. Depreciation is calculated on the straight-line basis over the assets’ estimated useful lives, except for land. The Endowment reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment charge is recognized when the fair value of the asset or group of assets is less than the carrying value. There was no impairment recognized for the years ended December 31, 2019 and 2018.

(i) Grants Payable The Endowment records grants payable once the Board of Trustees approves the grant. Once approved, each grantee organization must sign a grant agreement which stipulates guidelines and related requirements. The grantee must meet the terms of the signed grant agreement before funds are distributed.

(j) Securities Transactions Payable Securities transactions payable represents investment transactions that have been purchased, but not settled. The Endowment recognizes investment transactions on a trade-date basis. Amounts are recognized in the statements of financial position at fair market value.

(k) Provision for Taxes The Endowment is exempt from federal income taxes on related income under Section 501(c)(3) of the Internal Revenue Code and is classified as a private foundation. Accordingly, the Endowment is subject to federal excise taxes imposed on net investment income, including realized gains. The annual federal excise tax, normally 2%, can be reduced to 1% of net investment income provided certain requirements are met. In 2018, the Endowment was subject to the 1% excise tax rate. In 2019, management estimates that the Endowment will pay the 1% excise tax rate. As of December 20, 2019, the federal tax rate changed to a fixed 1.39% of net investment income and therefore, the net deferred excise tax liability was adjusted accordingly as of December 31, 2019.

In addition, the Endowment may be required to pay unrelated business income tax incurred through certain private equity investments. This tax is not material to the financial statements.

The Endowment records deferred excise taxes using the asset and liability method. Under this method, deferred excise taxes are determined based on temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates expected to be in effect when such amounts are realized or settled.

The Duke Endowment | 2019 financials 9 (l) Risks and Uncertainties A significant portion of the Endowment’s assets are held in a variety of investment forms. Investment securities, and other investments, including alternative investments in general, are exposed to various risks, such as interest rate risk, credit risk, liquidity risk, foreign currency risk and overall market volatility. Additionally, certain of the Endowment’s alternative investments contain redemption rights which may be restricted or eliminated by the underlying funds based on the provisions of the fund agreements. Alternative investment transactions are conducted primarily through secondary markets, and accordingly the risk exists that the secondary markets could experience fluctuations in liquidity and/or volume, which could impact the estimated fair value of these alternative investments.

Due to the level of risk associated with certain investment securities, it is possible that changes in values of investment securities will occur and that such changes could materially affect the amounts reported in the financial statements.

(m) Use of Estimates Management of the Endowment has made certain estimates and assumptions relating to the reporting of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in preparing these financial statements in conformity with US GAAP. Actual results could differ from these estimates.

Significant items in the Endowment’s financial statements subject to such estimates and assumptions include valuations for certain investments without readily determinable fair values, and actuarially determined benefit liabilities related to the Endowment’s pension and other postretirement benefit plans.

(2) Fair Value of Financial Instruments The estimated fair values of financial instruments have been determined by the Endowment as follows:

Cash and cash equivalents, securities transactions receivable, and liabilities are carried at cost which approximates fair value because of the short maturity of these instruments.

Investments are carried at estimated fair value, which is generally based on year-end published quotations, except as discussed below.

Certain Endowment assets that are held in various alternative investments, including limited partnerships that invest in the securities of companies, hedge funds and other investments, may not be immediately liquid and do not have a readily determinable fair value, that is, instruments not listed on national exchanges or over-the-counter markets. The partnerships’ general partners, who must follow the valuation guidelines stipulated in their respective limited partnership agreements, determine the fair value of such partnership investments. Given the inherent risks associated with this type of investment, there can be no guarantee that there will not be widely varying gains or losses on these limited partnership investments in future periods. For its alternative investments, the Endowment is eligible and has utilized the practical expedient method to measure fair value under generally accepted accounting principles. In accordance with the practical expedient method, the net asset value (NAV) reported by the underlying alternative investment is concluded to represent the fair value.

(3) Release from Restriction In December 2009, the Indenture was modified by court order to allow the trustees to expend net assets with donor restrictions to the extent necessary in the judgment of the trustees for the Endowment to make available to beneficiaries of the Endowment funds reasonably needed for purposes described in the Indenture, consistent with the fiduciary duty of the trustees to preserve the Endowment in perpetuity. The modifications were not in effect until after the trustees’ final meeting of the year and did not affect the financial statements of the Endowment for years ended prior to January 5, 2010.

Under certain circumstances described above, the trustees may be required to transfer net assets with donor restrictions to net assets without donor restrictions to the extent necessary to comply with the provisions set forth in Section 4942 of the Internal Revenue Code. As reported on the statement of activities, the trustees determined that in 2019 and 2018 transfers of funds with donor restrictions in the amounts of $145,519,067 and $136,529,004, respectively, were required. Although the Endowment does not intend to transfer funds in excess of amounts approved for general expenditures as part of its annual budget process for operating expenditures and appropriations, trustees could release additional funds from net assets with donor restrictions if necessary.

The Duke Endowment | 2019 financials 10 (4) Liquidity The Endowment manages its financial assets to be available as its operating expenditures, liabilities and other obligations come due. In addition, the Endowment invests cash in excess of daily requirements in short-term investments or fixed income securities. Although the Endowment does not intend to spend from its donor restricted net assets, other than amounts appropriated for general expenditures as part of its annual budget approval and appropriation process, amounts from net assets with donor restrictions could be made available if necessary. However, donor restricted net assets contain investments with lock-up provisions that reduce the total investments that could be made available. Other than those amounts restricted in perpetuity, all other donor restricted net assets can be spent pursuant to the above limitations. To supplement working capital and investment commitments the Endowment has a line of credit agreement totaling $30,000,000 as of December 31, 2019 with Morgan Stanley Bank, N.A. The total borrowing rate charged by Morgan Stanley Bank, N.A. is comprised of the variable LIBOR Market Index Rate determined by market conditions at the time of borrowing plus .75%. At December 31, 2019, there were no outstanding borrowings under these agreements. The line of credit agreement expires November 2022.

2019 2018 Total assets: $ 3,902,802,953 $ 3,612,795,810 Less: Assets restricted in perpetuity (259,681,078) (259,681,078) Illiquid private investments and real assets (1,548,585,313) (1,472,311,091) Land, building, furniture and equipment, net (38,320,037) (39,691,537)

Other assets (1,219,965) (1,086,776) Financial assets available within one year $ 2,054,996,560 $ 1,840,025,328

(5) Provision for Taxes and Deferred Excise Tax Liability During 2019 and 2018, the Endowment recorded a provision for current year estimated excise taxes in the amounts of $2,755,991 and $4,417,689, respectively. This was allocated to the net change in net assets without donor restrictions. The Endowment’s net deferred excise tax liability was $15,123,093 and $8,593,117 at December 31, 2019 and 2018, respectively, which primarily relates to unrealized gains on investments. The increase in deferred excise tax liability was $6,529,976 and was allocated to unrealized appreciation in net assets with donor restrictions for 2019.

The Duke Endowment | 2019 financials 11 (6) Investments Investments are composed of the following:

2019 COST MARKET

Short-term investments $ 342,541,075 $ 342,541,075 Fixed income 172,494,259 170,532,586 Equities 454,845,566 630,307,667 Hedged strategies 581,768,361 828,156,629 Private investments 674,971,882 1,269,000,394 Real assets 438,518,778 539,265,997 Other 52,360,912 32,256,203 $ 2,717,500,833 $ 3,812,060,551

2018 COST MARKET Short-term investments $ 342,581,105 $ 342,581,105 Fixed income 111,323,868 99,580,793 Equities 461,386,325 532,013,728 Hedged strategies 599,554,546 791,378,452 Private investments 646,895,259 1,182,933,488 Real assets 479,181,967 549,058,681 Other 49,674,999 52,321,035 $ 2,690,598,069 $ 3,549,867,282

At December 31, 2019, the Endowment received collaterals totaling ($10,439,928) for financial instruments. As of December 31, 2018, $9,578,784 were posted as collaterals for financial instruments and thus not readily available for use. Collaterals held are included in hedged strategies and short-term investments.

The Endowment’s investment classes are described in further detail below. Classes include direct holdings, which are generally marketable securities, and interests in funds for which the related investment strategies are described.

Short-term investments include cash collateral, money market funds, short-term U.S. Treasury, agency, corporate and other highly liquid debt securities with an aggregate duration of less than a year.

Fixed income includes non-government U.S. and non-U.S. debt securities, funds holding similar securities and debt-based derivatives.

Equities include U.S. and non-U.S. stocks, equity-based derivatives and interests in funds that invest predominantly long but also short stocks.

Hedged strategies primarily include interests in funds that invest both long and short in U.S. and non-U.S. stocks, credit-oriented securities and arbitrage strategies. Virtually all of the Endowment’s investments in these funds are redeemable, and the underlying assets of the funds are predominately marketable securities and derivatives.

Private investments primarily include interests in funds or partnerships that hold illiquid investments in venture capital, buyouts and credit. These funds typically have periods of 10 or more years during which committed capital may be drawn. Distributions are received through liquidation of the underlying assets of the funds, which are anticipated to occur over the next 4 to 10 years. Certain private placement securities may also be held.

Real assets include interests in funds or partnerships that hold illiquid investments in residential and commercial real estate, oil and gas production, energy, other commodities and related services businesses. These funds typically have periods of 10 or more years during which committed capital may be drawn. Distributions are received through liquidations of the underlying assets of the funds, which are anticipated to occur over the next 5 to 12 years. Additionally, certain liquid commodity- and real estate-related equities, private placement securities and related derivatives are included.

Other includes primarily other derivative instruments.

The Duke Endowment | 2019 financials 12 As of December 31, 2019, and 2018, redemption frequency and the corresponding notice period for all investments are shown within the table below. The values of the unfunded commitments included within the following table are as of December 31, 2019.

REDEMPTION UNFUNDED FREQUENCY (IN DAYS) REDEMPTION NOTICE ASSET CLASS COMMITMENTS (IF CURRENTLY ELIGIBLE) 1 PERIOD (IN DAYS) Short-term investments — daily 1 Fixed income — 1 to 30 1 to 30 Equities — 1 to >365 1 to 90 Hedged strategies 1,200,000 1 to >365 30 to 180 Private investments 257,139,530 N/A N/A Real assets 182,900,490 N/A N/A Other — N/A N/A

The Endowment measures fair value at the price expected to be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance prioritizes the assumptions that market participants would use in pricing the asset or liability (the “inputs”) into a three-tier fair value hierarchy. This fair value hierarchy gives the highest priority (Level 1) to quoted prices in active markets for identical assets or liabilities and the lowest priority (Level 3) to unobservable inputs in which little or no market data exists, requiring enterprises to develop their own assumptions. Observable inputs that do not meet the criteria of Level 1 and include quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets and liabilities in markets that are not active, are categorized as Level 2. Level 3 inputs are those that reflect management’s estimates about the assumptions market participants would use in pricing the asset or liability, based on the best information available in the circumstances. Alternative investments are typically valued using Level 3 inputs, and such inputs include information provided by the managers of the underlying funds.

At December 31, 2019, $145,910,864 or 3.8% of the Endowment’s total investments, are valued using Level 3 inputs. At December 31, 2018, $121,982,968, or 3.4% of the Endowment’s total investments, are valued using Level 3 inputs. These items consisted of alternative investments in private equity funds as well as other alternative investments. The schedule below presents the Endowment’s financial assets and financial liabilities that are recorded at fair value on a recurring basis, categorized by the level of inputs utilized in determining the fair value of each.2 As of December 31, 2019 and 2018, the Endowment had no material financial assets or financial liabilities that were measured at fair value on a non-recurring basis.

1 Based on current terms, it is possible that these redemption rights may be restricted or eliminated by the funds in the future in accordance with the underlying fund agreement. 2 Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.

The Duke Endowment | 2019 financials 13 Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Investments Identical Items Inputs Inputs Reported As of December 31, 2019: Fair Value (Level 1) (Level 2) (Level 3) at NAV Equities $ 630,307,667 $ 458,426,291 $ 33,034,608 $ — $ 138,846,768 Fixed income 170,532,586 12,688,717 106,791,892 12,251,055 38,800,922 Private investments 1,269,000,394 1,269,653 — 114,694,068 1,153,036,673 Real assets 539,265,997 20,002,092 5,029,813 12,924,906 501,309,186 Hedged strategies 828,156,629 14,295,610 11,888,297 — 801,972,722 Short-term investments 342,541,075 — 342,541,075 — — Other 32,256,203 1,050,564 25,164,804 6,040,835 — Total Assets Measured $ 3,812,060,551 $ 507,732,927 $ 524,450,489 $ 145,910,864 $ 2,633,966,271 on a Recurring Basis

Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Investments Identical Items Inputs Inputs Reported As of December 31, 2018: Fair Value (Level 1) (Level 2) (Level 3) at NAV Equities $ 532,013,728 $ 357,565,810 $ 27,089,697 $ — $ 147,358,221 Fixed income 99,580,793 12,241,028 64,644,921 5,831,500 16,863,344 Private investments 1,182,933,488 673,483 — 102,199,914 1,080,060,091 Real assets 549,058,681 9,937,066 (2,025,675) 7,910,719 533,236,571 Hedged strategies 791,378,452 600,645 10,481,591 — 780,296,216

Short-term investments 342,581,105 — 342,581,105 — —

Other 52,321,035 (522,156) 46,802,356 6,040,835 — Total Assets Measured $ 3,549,867,282 $ 380,495,876 $ 489,573,995 $ 121,982,968 $ 2,557,814,443 on a Recurring Basis

The Endowment has included a summary of the investment valuation methodologies in Note 2.

The following summarizes the relationship between cost and market value of investments:

2019 2018 Gross unrealized gain, net of deferred excise tax $ 1,354,996,927 $ 1,096,634,151 Gross unrealized loss (275,532,592) (245,918,302) Excess of Market Over Cost $ 1,079,464,335 $ 850,715,849 Increase (decrease) in net unrealized appreciation on assets 228,748,486 (145,453,661) Net realized gains from sale of investments 191,701,262 209,608,293 Total Net Gain $ 420,449,748 $ 64,154,632 Net Investment income 42,863,578 39,072,030 Total Return $ 463,313,326 $ 103,226,662

The gross unrealized gains and losses include $27,694 and $39,738 relating to short-term investments at December 31, 2019 and 2018, respectively, which are recorded in cash and cash equivalents on the statements of financial position.

As discussed in Note 5, net deferred excise taxes of $15,123,093 and $8,593,117 were also allocated to gross unrealized gain in 2019 and 2018, respectively.

At December 31, 2019 and 2018, Duke Energy Corporation common stock represented a concentration of approximately 2% of the Endowment’s investments.

From time to time the Endowment will participate in a securities lending program. The Endowment loans certain investment securities for short periods of time in exchange for collateral, consisting mainly of cash and U.S. Government securities, equal to at least 102% of the fair value of the investment securities on loan. As of December 31, 2019, and 2018, there were no investment securities on loan.

The Duke Endowment | 2019 financials 14 As part of its investment strategy, the Endowment invests in certain derivative instruments, typically intended to economically hedge certain investment positions from fluctuations in market, rate, currency or other identified risks. During fiscal 2019 and 2018, the Endowment, or external investment managers on the Endowment's behalf, entered into swap agreements, futures contracts or forward contracts, and acquired warrants or rights to increase, reduce or otherwise modify investment exposures.

The Endowment’s investment related derivative exposures, categorized by primary underlying risk, are as follows:

Primary underlying risk as Long Short Derivative Derivative Gain/ of December 31, 2019: Notional Notional Assets Liabilities Loss Equity Price3 $ 561,327,924 $ 226,798,784 $ 30,607,286 $ (17,909,582) $ 31,356,446 Interest Rate4 885,075,350 131,115,084 3,529,512 (662,264) 1,446,877 Commodity Price5 158,600,962 56,110,880 5,833,163 (9,906,177) (1,813,323) Credit6 1,167,457,597 883,562,219 86,678,139 (52,652,689) 2,533,837 Foreign Currency Exchange Rate7 97,641,658 362,679,737 3,089,632 (3,515,306) 1,179,695 TOTAL $ 2,870,103,491 $ 1,660,266,704 $ 129,737,732 $ (84,646,018) $ 34,703,532

Primary underlying risk as Long Short Derivative Derivative Gain/ of December 31, 2018: Notional Notional Assets Liabilities Loss Equity Price3 $ 506,268,620 $ 271,961,458 $ 22,843,967 $ (43,320,569) $ (57,217,882) Interest Rate4 831,172,460 312,721,852 2,005,791 (783,973) 14,316 Commodity Price5 79,842,640 38,181,639 2,180,135 (2,060,225) (7,202,683) Credit6 971,635,220 383,318,699 52,780,020 (12,279,964) (2,916,931) Foreign Currency Exchange Rate7 83,774,315 461,880,857 6,679,683 (3,246,340) 19,723,492 TOTAL $ 2,472,693,255 $ 1,468,064,505 $ 86,489,596 $ (61,691,071) $ (47,599,688)

As part of relative value strategies, the Endowment and investment managers on the Endowment's behalf entered into credit default swap derivative transactions on investment grade and high yield securities which typically have terms of five years or less to buy and sell credit protection. At December 31, 2019 and 2018 the notional of protection sold was $976,925,516 and $800,765,125 and the notional of protection bought with identical underlying assets was $204,475,948 and $229,447,633, respectively. These instruments are included in the Credit line of the preceding table.

3 Includes options, swaps, and futures contracts. 4 Includes options, swaps, swaptions, and futures contracts. 5 Includes options and futures contracts. 6 Includes credit default swaps, swaptions, and credit total return swaps. 7 Includes options, futures, and forward contracts.

The Duke Endowment | 2019 financials 15 The Endowment’s investment related derivative assets and liabilities at December 31, by counterparty, are as follows:

CASH COLLATERAL December 31, 2019: ASSETS LIABILITIES PLEDGED (HELD) NET AMOUNT Counterparty A $ 14,104,500 $ (4,548,135) $ (8,010,000) $ 1,546,365 Counterparty B 15,288,253 (4,023,135) (10,799,936) 465,182 Counterparty C 48,613,143 (38,895,223) 6,266,000 15,983,920 Counterparty D 30,251,796 (12,238,805) (8,409,495) 9,603,496 Counterparty E 14,321,270 (7,286,000) (6,150,573) 884,697 Counterparty F 1,783,619 (3,132,993) — (1,349,374) Counterparty G 841,113 (678,575) 3,067,508 3,230,046 Counterparty H 3,566,280 (11,316,571) 7,630,000 (120,291) Counterparty I 628,537 (1,697,556) 5,576,568 4,507,549 Counterparty J — (438,391) 390,000 (48,391) Counterparty K 86,062 (154,491) — (68,429) All Other Counterparties 253,159 (236,143) — 17,016 TOTAL $ 129,737,732 $ (84,646,018) $ (10,439,928) $ 34,651,786

CASH COLLATERAL December 31, 2018: ASSETS LIABILITIES PLEDGED (HELD) NET AMOUNT Counterparty A $ 10,323,974 $ (26,713,066) $ 17,640,000 $ 1,250,908 Counterparty B 12,403,227 (8,965,900) (3,536,794) (99,467) Counterparty C 18,544,309 (8,223,022) 16,240,000 26,561,287 Counterparty D 26,330,577 (7,259,042) (18,102,522) 969,013 Counterparty E 6,061,733 (2,577,365) (3,274,800) 209,568 Counterparty F 3,827,385 (679,037) (4,150,000) (1,001,652) Counterparty G 1,222,341 (621,695) 2,562,284 3,162,930 Counterparty H 5,502,177 (2,610,274) (3,200,000) (308,097) Counterparty I 1,621,192 (1,283,184) 3,000,616 3,338,624 Counterparty J 277,673 (1,093,138) 710,000 (105,465) Counterparty K 53,493 (1,572,722) 1,690,000 170,771 All Other Counterparties 321,515 (92,626) — 228,889 TOTAL $ 86,489,596 $ (61,691,071) $ 9,578,784 $ 34,377,309

(7) Land, Building, Furniture and Equipment Land, buildings and equipment, net, are summarized as follows at December 31:

2019 2018 Land $ 4,303,101 4,303,101 Building 37,973,476 37,913,458 Furniture 2,269,118 2,269,118 Technological equipment 1,497,921 1,351,778 GROSS LAND, BUILDING, FURNITURE AND EQUIPMENT $ 46,043,616 $ 45,837,455 Accumulated depreciation (7,723,579) (6,145,918) NET LAND, BUILDING, FURNITURE AND EQUIPMENT $ 38,320,037 $ 39,691,537

During 2018, the Endowment disposed of certain technological equipment, which had accumulated depreciation of $3,760. There were no disposals in 2019.

The Duke Endowment | 2019 financials 16 (8) Notes Payable On October 31, 2012, the Endowment (the “Issuer”) entered into a $40,000,000 note purchase agreement with Massachusetts Mutual Life Insurance Company, MassMutual Asia Limited, and C.M. Life Insurance Company (collectively the “Purchasers”), whereby the Endowment authorized the issue and sale of $40,000,000 aggregate principal amount of its 3.85% senior notes due October 31, 2037. The Endowment applied the proceeds of the sale of the notes to the construction of its headquarters located at 800 East Morehead Street, Charlotte, North Carolina and for other general organizational purposes.

The Endowment is required to make payments of principal, in the amounts specified in the note purchase agreement, on the unpaid balance thereof at the rate of 3.85% per annum, payable semiannually on the last day of April and October in each year commencing 2013. As of December 31, 2019, and December 31, 2018, the principal balance of the notes payable was $32,324,092 and $33,549,988, respectively, which approximates fair value.

Future maturities of the principal note payments are as follows:

AMOUNT 2020 $ 1,273,547 2021 1,323,051 2022 1,374,479 2023 1,427,905 2024 1,483,409 Thereafter 25,441,701 $ 32,324,092

The note purchase agreement contains financial covenants customary for such transactions, including limits on minimum total net assets, maximum total indebtedness to total net assets and priority indebtedness. The Endowment was in compliance with its covenants as of December 31, 2019.

(9) Contribution Received On August 28, 2018, the Endowment entered into an agreement with Blue Meridian Partners, Inc. (BMPI), a 501(c)(3) public charity. Pursuant to the terms of the agreement, BMPI will invest up to $32.5 million for a period of up to 39 months in the Endowment’s regional strategy—Get Ready Guilford Initiative. Because the Endowment is a Regional General Partner of BMPI, the Endowment’s funding requirement is one half or $16.25 million of the total amount. The remaining funding requirement of $16.25 million will be funded by other partners of BMPI. In October 2018, the Endowment received its first contribution from BMPI totaling $6.45 million. These funds along with the Endowment’s $6.45 million totals $12.9 million and will be used on the Get Ready Guilford Initiative, a strategy to break the cycle of intergenerational poverty in Guilford County, North Carolina. The Endowment anticipates receiving the remaining contribution of $9.8 million in 2020 from BMPI. These funds along with the Endowment’s $9.8 million totals $19.6 million, the remaining balance in the $32.5 million investment.

(10) Net Assets with Donor Restrictions Donor restricted net assets with a purpose restriction consist of the following at December 31:

2019 2018 Duke University under Original Corpus, Corpus $ 794,638,292 $ 682,964,118 Item VIII and Corpus Item XI

Other charitable purposes 2,749,809,745 2,586,553,238 DONOR RESTRICTED NET ASSETS — PURPOSE RESTRICTION $ 3,544,448,037 $ 3,269,517,356

Donor restricted net assets that are restricted in perpetuity consist of the following at December 31:

2019 2018 Duke University under Original Corpus, Corpus $ 54,244,354 $ 54,244,354 Item VIII and Corpus Item XI Other charitable purposes 205,436,724 205,436,724 DONOR RESTRICTED NET ASSETS — RESTRICTED IN PERPETUITY $ 259,681,078 $ 259,681,078

The Duke Endowment | 2019 financials 17 (11) Functional Expenses The cost of program activities and administrative services have been summarized on a functional basis on the statement of activities. The statement of functional expense presents expenses by function and natural classification. Expenses directly attributable to a specific functional area are reported within that functional area. Indirect expenses that benefit multiple functional areas have been allocated by the Endowment based upon square footage and headcount.

Expenses are reported on the statement of activities in natural categories. Functional expenses were categorized as follows:

2019

Type Administrative Services Program Activities Total Compensation $ 2,816,396 $ 3,198,555 $ 6,014,951 Employee benefits and payroll taxes 4,469,688 1,570,473 6,040,161 Professional fees 1,563,920 2,829,614 4,393,534 Office operation 865,050 398,656 1,263,706 Staff travel, conferences and meetings 102,157 222,279 324,436 Communications 555,697 — 555,697 Other expenses 452,332 446,510 898,842 Interest expense 1,290,026 — 1,290,026 Depreciation 1,577,662 — 1,577,662 $ 13,692,928 $ 8,666,087 $ 22,359,015

2018

Type Administrative Services Program Activities Total Compensation $ 3,098,952 $ 2,889,318 $ 5,988,270 Employee benefits and payroll taxes 2,123,676 1,656,432 3,780,108 Professional fees 1,526,372 2,174,910 3,701,282 Office operation 749,265 434,149 1,183,414 Staff travel, conferences and meetings 120,944 188,644 309,588 Communications 602,867 — 602,867 Other expenses 486,292 551,081 1,037,373 Interest expense 1,326,468 — 1,326,468 Depreciation 1,553,749 — 1,553,749 $ 11,588,585 $ 7,894,534 $ 19,483,119

For 2019 and 2018, investment expenses of $12,135,746 and $10,024,398, respectively are netted against dividends and interest income within the accompanying Statement of Activities.

(12) Pension and Other Postretirement Plans The Endowment sponsors a noncontributory defined benefit pension plan covering all eligible employees, as defined under the plan. The benefits are based on years of service and the employee’s average final creditable compensation. Contributions totaling $1,300,000 and $1,834,865 were made to the plan during 2019 and 2018, respectively. The benefit obligation as of December 31, 2019 and 2018 was $29,095,857 and $22,938,504, respectively, and the net pension liability, included in the other liabilities in the statements of financial position, was $12,976,310 and $9,649,815, respectively, based on actuarial assumptions at December 31, 2019 and 2018.

The Endowment also sponsors a defined contribution plan with the Endowment providing matching contributions equal to 100% of employee contributions up to 3% and 50% of employee contributions between 3% and 5%. All full-time employees are eligible after a three-month waiting period. Total Endowment contributions in 2019 and 2018 were $240,049 and $237,158, respectively.

The Endowment provides certain health care and life insurance benefits to retired employees. The accumulated postretirement benefit obligation at the latest measurement date of December 31, 2019 was $3,900,000. It was included in Other Liabilities on the Statement of Financial Position. At December 31, 2019, the Endowment determined that any additional liability for unfunded retirement benefits extended to retirees and to employees upon their retirement since the latest measurement date would not be material to its net assets.

The Duke Endowment | 2019 financials 18 (13) Subsequent Events In first quarter 2020, the global outbreak of a novel coronavirus (COVID-19) was declared a pandemic, which continues to spread throughout the United States. The spread of COVID-19 has caused significant volatility in U.S. and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies and, as such, the Endowment is unable to determine if it will have a material impact to its operations.

The Endowment has evaluated its December 31, 2019 financial statements for subsequent events through June 5, 2020, the date the financial statements were available to be issued. The Endowment is not aware of any other subsequent events which would require recognition or disclosure in the financial statements.

The Duke Endowment | 2019 financials 19 800 East Morehead Street Charlotte, North Carolina 28202

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