A LIVING HISTORY
2014 ANNUAL REPORT A LETTER FROM OUR PRESIDENT AND CHAIR
We opened the doors to The Duke Endowment’s new headquarters on East Morehead Street on August 25, 2014. We had relocated from just a mile away, but the process of moving was still an adventure.
As staff members packed and unpacked crates and boxes, we were keenly aware that this new chapter in the legacy of our founder, James B. Duke, was the result not only of months of planning, but of the decades of hard work that came before us.
EUGENE W. COCHRANE JR., PRESIDENT MINOR M. SHAW, CHAIR The Duke Endowment today is built on the strong foundation of our past.
From the time Mr. Duke established his Trust in 1924, the Endowment has been on a journey with grantees in the Carolinas to create a place where children are nurtured, health is promoted, minds are educated, and spirits are enriched. The Duke Endowment in Charlotte, We have had a long history of collaborating North Carolina, is a private foundation with organizations in North Carolina and South established in 1924 by industrialist and Carolina that are making a lasting impact on the philanthropist, James B. Duke. We seek communities and people they serve. to fulfill his dream for the Carolinas by enriching lives and communities through Thanks to all of our grantees across the two children’s services, health care, higher states, much has been accomplished in these 90 years. As we look back, we are grateful for the education and rural churches. Mr. Duke’s partnerships that will move us forward. legacy endures today in every life touched, every institution advanced and every We celebrate that living history in our 2014 Annual innovation discovered. Report. By featuring some of our original grantees and showing how our work continues today, we wanted to honor the past and focus on the opportunities ahead.
As one of the older foundations in the United States, The Duke Endowment is steeped in history and traditions. But we must be willing to adapt and change to serve the Carolinas and address today’s complex issues effectively.
Our new headquarters is a part of that change.
Mr. Duke wanted his philanthropy to continue in perpetuity, and our Trustees view this building as an investment for the Endowment’s future. This will be our home for years to come — a place for continuing our long commitment to North Carolina and South Carolina.
Photo courtesy of Duke University Archives After 24 years of faithful service, Dr. William G. Anlyan retired from our Board of Trustees. The Board elected John F.A.V. “Jack” Cecil, president of Biltmore Farms in Asheville, N.C., as his successor.
When our new Charlotte headquarters opened in August 2014, years of planning became a reality. The 46,000-square-foot building features meeting space on the first floor and two levels of office space for staff. It was an honor to invite neighbors, grantees and other partners to help us celebrate this important milestone in our founder’s legacy.
We said goodbye to two longtime staff members and wished them well in retirement. Marilyn MacKenzie (left) joined the Endowment in 1987. Toni Roof was with us since 1992.
James B. Duke saw wisdom in surrounding himself with hard-working, talented people. From starting his businesses to creating The Duke Endowment, he sought out people of character and commitment. LEADERSHIP
STAFF
Eugene W. Cochrane Jr. President
Ashleigh J. Allessio Trena McClure Stacy E. Warren Senior Administrative Senior Administrative Specialist, Program Officer, Health Care Specialist, Health Care Rural Church Robert R. Webb III William F. Bacon Susan L. McConnell Director, Rural Church Director, Evaluation Director, Higher Education/ Director, Human Resources Kimberly M. Webb Denton W. Baird Senior Administrative Specialist, Fellow, Information Arthur E. Morehead IV Child Care/Finance Technology Vice President/General Counsel Anita W. West Carolyn M. Duff Laura A. Peres Accounting Manager Director, Payroll and Benefits Paralegal Tamika D. Williams Ronda S. Dwyer Charity L. Perkins Program Officer, Child Care Senior Administrative Director, Communications Specialist, Health Care Lily H. Zhang Mary L. Piepenbring Controller Nancy L. Edwards Vice President TRUSTEES Administrative Specialist, Director, Health Care Diana Zilberdrut Health Care Project Specialist, Phillip H. Redmond Jr. Communications/Investments Philip W. Freeman Associate Director, Child Care Fellow Kristen R. Richardson-Frick Paula W. Greene Program Officer, Rural Church Office Services Coordinator Karen H. Rogers Janet B. Haas Chief Financial Officer/Treasurer Minor M. Dennis M. Mary D.T. William John F.A.V. Senior Administrative Shaw Campbell Jones Barnet III Cecil Specialist, Evaluation Meka S. Sales Chair Vice Chair Vice Chair Spartanburg, SC Asheville, NC Program Officer, Health Care Greenville, SC Durham, NC Abingdon, VA Melinda O. Hardin Accounting Specialist Matthew D. Sharp Director, Information Technology Linwood B. Hollowell III Associate Director, Health Care Natalie C. W. Smith Financial Analyst, Terri W. Honeycutt Finance/Higher Education Corporate Secretary Eric D. Stevens Jeri F. Krentz Administrative Specialist Associate Director, Communications Christina H. Strader Ravenel B. Harris E. Constance F. Thomas S. Charles C. Fellow Curry III DeLoach Jr. Gray Kenan III Lucas III New York, NY Hartsville, SC Winston Salem, NC Chapel Hill, NC Charlotte, NC Rhett N. Mabry Vice President K. Todd Walker Director, Child Care Managing Director, Investments
Tania G. Mapes Senior Administrative Specialist, Administration/Higher Education
Wilhelmina M. Russell M. Jean G. Spaulding Kenneth D. Judy Reuben-Cooke Robinson II Durham, NC Weeks Jr. Woodruff Alexandria, VA Charlotte, NC Charlotte, NC Washington, D.C. DISTRIBUTED GRANTMAKING CHILD CARE $10,556,272 $9,839,666 IN NEW GRANTS APPROVED
HEALTH DISTRIBUTED CARE $45,204,012 $31,288,463 IN NEW GRANTS APPROVED
HIGHER DISTRIBUTED EDUCATION $59,212,078 A $31,825,000 IN NEW GRANTS APPROVED
RURAL DISTRIBUTED GROWING CHURCH $13,679,746 INVESTMENT $15,126,590 IN NEW GRANTS APPROVED CROSS PROGRAM/ DISTRIBUTED SPECIAL OPPORTUNITY $11,350,081 1924–2014 $8,860,392 IN NEW GRANTS APPROVED In 2014, The Duke Endowment distributed $140 million through 375 grants, some of DISTRIBUTED which were approved in previous years. TOTAL GRANTMAKING The Endowment approved 198 new grants $140,002,189 totaling over $96.9 million, some of which $96,940,111 IN NEW GRANTS APPROVED will be paid in future years. Today, the Endowment’s Child Care program area looks at group care as an intervention, not a placement. Recent grants have helped quality providers offer an array of programs to help vulnerable children receive services based on their assessed needs. With Endowment funding, several organizations have joined forces to become full-service child welfare agencies.
2014
DISTRIBUTED 35 NEW GRANTS $10,556,272 $9,839,666
18 NEW GRANTS 17 NEW GRANTS OUT-OF-HOME CARE PREVENTION AND EARLY INTERVENTION $5,318,811 $4,520,855
As a child, James B. Duke suffered the loss of his mother, then lived with his grandparents while his father was sent off to war. His compassion for children without supportive families helped shape his vision for a better world and became an important part of his legacy. CHILD CARE
When Barium Springs Home for Children opened its doors as an orphanage in 1891, most residents would arrive as infants and stay through high school or college. Orphanages played a custodial role, providing food, shelter and schooling for “wards of society.” The Duke family long supported these homes for children, and James B. Duke, who grew up motherless, continued that assistance in his own philanthropy. When he listed beneficiaries in the Indenture of Trust that established The Duke Endowment, he included “properly operated” facilities “in an effort to help those who are most unable to help themselves.” In the early decades, the Endowment distributed its funding to facilities in North Carolina and South Carolina based on the CHILD CARE number of children served. After the end Helping vulnerable children lead successful lives by of World War II, the need for orphanages supporting early intervention, lessened. Instead of providing homes for collaborative approaches and evidence-based programs children who were parentless, they began that help serve children and their families offering therapy for children who suffered more effectively from abuse and neglect. Grants from the Endowment during that time went toward campus renovations and programs. In 2014, Barium Springs, based in Statesville, merged with another of the Endowment’s original grantees, Grandfather Home for Children, based in Banner Elk. Through that consolidation, two of North Carolina’s oldest campuses have become one of the state’s largest private child welfare providers — Children’s A Hope Alliance — serving some 3,500 children in 63 counties through adoption, foster care and comprehensive treatment for abuse and neglect. The merger will help the two organizations maximize resources to provide the highest quality care. A $350,000 grant from the Endowment offsets costs related to the effort. HOME “By helping ‘properly operated’ providers offer a continuum of effective services, more families will have access to the critical resources they need,” says Dr. Jean FOR CHILDREN Spaulding, the Trustee who chairs the Endowment’s Committee on Child Care, “and vulnerable youth will have a better chance to flourish and thrive.” In 2006, with increasing costs of health care and the growing number of uninsured, the Trustees elected to redesign the “Free Days of Care” program. The new model would help develop community-based partnerships to connect low-income, uninsured patients to medical homes and offer comprehensive, coordinated services through safety net providers.
2014 DISTRIBUTED $45,204,012
62 NEW GRANTS $31,288,463
26 NEW GRANTS ACCESS TO HEALTH CARE $11,496,672
5 NEW GRANTS PREVENTION $2,161,128 A healthy man for most of his life, James B. Duke was profoundly 31 NEW GRANTS affected by the illness of others. QUALITY AND SAFETY OF HEALTH CARE Having lost his half-brother and his beloved mother to typhoid fever before his second birthday, he sought $17,630,663 to educate physicians and support health care through his philanthropy. HEALTH CARE
“Modern” medicine had reached only segments of South Carolina when Spartanburg General Hospital first welcomed patients in the 1920s. The doctor-to-patient ratio stood at one to 1,409, and there was one hospital bed for every 652 people. In 20 of the state’s 46 counties, no hospitals existed. James B. Duke was committed to removing these barriers to care in North Carolina and South Carolina. He envisioned “adequate and convenient” hospitals in communities across the two states, noting that they had become “indispensable institutions.” To defray the cost of indigent patients, he included a clause to pay hospitals $1 “per free bed per day.” HEALTH CARE
One dollar may seem small today — but Enhancing the lives of individuals and the in Mr. Duke’s time, it was anywhere from vitality of communities by 25 percent to a full third of the cost of promoting prevention, improving the quality hospital care. At Spartanburg’s hospital, and safety of services and increasing 55 percent of patients were unable to pay access to care in 1925, and the Endowment contributed $6,400 for their care.
An initial grant of $2.3 million from The Duke Endowment to the North Carolina Hospital Association and South Carolina Hospital Association established statewide partnerships and technical assistance centers to help communities develop collaborative networks of care for the uninsured.
Spartanburg Regional Medical Center was home to the first network in South A Carolina. AccessHealth Spartanburg now serves 2,300 people, and leaders say it has decreased emergency department use, lowered hospitalizations and reduced hospital costs.
In 2014, more than $5.7 million in grants from the Endowment went toward the low-Income, uninsured program. Today, 62 counties have collaborative networks in BRIDGE the Carolinas. “In this ever-changing field, the Endowment’s Health Care program area has worked to maintain Mr. Duke’s vision for the Carolinas,” says Dr. K.D. Weeks, the TO HEALTH Trustee who chairs the Endowment’s Committee on Health Care. “By closing gaps and eliminating barriers, more people now have the chance to lead healthy lives.” Today, the field of higher education is increasingly complex. The Endowment’s unrestricted operating assistance — which totaled nearly $17 million in 2014 — still provides a predictable income for the schools, while other grants help them explore ways to enhance academic excellence and increase student access and attainment.
2014
DISTRIBUTED 13 NEW GRANTS $59,212,078 $31,825,000
11 NEW GRANTS 2 NEW GRANTS ACADEMIC EXCELLENCE EDUCATIONAL ACCESS AND SUCCESS $18,325,000 $13,500,000
James B. Duke’s formal education was limited, but he admired and respected the contributions of teachers, preachers, lawyers and physicians. He believed educating principled people in these fields would generate individual contributions that would, in turn, benefit society. HIGHER EDUCATION
James B. Duke had little formal schooling himself, but he selected four institutions of higher education in North Carolina and South Carolina as beneficiaries of his Trust. He believed education could help “develop our resources, increase our wisdom and promote human happiness.” Davidson College, Furman University, Johnson C. Smith University and a Methodist school called Trinity College — known today as Duke University — have unique cultures and priorities, but each has received annual unrestricted funding from The Duke Endowment since 1924. In the beginning, the unrestricted support strengthened the schools at a critical time in their growth. Johnson C. Smith, for example, was able to gain full membership in the Association of American Colleges. The university’s president said money from the Endowment allowed the school to become “so developed as to merit such recognition.” At Davidson, charred walls stood as a grim reminder of a prominent structure that had burned to the ground. Endowment funding went toward other needs, such as hiring professors, which freed money for rebuilding.
During the Great Depression, the checks became a HIGHER EDUCATION rare stream of reliable revenue. “Every penny (from the Working through Davidson Endowment) is expended with the utmost care,” Furman’s College, Duke University, Furman University and Johnson C. Smith president wrote in 1931. For several years, Endowment University to advance the pursuit support had exceeded tuition income at the university. of educational excellence, make education more affordable for qualified students and develop After the Endowment established its Committee on initiatives and programs Educational Institutions in 1961, the Trustees began approving to benefit communities special purpose grants in addition to the annual operating dollars. At first, those special grants were a small percentage of higher education funding, but they allowed Trustees to make more directed investments in the four schools. In later years, they became a major part of Endowment giving. Recently, Endowment funding has also created opportunities for Davidson, Duke, Furman and Johnson C. Smith to work together on several special initiatives, such as campus food and farming. The Endowment also brought the schools together A through a four-year grant to study student resiliency and pilot interventions to enhance it. “The annual funding continues to be important, but it is now secondary to more targeted grantmaking,” says Wilhelmina Reuben-Cooke, the Trustee who chairs DISCIPLINE the Endowment’s Committee on Educational Institutions. “Our goal remains the same: To help these four institutions provide exceptional educational experiences LIKE NO OTHER for tomorrow’s leaders.”
Photos courtesy of Johnson C. Smith University and Special Collections and Archives, Furman University Today, the Endowment’s Rural Church program area honors Mr. Duke’s desire to strengthen churches by helping them increase capacity, develop effective leadership and engage in service. Congregational Outreach grants provide resources for programs that address critical needs, such as food pantries, affordable housing and other relief projects. Clergy and Lay Leadership grants, such as the Thriving Rural Communities Initiative, support leadership development — both in preparing clergy for service in rural churches and in strengthening congregations for community roles.
2014
DISTRIBUTED $13,679,746
75 NEW GRANTS $15,126,590
28 NEW GRANTS CLERGY AND LAY LEADERSHIP $11,890,550
36 NEW GRANTS CONGREGATIONAL OUTREACH
$1,609,040 In his later years, James B. Duke attributed his success to the early guidance of his father and his church. 11 NEW GRANTS Because of his strong family ties to the RURAL CHURCH DEVELOPMENT rural Methodist church, he wanted his philanthropy to strengthen clergy and congregations and the communities $1,627,000 they served. RURAL CHURCH
In the 1920s, when parishioners decided to build Reeds Methodist Church, they chose a knoll at a country crossroads outside Lexington for their site. A local doctor donated the land and the congregation built a red-brick edifice, modern for its day. A 1925 grant from The Duke Endowment supported the work. Our founder believed that houses of faith held great significance in rural communities, and he cherished his family’s ties to the Methodist church. RURAL CHURCH By the mid-1970s, of the 2,000 Strengthening rural Methodist congregations in North United Methodist churches and the communities Carolina, more than three-fourths they serve by forming were in rural communities. Early church leaders, building funding from the Endowment congregational capacity supported church construction andfostering community in those communities, and engagement then expansion. At Reeds, the congregation received a grant from the Endowment to add an educational building in 1978, Recent grants helped Reeds open, and then expand, an emergency food pantry, providing much-needed space giving hope and a hand forward to neighbors in need. It’s now an independent for classrooms and fellowship. nonprofit serving more than 200 families a month with supplemental groceries. A dozen churches are involved. In 2014, a $27,000 grant helped Reeds expand a backpack feeding program to ensure that local elementary students had nutritious food through weekends away from school. The program includes 150 children; the grant will allow that A number to grow. Reeds’ pastor, the Rev. Duncan Martin — a former Thriving Rural Communities Fellow — says the church has become stronger by being a base of support for outreach. “Our community and our congregation can flourish,” he says, “when SERVICE we are actively engaged together.” Dr. Dennis Campbell, the Trustee who chairs the Endowment’s Committee on Rural Church, agrees. “By supporting ministry and mission, we’re helping TO COMMUNITY rural churches face today’s challenges and opportunities. With resources for outreach, congregations will be able to live out their faith in their communities, and strengthen each other through service.” FINANCIALS INVESTMENTS
The Duke Endowment’s investment portfolio is managed by DUMAC, Inc., Since James B. Duke’s a professionally-staffed investment Investment Returns organization governed by Duke (percent) death in 1925, the University. 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 assets of The Duke GROWTH OF ASSETS During 2014, the investment return on the Endowment’s portfolio was Endowment have 10.9 percent. Investment performance benefited from increases in global 17.1 17.1 $107 MILLION 16.5 achieved significant equity, hedged strategies, private capital, 14.4 13.0 12.3 10.9 real estate, natural resources, fixed 10.1 growth, from TO $3.4 BILLION income and opportunistic strategies. Impacted by investment returns, grants 4.5 $107 million to SINCE 1925 and expenses, the Endowment’s assets increased in value from $3.37 billion 0% $3.4 billion. During to $3.43 billion from December 31, 2013 to December 31, 2014. the same time, over For the 10-year period ending December $3.3 billion has been 31, 2014, the Endowment’s investment portfolio, net of fees, returned 8.4 percent annualized, outperforming its distributed in grants. -24.4 policy benchmark by 2.9 percent and a 70 percent MSCI All Country World Index/30 percent Barclays Capital Aggregate Bond Index benchmark by 2.4 percent annualized over the GRANTS AND EXPENSES same period.
Total Assets (in $ billions)
Almost 83 percent of the Endowment’s total spending 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 goes directly to grantmaking. This compares favorably to foundations of similar size. The figures below show our grantmaking in the context of other spending. FINANCIALS 3.4 3.4 This grantmaking volume depends on our ability to 3.3 invest assets wisely. 3.0 2.9 2.8 2.7 2.7 % 2.5 2.2 82.7 5.9% 5.3% 3.4% 2.7%
Administrative Investment Program Provision expenses expenses expenses for taxes dukeendowment.org $10,005,520 $9,054,966 $5,824,681 $4,499,223 Get more information about our audited financial statements.
0.0 Grants paid Amounts may differ from the 2014 Grants Summary, $140,002,189 which reports multiple-year commitments. BUILDING THE FUTURE As we reflect back, we also look ahead. Our founder wanted his philanthropy to continue in perpetuity, and we are honored to be part of his lasting legacy.
800 East Morehead Street, Charlotte, North Carolina 28202 dukeendowment.org FINANCIALS TABLE OF CONTENTS
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 5
FINANCIAL STATEMENTS STATEMENTS OF FINANCIAL POSITION 6
STATEMENTS OF ACTIVITIES 7
STATEMENTS OF CASH FLOWS 8
NOTES TO FINANCIAL STATEMENTS 9 2014 FINANCIALS
Since James B. Duke’s death in 1925, the assets of The Duke GROWTH OF ASSETS Endowment have achieved significant $107 MILLION growth, from TO $3.4 BILLION $107 million to SINCE 1925 $3.4 billion. During the same time, over $3.3 billion has been distributed in grants.
GRANTS AND EXPENSES
Almost 83 percent of the Endowment’s total spending goes directly to grantmaking. This compares favorably to foundations of similar size. The figures below show our grantmaking in the context of other spending. This grantmaking volume depends on our ability to invest assets wisely. % 82.7 5.9% 5.3% 3.4% 2.7%
Administrative Investment Program Provision expenses expenses expenses for taxes $10,005,520 $9,054,966 $5,824,681 $4,499,223
Grants paid Amounts may differ from the 2014 Grants Summary, $140,002,189 which reports multiple-year commitments.
3 THE DUKE ENDOWMENT 2014 FINANCIALS
INVESTMENTS
The Duke Endowment’s investment Investment Returns portfolio is managed by DUMAC, Inc., (percent) a professionally-staffed investment organization governed by Duke 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 University.
During 2014, the investment return on the Endowment’s portfolio was 17.1 17.1 16.5 10.9 percent. Investment performance 14.4 benefited from increases in global 13.0 12.3 10.9 10.1 equity, hedged strategies, private capital, real estate, natural resources, fixed 4.5 income and opportunistic strategies. Impacted by investment returns, grants 0% and expenses, the Endowment’s assets increased in value from $3.37 billion to $3.43 billion from December 31, 2013 to December 31, 2014.
For the 10-year period ending December 31, 2014, the Endowment’s investment -24.4 portfolio, net of fees, returned 8.4 percent annualized, outperforming its policy benchmark by 2.9 percent and a 70 percent MSCI All Country World Index/30 percent Barclays Capital Aggregate Bond Index benchmark by 2.4 percent annualized over the same period. Total Assets (in $ billions)
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
3.4 3.4 3.3
3.0 2.9 2.8 2.7 2.7 2.5
2.2
0.0
4 THE DUKE ENDOWMENT 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, 2014, and the related statements of activities and cash flows for the year 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, 2014, and the change in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Emphasis of matter As explained in Notes 2 and 5, the financial statements include certain private equity investments valued at $828,618,577 or 25% of net assets as of December 31, 2014. 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 2013 summarized comparative information We have previously audited the Endowment’s 2013 financial statements (not presented herein), and we expressed an unmodified audit opinion on those audited financial statements in our report dated May 9, 2014. In our opinion, the accompanying summarized comparative information as of and for the year ended December 31, 2013 is consistent, in all material respects, with the audited financial statements from which it has been derived.
Charlotte, North Carolina May 8, 2015
5 THE DUKE ENDOWMENT 2014 FINANCIALS
STATEMENTS OF FINANCIAL POSITION
DECEMBER 31, 2014 (WITH COMPARATIVE AMOUNTS AS OF DECEMBER 31, 2013)
ASSETS 2014 2013 Cash and cash equivalents $ 8,974,930 $ 38,977,844 Securities transactions receivable 66,347,647 69,129,051 Investments, at fair market value (Note 5) 3,308,093,757 3,228,005,042 Land, building, furniture and equipment, net 45,223,758 27,286,957 Other assets 4,515,760 3,729,969 TOTAL ASSETS $ 3,433,155,852 $ 3,367,128,863
LIABILITIES AND NET ASSETS Liabilities Grants payable $ 7,764,061 $ 15,142,089 Securities transactions payable 1,430,403 63,997,710 Notes payable 38,011,733 39,024,819 Net deferred excise tax liability 7,740,535 8,017,582 Other liabilities 13,182,045 8,699,709 TOTAL LIABILITIES $ 68,128,777 $ 134,881,909
NET ASSETS Unrestricted $ 10,353,443 $ 2,594,121 Temporarily restricted 3,094,992,554 2,969,971,755 Permanently restricted 259,681,078 259,681,078
TOTAL NET ASSETS $ 3,365,027,075 $ 3,232,246,954
TOTAL LIABILITIES AND NET ASSETS $ 3,433,155,852 $ 3,367,128,863
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
6 THE DUKE ENDOWMENT 2014 FINANCIALS
STATEMENTS OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2014 (WITH SUMMARIZED AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2013)
TEMPORARILY PERMANENTLY REVENUE UNRESTRICTED RESTRICTED RESTRICTED 2014 2013 Dividends and interest income $ 34,765,770 — — $ 34,765,770 $ 32,897,692 Other income 2,103 — — 2,103 2,421 Net realized gains on investment transactions — $ 291,446,697 — 291,446,697 229,502,739 (Decrease) increase in net unrealized appreciation on assets — (27,427,643) — (27,427,643) 268,084,045
TOTAL REVENUE $ 34,767,873 $ 264,019,054 — $ 298,786,927 $ 530,486,897
EXPENSES
Administrative $ 10,005,520 — — $ 10,005,520 $ 8,687,301 Program (Grantmaking) 5,824,681 — — 5,824,681 6,105,977 Investment 9,054,966 — — 9,054,966 7,966,896 Provision for taxes 4,499,223 — — 4,499,223 4,293,507 Increase (decrease) in pension and postretiment benefit obligation 3,998,255 — — 3,998,255 (3,525,115)
TOTAL EXPENSES $ 33,382,645 — — $ 33,382,645 $ 23,528,566
RELEASED FROM RESTRICTIONS (NOTE 3) $ 138,998,255 $ (138,998,255) — — — GRANTS APPROVED Education $ 59,003,878 — — $ 59,003,878 $ 52,640,413 Health Care 38,385,646 — — 38,385,646 32,060,001 Child Care 10,752,896 — — 10,752,896 10,006,208 Superannuated Preachers 1,965,641 — — 1,965,641 1,998,684 Building Rural Churches 1,713,250 — — 1,713,250 1,414,800 Operating Rural Churches 10,233,867 — — 10,233,867 8,516,516 Administrative Grants 2,328,900 — — 2,328,900 492,500 Special Opportunities 8,240,083 — — 8,240,083 21,115,558
TOTAL GRANTS APPROVED $ 132,624,161 — — $ 132,624,161 $ 128,244,680
CHANGE IN NET ASSETS $ 7,759,322 $ 125,020,799 — $ 132,780,121 $ 378,713,651 NET ASSETS AT BEGINNING OF YEAR $ 2,594,121 $ 2,969,971,755 $ 259,681,078 $ 3,232,246,954 $ 2,853,533,303 NET ASSETS AT END OF YEAR $ 10,353,443 $ 3,094,992,554 $ 259,681,078 $ 3,365,027,075 $ 3,232,246,954
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
7 THE DUKE ENDOWMENT 2014 FINANCIALS
STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2014 (WITH COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2013)
CASH FLOWS FROM OPERATING ACTIVITIES 2014 2013 Change in net assets $ 132,780,121 $ 378,713,651 Adjustments to reconcile change in net assets to net cash used in operating activities Net realized gains on investment transactions (291,446,697) (229,502,739) Decrease (increase) in net unrealized appreciation on assets 27,427,643 (268,084,045) Decrease (increase) in securities transactions receivable 2,781,404 (31,256,519) Increase in other assets (785,791) (734,408)
(Decrease) increase in grants payable (7,378,028) 515,635 (Decrease) increase in securities transactions payable (62,567,307) 43,104,716 Increase (decrease) in other liabilities 4,482,336 (5,383,994) NET CASH USED IN OPERATING ACTIVITIES $ (194,706,319) $ (112,627,703)
CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales and maturities of investments $ 2,350,268,794 $ 2,133,685,497 Disbursements for purchase of investments (2,166,615,502) (2,014,480,320) Disbursements for purchase of land, building, furniture and equipment (17,936,801) (22,506,051) NET CASH PROVIDED BY INVESTING ACTIVITIES $ 165,716,491 $ 96,699,126
CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on notes payable $ (1,013,086) $ (975,181) NET CASH USED IN FINANCING ACTIVITIES $ (1,013,086) $ (975,181)
NET DECREASE IN CASH AND CASH EQUIVALENTS $ (30,002,914) $ (16,903,758) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 38,977,844 55,881,602 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 8,974,930 $ 38,977,844
SUPPLEMENTAL CASH FLOW INFORMATION CASH PAID DURING THE YEAR FOR TAXES $ 4,499,223 $ 4,293,507
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
8 THE DUKE ENDOWMENT 2014 FINANCIALS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2014 (WITH COMPARATIVE AMOUNTS AS OF DECEMBER 31, 2013 AND SUMMARIZED FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2013)
(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, 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. In connection with this agreement, Duke Management Company was reorganized into a new legal entity, DUMAC LLC. Pursuant to the terms of the arrangement, the Endowment would hold equity membership in this LLC proportionate to its share of the contributed assets.
On March 1, 2012, the Endowment withdrew its share of equity membership from DUMAC LLC, and entered into a formal agreement with DUMAC, Inc. (“DUMAC”) whereby DUMAC would continue to provide investment management services to the Endowment on a not-for-profit, cost sharing basis.
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 2014 and 2013, the Endowment incurred investment management fees to DUMAC in the amount of $4,030,893 and $3,395,385, respectively. Such fees are included in investment expenses within the accompanying statement of activities.
(C) METHOD OF ACCOUNTING The Endowment presents its financial statements primarily on an accrual basis in accordance with accounting principles generally accepted in the United States of America. 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, 2014 and 2013, 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 either temporarily or permanently restricted net assets.
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9 THE DUKE ENDOWMENT 2014 FINANCIALS
North Carolina and New Jersey have both enacted the Uniform Prudent Management of Institutional Funds Act (“UPMIFA”). This law provides, in part, additional flexibility by allowing an institution to prudently spend from its endowment fund without regard to the historical value of the Corpus of the fund. In response to UPMIFA, FASB issued Staff Position on Statement No. 117 (“FSP FAS 117–1”, codified as ASC 958–205), which provides guidance on classifying net assets associated with donor-restricted endowment funds subject to UPMIFA and improves disclosure requirements. Although not subject to UPMIFA, the Endowment elected to implement the additional requirements outlined in FSP FAS 117–1.
As a result of this implementation, the trustees determined that they would classify as permanently restricted net assets (a) the original value of Original Corpus, Corpus VIII and Corpus XI, plus (b) the original value of subsequent gifts to Corpus, less (c) distributions specified by the donor. The trustees have determined that $259,681,078 be classified as permanently restricted net assets as of December 31, 2014 and 2013.
All realized gains and losses arising from investment transactions will be reflected in the statements of activities as increases or decreases in temporarily restricted net assets until such time that the trustees appropriate funds as described in Note 3 and Note 8.
Net assets and revenues, expenses, gains and losses are classified based on the existence or absence of donor- imposed restrictions. Accordingly, the net assets of the Endowment and changes therein are classified and reported as follows:
• Unrestricted Net Assets — These amounts are available for appropriation to the beneficiaries of the Endowment or for similar charitable purposes in accordance with terms of the Indenture.
• Temporarily Restricted Net Assets — These principal funds are available 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.
• Permanently Restricted Net Assets — Net assets subject to donor-imposed stipulations that they be maintained permanently by the Endowment. These funds are to be held in perpetuity and represent (a) the original value of Original Corpus, Corpus VIII and Corpus XI, plus (b) the original value of subsequent gifts to Corpus, less (c) distributions specified by the donor in the Indenture.
Dividends and interest are reported as increases in unrestricted net assets. Realized and unrealized gains and losses are reported as increases or decreases in temporarily restricted net assets in accordance with donor- imposed restrictions. Expenses and grants approved are recorded as decreases in unrestricted net assets.
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 accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Endowment’s financial statements for the year ended December 31, 2013, 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.
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10 THE DUKE ENDOWMENT 2014 FINANCIALS
(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.
(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 2014, management estimates that the Endowment will pay the 1% excise tax rate. In 2013, the Endowment was subject to the 1% excise tax rate.
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 as a whole.
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.
(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 accounting principles generally accepted in the United States of America. 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.
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11 THE DUKE ENDOWMENT 2014 FINANCIALS
(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 reported by the underlying alternative investment is concluded to represent the fair value.
(3) TRANSFERS FROM CORPUS
In December 2009, the Indenture was modified by court order to allow the trustees to expend restricted net assets 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 restricted net assets to unrestricted net assets to the extent necessary to comply with the provisions set forth in Section 4942 of the Internal Revenue Code. The trustees determined that transfers of principal funds in 2014 and 2013 in the amounts of $138,998,255 and $118,974,885, respectively, were required.
(4) PROVISION FOR TAXES AND DEFERRED EXCISE TAX LIABILITY
During 2014 and 2013, the Endowment recorded a provision for current year estimated excise taxes in the amounts of $4,499,223 and $4,293,507, respectively. This was allocated to the net change in unrestricted net assets. The decrease in deferred excise tax liability was $277,047 and was allocated to unrealized appreciation in temporarily restricted net assets for 2014. The Endowment’s net deferred excise tax liability was $7,740,535 and $8,017,582 at December 31, 2014 and 2013, respectively, which primarily relates to unrealized gains on investments.
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12 THE DUKE ENDOWMENT 2014 FINANCIALS
(5) INVESTMENTS
Investments are composed of the following:
2014 COST 2014 MARKET Equities $ 506,095,039 $ 718,222,919 Fixed income 45,693,210 42,119,106 Private investments 552,527,088 828,618,577 Real assets 401,006,364 475,019,270 Hedged strategies 543,673,461 764,904,340 Short-term investments 450,237,131 450,237,131 Other 34,781,630 28,972,414 $ 2,534,013,923 $ 3,308,093,757
2013 COST 2013 MARKET Equities $ 602,135,636 $ 855,785,002
Fixed income 152,329,930 152,728,966
Private investments 518,650,015 712,268,394
Real assets 420,730,219 562,960,879
Hedged strategies 487,115,643 698,514,051
Short-term investments 236,169,457 236,169,457
Other 9,160,957 9,578,293 $ 2,426,291,857 $ 3,228,005,042
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13 THE DUKE ENDOWMENT 2014 FINANCIALS
Investment liquidity as of December 31, 2014, is summarized below and listed in the order based on redemption or sale period:
REDEMPTION REDEMPTION UNFUNDED FREQUENCY NOTICE PERIOD As of December 31, 2014: FAIR VALUE COMMITMENTS (IN DAYS) (IN DAYS) Short-term investments (a) $ 450,237,131 — daily 1 Fixed income (b) 42,119,106 — 1 to 30 1 to 30 Equities (c) 718,222,919 — 55% 1 to 30 1 to 90 32% 31 to 90 9% 91 to 365 4% over 365 Hedged strategies (d) 764,904,340 $ 1,200,000 9% 1 to 30 30 to 180 70% 31 to 90 10% 91 to 365 11% over 365 Private investments (e) 828,618,577 232,298,938 N/A N/A Real assets (f) 475,019,270 230,260,609 N/A N/A Other 28,972,414 — N/A N/A TOTAL INVESTMENTS $ 3,308,093,757 $ 463,759,547
Investment liquidity as of December 31, 2013, is summarized below and listed in the order based on redemption or sale period:
REDEMPTION REDEMPTION UNFUNDED FREQUENCY NOTICE PERIOD As of December 31, 2013: FAIR VALUE COMMITMENTS (IN DAYS) (IN DAYS) Short-term investments (a) $ 236,169,457 — daily 1
Fixed income (b) 152,728,966 — 1 to 30 1 to 30 Equities (c) 855,785,002 $ 81,386 48% 1 to 30 1 to 90 41% 31 to 90 7% 91 to 365 4% over 365 Hedged strategies (d) 698,514,051 1,200,000 11% 1 to 30 30 to 180 62% 31 to 90 14% 91 to 365 13% over 365 Private investments (e) 712,268,394 193,850,000 N/A N/A Real assets (f) 562,960,879 242,588,000 N/A N/A Other 9,578,293 — N/A N/A TOTAL INVESTMENTS $ 3,228,005,042 $ 437,719,386
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14 THE DUKE ENDOWMENT 2014 FINANCIALS
(a) Includes short-term U.S. Treasury and other highly liquid debt securities with maturities of less than one year. At December 31, 2014 and 2013, $29,370,261 and $15,216,315, respectively, was posted as collateral and thus not readily available for use.
(b) Includes non-government U.S. and non-U.S. debt securities.
(c) Includes U.S. and non-U.S. stocks and funds that invest predominantly long but also short stocks.
(d) Includes both long and short investments in U.S. and non-U.S. stocks, credit-oriented securities, and arbitrage strategies.
(e) Includes illiquid investments in venture capital, buyouts, and credit. Distributions are received through liquidation of the underlying assets of the funds which are anticipated to occur over the next 4 to 10 years.
(f) Includes illiquid investments in residential and commercial real estate, oil and gas production, energy, other commodities, and related services businesses. Distributions are received through liquidations of the underlying assets of the funds which are anticipated to occur over the next 5 to 12 years.
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, 2014, $2,075,554,113, or 62.7% of the Endowment’s total investments, are valued using Level 3 inputs. At December 31, 2013, $1,989,368,792, or 61.6% 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. As of December 31, 2014 and 2013, the Endowment had no material financial assets or financial liabilities that were measured at fair value on a non-recurring basis.
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15 THE DUKE ENDOWMENT 2014 FINANCIALS
QUOTED PRICES SIGNIFICANT IN ACTIVE OTHER SIGNIFICANT MARKETS FOR OBSERVABLE UNOBSERVABLE IDENTICAL ITEMS INPUTS INPUTS As of December 31, 2014: FAIR VALUE (LEVEL 1) (LEVEL 2) (LEVEL 3) Equities $ 718,222,919 $ 259,294,675 $ 327,512,742 $ 131,415,502 Fixed income 42,119,106 3,710,007 38,409,099 — Private investments 828,618,577 2,768,395 — 825,850,182 Real assets 475,019,270 (7,881,903) — 482,901,173 Hedged strategies 764,904,340 724,759 128,792,325 635,387,256 Short-term investments 450,237,131 — 450,237,131 — Other 28,972,414 (404,304) 29,376,718 — TOTAL ASSETS MEASURED $ 3,308,093,757 $ 258,211,629 $ 974,328,015 $ 2,075,554,113 ON A RECURRING BASIS
QUOTED PRICES SIGNIFICANT IN ACTIVE OTHER SIGNIFICANT MARKETS FOR OBSERVABLE UNOBSERVABLE IDENTICAL ITEMS INPUTS INPUTS As of December 31, 2013: FAIR VALUE (LEVEL 1) (LEVEL 2) (LEVEL 3) Equities $ 855,785,002 $ 281,063,013 $ 409,020,853 $ 165,701,136 Fixed income 152,728,966 41,807,059 110,921,907 — Private investments 712,268,394 4,425,597 — 707,842,797 Real assets 562,960,879 1,841,230 — 561,119,649 Hedged strategies 698,514,051 141,605 143,667,236 554,705,210 Short-term investments 236,169,457 — 236,169,457 — Other 9,578,293 679,201 8,899,092 — TOTAL ASSETS MEASURED $ 3,228,005,042 $ 329,957,705 $ 908,678,545 $ 1,989,368,792 ON A RECURRING BASIS
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16 THE DUKE ENDOWMENT 2014 FINANCIALS
The Endowment has included a summary of the investment valuation methodologies in Note 2.
For the years ended 2014 and 2013, there have been no significant transfers in or out of Level 1 and Level 2 fair value measurements of the Endowment’s investment portfolio, aside from the transfers into/out of Level 3 assets as described below.
The following table presents additional information about Level 3 assets measured at fair value. Both observable and unobservable inputs may be used to determine the fair value of positions that the Endowment has classified within the Level 3 category. As a result, the unrealized gains and losses for assets within the Level 3 category in the table below may include changes in fair value that were attributable to both observable and unobservable inputs.
BALANCE OF LEVEL 3 INVESTMENTS AS OF DECEMBER 31, 2013 $ 1,989,368,792 Net realized gains 199,399,635 Increase in net unrealized appreciation 32,222,230 Purchases 459,800,276 Proceeds from sales and maturity of investments (630,794,340) Transfers to Level 3 from Level 1 or Level 2 due to liquidity 86,766,604 Transfers from Level 3 to Level 1 or Level 2 due to liquidity (61,209,084) BALANCE OF LEVEL 3 INVESTMENTS AS OF DECEMBER 31, 2014 $ 2,075,554,113
The following summarizes the relationship between cost and market value of investments:
2014 2013 Gross unrealized gain, net of deferred excise tax $ 899,519,195 $ 893,213,107 Gross unrealized loss (133,206,194) (99,472,463) EXCESS OF MARKET OVER COST $ 766,313,001 $ 793,740,644
(Decrease) Increase in net unrealized appreciation on assets $ (27,427,643) $ 268,084,045 Net realized gains from sale of investments 291,446,697 229,502,739 TOTAL NET GAIN $ 264,019,054 $ 497,586,784
Investment income 34,767,873 32,900,113 TOTAL RETURN $ 298,786,927 $ 530,486,897
The gross unrealized gains or losses include $26,298 losses and $45,041 gains relating to short-term investments at December 31, 2014 and 2013, respectively, which are recorded in cash and cash equivalents on the statements of financial position.
As discussed in Note 4, a provision for deferred excise taxes of $7,740,535 and $8,017,582 was also allocated to gross unrealized gain in 2014 and 2013, respectively.
At December 31, 2014 and 2013, 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, 2014 and 2013, there were no investment securities on loan.
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. Changes in the fair value of derivative instruments are recognized as unrealized gains or losses in the accompanying statements of activities. As of December 31, 2014 and 2013, the fair value of derivative investments totaled approximately $14,889,185 and $8,678,998 with notional amounts of approximately $2,376,369,218 and $3,235,215,000, respectively.
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17 THE DUKE ENDOWMENT 2014 FINANCIALS
(6) LAND, BUILDING, FURNITURE AND EQUIPMENT
Land, buildings, and equipment, net, are summarized as follows at December 31:
2014 2013 Land $ 4,303,101 $ 4,303,101 Building 37,512,086 22,683,856 Furniture 2,200,280 300,000 Technological equipment 1,208,291 — EXCESS OF MARKET OVER COST $ 45,223,758 $ 27,286,957
(7) 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 will apply the proceeds of the sale of the notes to complete the construction of its headquarters to be 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, 2014 and December 31, 2013, the principal balance of the notes payable was $38,011,733 and $39,024,819, respectively, which approximates fair value.
Future maturities of the principal note payments are as follows:
AMOUNT 2015 $ 1,052,466 2016 1,093,376 2017 1,135,876 2018 1,180,028 2019 1,225,896 Thereafter 32,324,091 $ 38,011,733
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, 2014.
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18 THE DUKE ENDOWMENT 2014 FINANCIALS
(8) NET ASSETS
Temporarily restricted net assets consist of the following at December 31:
2014 2013 Duke University under Original Corpus, Corpus $ 646,507,919 $ 620,392,529 Item VIII and Corpus Item XI Other charitable purposes 2,448,484,635 2,349,579,226 TEMPORARILY RESTRICTED NET ASSETS $ 3,094,992,554 $ 2,969,971,755
Permanently restricted net assets consist of the following at December 31:
2014 2013 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 PERMANENTLY RESTRICTED NET ASSETS $ 259,681,078 $ 259,681,078
(9) 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 of $0 and $1,450,000 were made to the plan during 2014 and 2013, respectively. The benefit obligation as of December 31, 2014 and 2013 was $19,440,483 and $15,556,732, respectively, and the net pension liability, included in the other liabilities in the statements of financial position, was $7,415,235 and $3,416,980, respectively, based on actuarial assumptions at December 31, 2014 and 2013.
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 2014 and 2013 were $187,012 and $179,603, 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, 2013 was $3,041,907. At December 31, 2014, 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.
(10) SUBSEQUENT EVENTS
The Endowment has evaluated its December 31, 2014 financial statements for subsequent events through May 8, 2015, the date the financial statements were available to be issued. The Endowment is not aware of any subsequent events which would require recognition or disclosure in the financial statements.
19 THE DUKE ENDOWMENT 800 East Morehead Street, Charlotte, North Carolina 28202 dukeendowment.org GRANTMAKING TABLE OF CONTENTS
OVERVIEW 3
CHILD CARE 5
HEALTH CARE 8
HIGHER EDUCATION 12
RURAL CHURCH 14
CROSS PROGRAM & SPECIAL OPPORTUNITIES 18 2014 GRANTMAKING
A GROWING INVESTMENT 1924–2014 In 2014, The Duke Endowment distributed $140 million through 375 grants, some of which were approved in previous years. The Endowment approved 198 new grants totaling over $96.9 million, some of which will be paid in future years.
3 THE DUKE ENDOWMENT CHILD DISTRIBUTED CARE $10,556,272 $9,839,666 IN NEW GRANTS APPROVED
HEALTH DISTRIBUTED CARE $45,204,012 $31,288,463 IN NEW GRANTS APPROVED
HIGHER DISTRIBUTED EDUCATION $59,212,078 $31,825,000 IN NEW GRANTS APPROVED
RURAL DISTRIBUTED CHURCH $13,679,746 $15,126,590 IN NEW GRANTS APPROVED
CROSS PROGRAM/ DISTRIBUTED SPECIAL OPPORTUNITY $11,350,081 $8,860,392 IN NEW GRANTS APPROVED
DISTRIBUTED TOTAL GRANTMAKING $140,002,189 $96,940,111 IN NEW GRANTS APPROVED
4 THE DUKE ENDOWMENT 2014 GRANTMAKING CHILD CARE
Helping vulnerable children lead successful lives by supporting early intervention, collaborative approaches and evidence-based programs that help serve children and their families more effectively.
2014
DISTRIBUTED $10,556,272
35 NEW GRANTS $9,839,666
18 NEW GRANTS OUT-OF-HOME CARE $5,318,811
17 NEW GRANTS As a child, James B. Duke suffered PREVENTION AND EARLY the loss of his mother, then lived with INTERVENTION his grandparents while his father was sent off to war. His compassion for $4,520,855 children without supportive families helped shape his vision for a better world and became an important part of his legacy.
5 THE DUKE ENDOWMENT 2014 GRANTMAKINGCHILD CARE CHILD CARE
NORTH CAROLINA
Out-of-home care Prevention and early intervention
Asheville The Bair Foundation Durham Center for Child and Family Policy $50,000 To recruit and train therapeutic foster $850,000 To effect a measurable reduction in child families in the Smoky Mountain region. abuse and neglect rates of young children and families in Durham. $50,000 To implement Intensive Alternative Family Treatment. $20,000 To study assessment tools currently used in child welfare.
Black Mountain Black Mountain Home for Children, Youth & Families Durham Exchange Clubs Child Abuse Prevention $40,000 To contract with an information technology Center in Durham specialist. $441,090 To replicate Multidimensional Family Therapy.
Charlotte Alexander Youth Network Raleigh Prevent Child Abuse North Carolina $48,521 To expand the Intensive Alternative Family $400,000 To support the infrastructure needed Treatment program. to implement Incredible Years and Strengthening Families across North Carolina.
Durham Duke University Health System $50,000 To broaden support for evidence-based $1,197,702 To support the training and coaching for programs that strengthen families. Together Facing the Challenge, a therapeutic foster care model. Silva Reach Out and Read Carolinas $422,600 To support Reach Out and Read, an Gibsonville Rapid Resource for Families evidence-based health, literacy and school $110,000 To support Intensive Alternative Family readiness program. Treatment.
Statesville Barium Springs Home for Children Greensboro Youth Focus $90,000 To support North Carolina Reclaiming $11,235 To support a job training program for young Futures, a promising substance abuse and women transitioning out of foster care. juvenile justice recovery program.
Newton Catawba County Department of Thomasville Baptist Children’s Homes of North Carolina Social Services $150,000 To support the Family Care Ministry. $403,809 To expand the Catawba County Child Well-Being Project into seven counties. Wake Forest Center for Supportive Schools $360,000 To expand the Teen Prevention Education Raleigh Benchmarks Program across six schools in North Carolina. $340,000 To fund a public-private collaboration to improve service integration and quality for youth in foster care. Winston-Salem CenterPoint Human Services $90,000 To support North Carolina Reclaiming Futures, a promising substance abuse and Rockwell Nazareth Children’s Home juvenile justice recovery program. $75,000 To offset costs resulting from a merger.
Statesville Barium Springs Home for Children $350,000 To offset costs related to a merger with Grandfather Home for Children.
Thomasville Baptist Children’s Homes of North Carolina $189,000 To support facility renovations.
Winston-Salem Winston-Salem Foundation $200,000 To support the Forsyth County Youth in Transition Initiative.
6 THE DUKE ENDOWMENT 2014 GRANTMAKINGCHILD CARE CHILD CARE
SOUTH CAROLINA OTHER
Out-of-home care Out-of-home care
Awendaw Windwood Farm Home for Children Baltimore Annie E. Casey Foundation $260,000 To support home-based services. $1,000,000 To adapt a standardized assessment tool for child welfare in at least two counties in North Carolina. Columbia South Carolina Youth Advocate Program $275,100 To support the Foster to Permanency program. Bethesda Child Trends $643,444 To evaluate the expansion of the Child Well- Being Project.
Prevention and early intervention Daytona Beach Neighbor to Family $75,000 To establish a professional foster care program serving sibling groups in Charleston, SC. Columbia South Carolina Department of Social Services $128,925 To staff a public/private council to develop solutions for serving South Carolina’s foster children. Prevention and early intervention
Greenville Institute for Child Success $359,350 To hire a full-time development officer and policy counsel and provide general operating Washington, D.C. National Children’s Alliance support. $825,890 To replicate the Child and Family Traumatic Stress Intervention in children’s advocacy centers in the Carolinas. Greenville Youth Advocate Programs $35,000 To support community based and behavioral health services.
Greenwood Connie Maxwell Children’s Home $75,000 To support the Family Care ministry.
N. Charleston Reading Partners Charleston $100,000 To implement Reading Partners, a promising tutorial program for disadvantaged youth.
Spartanburg USC Upstate $123,000 To support a child protection training center.
7 THE DUKE ENDOWMENT 2014 GRANTMAKING HEALTH CARE
Enhancing the lives of individuals and the vitality of communities by promoting prevention, improving the quality and safety of services and increasing access to care.
2014 DISTRIBUTED $45,204,012
62 NEW GRANTS $31,288,463
26 NEW GRANTS ACCESS TO HEALTH CARE $11,496,672
5 NEW GRANTS A healthy man for most of his life, PREVENTION James B. Duke was profoundly affected by the illness of others. $2,161,128 Having lost his half-brother and his beloved mother to typhoid fever before his second birthday, he sought 31 NEW GRANTS QUALITY AND SAFETY OF HEALTH CARE to educate physicians and support health care through his philanthropy. $17,630,663
8 THE DUKE ENDOWMENT 2014 GRANTMAKING HEALTH CARE
NORTH CAROLINA
Access to health care
Ahoskie Vidant Roanoke-Chowan Hospital Smithfield Johnston Memorial Hospital $432,302 To expand a community network of care for $329,750 To expand a community network of care for the low-income, uninsured. the low-income, uninsured.
Asheville Mission Health Systems Spruce Pine Blue Ridge Regional Hospital $701,207 To expand a school-based telehealth program. $109,987 To expand a community network of care for the low-income, uninsured in Mitchell and $500,000 To provide primary care for high-risk patients. Yancey counties.
Elizabeth City Sentara Albemarle Hospital Statesville Iredell Memorial Hospital $196,500 To expand a community network of care for $250,000 To establish a pediatric and dental facility. the low-income, uninsured.
Wilmington New Hanover Regional Medical Center Elkin Hugh Chatham Memorial Hospital $309,000 To expand Wilmington Health Access $200,000 To establish a primary care and urgent for Teens. care facility.
Winston-Salem Wake Forest University Health Sciences Gastonia Caromont Health $317,926 To evaluate a faith-based and community $500,000 To expand a community network of care for partnership program. the low-income, uninsured.
Greensboro Moses H. Cone Memorial Hospital $400,000 To expand a community network of care for Prevention and health equity the low-income, uninsured. Chapel Hill University of North Carolina at Chapel Hill $529,817 To establish a program to implement preterm- Hendersonville Park Ridge Hospital birth risk guidelines. $350,000 To expand a community network of care for the low-income, uninsured. $461,750 To establish a program to improve cancer survivor care.
Monroe Carolinas Medical Center — Union $150,000 To expand a community network of care for Goldsboro Wayne Memorial Hospital the low-income, uninsured in Union and Anson $307,670 To expand a community-based health and counties. wellness program.
Morehead City Carteret General Hospital Salisbury Rowan Regional Medical Center Foundation $250,000 To establish a cancer center. $261,891 To implement a wellness program at Livingstone College.
North Wilkesboro Wilkes Regional Medical Center $300,000 To expand a community network of care for the low-income, uninsured.
Raleigh Foundation for Nursing Excellence $750,000 To increase the number of Bachelor of Science in Nursing graduates in North Carolina.
Raleigh North Carolina Department of Health and Human Services Office of Rural Health and Community Care $1,500,000 To expand a statewide telepsychiatry program.
9 THE DUKE ENDOWMENT 2014 GRANTMAKING HEALTH CARE
NORTH CAROLINA
Quality and safety of health care
Asheville CarePartners Health Services Morrisville North Carolina Institute of Medicine $708,221 To expand a care transitions program in $400,000 To publish the North Carolina Medical Journal. western North Carolina.
North Wilkesboro Wilkes Regional Medical Center Asheville Mountain Area Health Education Center $188,018 To establish a Radiography Training Program $765,439 To develop a regional perinatal program in at Wilkes Community College. western North Carolina.
Raleigh WakeMed Boone Appalachian Regional Healthcare System $275,819 To implement a hospital Elder Life Program. $500,000 To establish a post-acute care facility.
Salisbury Rowan Regional Medical Center Foundation Cary North Carolina Hospital Foundation $70,000 To establish a diabetes education and $3,250,000 To implement a care transitions program. management program in Rowan County.
$373,100 To support the North Carolina Center for Rural Health Innovation and Performance. Smithfield Johnston Memorial Hospital $350,000 To implement a care transitions program. $314,333 To support the North Carolina Alliance for Effective Care Transitions. Wilmington New Hanover Regional Medical Center $255,840 To support a web-based data collection and $900,000 To establish a hospital-wide care transitions analysis program for North Carolina hospitals. program.
Chapel Hill University of North Carolina at Chapel Hill $430,000 To establish a telemedicine program for burn care.
Charlotte Charlotte Neuroscience Foundation $200,000 To establish a memory care program.
Durham Duke University Health System $1,000,000 To establish a translational rehabilitation laboratory.
$750,000 To develop a new model for community-based eye care delivery.
Hickory Catawba Valley Medical Center $267,500 To implement a medical home model for disease management and prevention.
Kinston Lenoir Memorial Hospital $282,898 To establish a stroke center.
Lumberton Southeastern Regional Medical Center $500,000 To develop a residency program for primary care physicians.
Marion McDowell Hospital $218,520 To implement a medication reconciliation and adherence program in McDowell County.
10 THE DUKE ENDOWMENT 2014 GRANTMAKING HEALTH CARE
SOUTH CAROLINA
Access to health care Prevention and health equity
Beaufort Beaufort Memorial Hospital Charleston Medical University of South $500,000 To expand a community network of care for Carolina Foundation the low-income, uninsured in Beaufort and $600,000 To expand a school-based obesity prevention Jasper counties. program.
Columbia Palmetto Health $500,000 To expand a community network of care for the low-income, uninsured. Quality and safety of health care
Columbia South Carolina Department of Mental Health $750,000 To expand a statewide telepsychiatry program. Charleston Medical University of South Carolina Foundation Edgefield Edgefield County Hospital $600,000 To establish a school-based telehealth program. $500,000 To expand a community network of care for the low-income, uninsured in Edgefield and Greenwood counties. $550,000 To expand a regional health information exchange network.
Georgetown Georgetown Memorial Hospital Columbia Palmetto Health $500,000 To expand a community network of care for the low-income, uninsured. $600,000 To expand a regional health information exchange.
Greenville Greenville Hospital System $500,000 To develop a mobile simulation program. $500,000 To expand a community network of care for the low-income, uninsured. Columbia South Carolina Hospital Research & Education Foundation $500,000 To develop medical neighborhoods. $1,675,000 To implement a care transitions program.
Rock Hill Catawba Care Coalition $40,000 To support the Small and Rural Hospital Conference. $200,000 To establish a community health center serving the low-income, uninsured and underinsured. Columbia South Carolina Research Foundation $150,000 To develop a program for organizational development and board governance at the Institute of Medicine and Public Health.
Florence McLeod Regional Medical Center of the Pee Dee $275,505 To establish a care transitions program in Dillon.
Greenville Greenville Hospital System $990,470 To implement a Memory Health Program.
Liver River McLeod Loris Seacoast Hospital $250,000 To expand the emergency department.
11 THE DUKE ENDOWMENT 2014 GRANTMAKING HIGHER EDUCATION
Working through Davidson College, Duke University, Furman University and Johnson C. Smith University to advance the pursuit of educational excellence, make education more affordable for qualified students and develop initiatives and programs to benefit communities.
2014
DISTRIBUTED $59,212,078
13 NEW GRANTS $31,825,000
11 NEW GRANTS ACADEMIC EXCELLENCE $18,325,000
2 NEW GRANTS James B. Duke’s formal education EDUCATIONAL ACCESS AND SUCCESS was limited, but he admired and respected the contributions of $13,500,000 teachers, preachers, lawyers and physicians. He believed educating principled people in these fields would generate individual contributions that would, in turn, benefit society.
12 THE DUKE ENDOWMENT 2014 GRANTMAKING HIGHER EDUCATION
NORTH CAROLINA
Academic excellence
Charlotte Johnson C. Smith University $1,400,000 To provide unrestricted operating support.
$100,000 To support academic initiatives.
Davidson Davidson College $1,400,000 To provide unrestricted operating support.
$100,000 To support academic initiatives.
Durham Duke University $325,000 To create a B.N. Duke Scholars Network to link alumni and current scholars.
$100,000 To support academic initiatives.
Greenville Furman University $1,400,000 To provide unrestricted operating support.
$600,000 To support strategic initiatives.
$300,000 To support the president’s institutional priorities.
$100,000 To support academic initiatives.
Educational access and success
Davidson Davidson College $6,000,000 To help Davidson sustain and enhance its commitment to access and affordability through The Davidson Trust.
Durham Duke University $7,500,000 To support the Graduate Fellowship Endowment and Challenge Fund.
13 THE DUKE ENDOWMENT 2014 GRANTMAKING RURAL CHURCH
Developing rural United Methodist churches, supporting their clergy and lay leaders and expanding church outreach across North Carolina.
2014
DISTRIBUTED $13,679,746
75 NEW GRANTS $15,126,590
28 NEW GRANTS CLERGY AND LAY LEADERSHIP $11,890,550
36 NEW GRANTS In his later years, James B. Duke CONGREGATIONAL OUTREACH attributed his success to the early guidance of his father and his church. $1,609,040 Because of his strong family ties to the rural Methodist church, he wanted his philanthropy to strengthen clergy and 11 NEW GRANTS RURAL CHURCH DEVELOPMENT congregations and the communities they served. $1,627,000
14 THE DUKE ENDOWMENT 2014 GRANTMAKING RURAL CHURCH
NORTH CAROLINA
Clergy and lay leadership
Boone Western North Carolina Conference United Garner North Carolina Conference United Methodist Church Methodist Church $1,155,951 To provide pensions to retired ministers and $809,690 To provide pensions to retired ministers and widows and dependent children of deceased widows and dependent children of deceased ministers. ministers.
$1,122,316 To support training for Residency in Ordained $325,000 To establish a conflict transformation Ministry. intervention for rural churches.
$40,000 To support a lay leadership program. $120,000 To support the North Carolina Conference Empowering Network Initiative. $26,000 To support clergy resilience. $65,000 To support the Disciple Bible Outreach program. Charlotte Queens University of Charlotte $478,593 To develop a pastoral residency and $57,000 To support reaching younger diverse people development program. in rural communities.
Durham Duke Divinity School Gastonia Catawba Valley District $2,500,000 To expand the Benjamin Newton Duke $25,000 To expand a leadership program. Scholarship.
$1,460,000 To support Hispanic House of Studies 2.0. Hayesville Hinton Rural Life Center $50,000 To support an outreach coordinator position. $1,247,000 To provide scholarships for the 2014 Summer Field Education Assistant Pastors program. Misenheimer The Village Church of Pfeiffer University $984,000 To provide scholarships for the 2014 Field $68,000 To support a leadership development program. Education Assistant Pastors and Student Pastors program. Spruce Pine Spruce Pine United Methodist Church $300,000 To support rural United Methodists attending $150,000 To establish a youth ministry. continuing education events at Duke University Divinity School. Todd Blackburn’s Chapel United Methodist Church $100,000 To support the Director of Field Education and $225,000 To expand a program that develops to provide training and counseling service to congregational and church leaders. Field Education students.
$72,000 To support defining and identifying rural Wilkesboro Appalachian District churches. $20,000 To support clergy leadership.
Garner Corridor District $60,000 To develop a food-centered wellness program for clergy and congregations. Congregational outreach
Garner Fairway District $40,000 To support a Hispanic ministry program. Advance Bethlehem United Methodist Church $100,000 To support affordable housing. $25,000 To develop an English as a second language program. Ahoskie Ahoskie United Methodist Church $40,000 To support a literacy curriculum for an Garner Heritage District after-school program. $90,000 To support a Hispanic ministry program.
Aulander All God’s Children United Methodist Church $40,000 To expand a children’s nutrition program.
15 THE DUKE ENDOWMENT 2014 GRANTMAKING RURAL CHURCH
NORTH CAROLINA
Congregational outreach (continued)
Bahama Mount Bethel United Methodist Church Lincolnton Messiah United Methodist Church $10,500 To expand a food pantry and clothing closet. $10,000 To support a community garden.
Benson Benson United Methodist Church Mocksville Union Chapel United Methodist Church $30,000 To expand an outreach program. $45,000 To support a backpack ministry program.
Bessemer City Concord United Methodist Church Nebo Trinity United Methodist Church $15,000 To expand a community gardening program. $10,000 To expand a food pantry program.
Boone Western North Carolina Conference United Norman Norman United Methodist Church Methodist Church $40,000 To expand a community garden program. $90,000 To engage churches in local schools.
North Wilkesboro Arbor Grove United Methodist Church Cameron Solid Rock United Methodist Church $10,000 To expand a tutoring program. $220,000 To relocate a food pantry.
North Wilkesboro Crossfire United Methodist Church Carthage Carthage United Methodist Church $35,000 To support a food ministry program. $10,000 To relocate and expand a food pantry.
Peachland Hopewell United Methodist Church Crumpler Nathan’s Creek United Methodist Church $22,500 To develop an aquaponics cooperative. $77,500 To support a community food program.
Pittsboro Rural Advancement Foundation Enfield New Focus United Methodist Church International-USA $130,000 To begin a literacy program. $68,000 To support Come to the Table conferences.
Garner North Carolina Conference United Plymouth Plymouth United Methodist Church Methodist Church $47,000 To support affordable housing. $55,540 To engage churches in local schools.
Polkville Brooks Chapel United Methodist Church Granite Falls Ebenezer United Methodist Church $10,000 To begin a summer enrichment program. $75,000 To support a food pantry.
Richlands Richlands United Methodist Church Havelock Cherry Point United Methodist Church $31,500 To develop a community backpack program. $25,000 To expand an outreach program.
Rose Hill Rose Hill United Methodist Church Hayesville Ledford’s Chapel United Methodist Church $32,500 To support a food ministry program. $20,000 To expand a food and literacy outreach program. Sanford Cedar Grove United Methodist Church $64,000 To begin a summer literacy camp. Laurinburg First United Methodist Church $60,000 To support an after-school tutoring program. Selma Edgerton Memorial United Methodist Church $16,000 To support a literacy program. Lexington Reeds United Methodist Church $27,000 To expand a backpack feeding program. Siler City El Camino United Methodist Church $10,000 To support a food ministry program. Lincolnton Boger City United Methodist Church $2,000 To support a literacy program.
16 THE DUKE ENDOWMENT 2014 GRANTMAKING RURAL CHURCH
NORTH CAROLINA OTHER
Congregational outreach (continued) Clergy and lay leadership
Surf City Faith Harbor United Methodist Church Conshohocken Center for Assessment and Policy $35,000 To expand a food ministry program. Development $275,000 To evaluate the Thriving Rural Communities Initiative 2.0 and Thriving Hispanic/Latino Wallace Wallace United Methodist Church Communities Initiative. $35,000 To support a food ministry program.
Wilkesboro Appalachian District $60,000 To support a backpack ministry program.
Rural church development
Asheville Givens Estates $700,000 To provide affordable housing for low-income seniors.
Boone Western North Carolina Conference United Methodist Church $50,000 To support consultation for rural congregations.
Camden Camden United Methodist Church $60,000 To provide assistance with disaster relief.
Goldsboro Falling Creek United Methodist Church $43,000 To renovate the sanctuary.
Hayesville Hinton Rural Life Center $150,000 To build communications capacity.
Lake Waccamaw Lake Waccamaw United Methodist Church $150,000 To build a fellowship hall.
Marietta Olivet United Methodist Church $30,000 To renovate the sanctuary.
Pinnacle Fairview United Methodist Church $150,000 To renovate the church campus.
Pittsboro Mount Pleasant UMC $20,000 To support renovations.
Townsville Tabernacle United Methodist Church $150,000 To construct a fellowship hall addition.
Wilson Evansdale United Methodist Church $124,000 To renovate the sanctuary and fellowship hall.
17 THE DUKE ENDOWMENT 2014 GRANTMAKING CROSS PROGRAM & SPECIAL OPPORTUNITIES
The Duke Endowment’s Cross Program grants tap the resources and expertise of two or more of the Endowment’s program areas. Special Opportunity grants are made to organizations to further the Endowment’s core program priorities.
2014
DISTRIBUTED $11,350,081
13 NEW GRANTS $8,860,392
18 THE DUKE ENDOWMENT 2014 GRANTMAKING CROSS PROGRAM & SPECIAL OPPORTUNITIES
NORTH CAROLINA OTHER
Charlotte Foundation for the Carolinas Denver Nurse-Family Partnership National $750,000 To create implementation and evaluation plans Service Office for improving third grade reading in Charlotte. $4,000,000 To support the expansion of Nurse-Family Partnership in North Carolina and South $25,000 To support Charlotte’s Third Grade Reading Carolina. Action Team to ensure that children in Charlotte are reading on or above grade level by the end of third grade. Cambridge Center for Effective Philanthropy $7,500 To conduct a communications study.
Charlotte Johnson C. Smith University $451,000 To support the relocation of Elon Homes for Multiple Multiple Regional and National Children to the Johnson C. Smith University Affinity Groups campus. $310,200 To support philanthropic advocacy organizations and affinity groups.
Charlotte The Lynnwood Foundation $1,100,000 To contribute to the permanent endowment Multiple Rural Methodist Churches and Hospitals and support capital improvements. $300,000 To implement recommendations identified through energy audits.
Charlotte Trail of History $300,000 To honor James B. Duke on the Trail of History.
Durham Duke University Health System $250,000 To commemorate the service and leadership of Dr. William G. Anlyan as a Trustee of The Duke Endowment.
Greensboro Children’s Home Society of North Carolina $1,000,000 To provide matching support for the Social Innovation Fund to scale Family Finding throughout North Carolina.
Greensboro Moses H. Cone Memorial Hospital $50,000 To support a county-level study on the potential impact of Medicaid expansion in North Carolina.
Raleigh North Carolina Department of Health and Human Services Office of Rural Health and Community Care $316,692 To implement and evaluate Fostering Health NC, a program to connect children in foster care to medical homes.
19 THE DUKE ENDOWMENT 800 East Morehead Street, Charlotte, North Carolina 28202 dukeendowment.org