Trends in Philanthropy

January 9, 2018

GHCF OVERVIEW

• Public Charitable Foundation, 33rd largest Community Foundation in U.S.

• Work with donors on maximizing the impact of their giving

• 2016 statistics: $640 million of assets under management, $107 million grants, about 1,000 donors

• Staff of 32 professionals

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GHCF GRANTS BY PROGRAM AREA From 1/1/2016 to 12/31/2016

Total Gifts to Fund

$111,000,000

Total Grants from Fund

$64,500,00

HURRICANE HARVEY RELIEF FUND

HURRICANE HARVEY CORPORATE EMPLOYEE RELIEF FUNDS

# of Funds Established

51 New & 8 Reinstated

Total Gifts to Date

$8.5 million

Grants Disbursed to Date

3000+

Philanthropic Ecosystems

SOURCE: Giving USA Foundation | GIVING USA 2017

SOURCE: Giving USA Foundation | GIVING USA 2017

SOURCE: Giving USA Foundation | GIVING USA 2017

SOURCE: Giving USA Foundation | GIVING USA 2017

Philanthropic Ecosystems HOUSTON RESOURCES – BY THE

NUMBERS

HOUSTON MSA: FOUNDATIONS BY ASSET RANGE # OF

FDNS ASSET RANGE ASSETS GIVING

50 $50 million or more $13,550,038,240 $847,307,081

99 $10 million to $49.9 million $2,115,684,381 $150,465,841

92 $5 million to $9.9 million $610,419,851 $44,708,644

298 $1 million to $4.9 million $714,874,116 $85,921,502

132 $500,000 to $999,999 $97,818,402 $18,801,390

80 $250,000 to $499,999 $30,645,748 $3,652,579

59 $100,000 to $249,999 $10,622,200 $8,084,255

90 Less than $100,000 $2,717,245 $52,861,750

908 $17,132,820,183 $1,211,803,042

Philanthropic Ecosystems HOUSTON RESOURCES – BY THE

NUMBERS

HOUSTON MSA: TOP 10 FOUNDATIONS BY GIVING

FOUNDATION CONTRIBUTIONS DISCLOSURE

Greater Houston Community Foundation $94,455,749 12/31/2014

Houston Endowment $85,843,061 12/31/2014

Laura and John Arnold Foundation $85,348,365 12/31/2014

ExxonMobil Foundation $75,212,563 12/31/2014

Moody Foundation $65,994,027 12/31/2014

Brown Foundation $63,704,116 06/30/2015

Kinder Foundation $42,650,633 12/31/2014

Robert A. Welch Foundation $29,117,084 08/31/2014

Terry Foundation $20,614,322 12/31/2014

Joe Levit Family Foundation $18,019,667 12/31/2014

Philanthropic Ecosystems

HOUSTON RESOURCES – BY THE NUMBERS

HOUSTON MSA: TOP 10 FOUNDATIONS BY ASSETS

FOUNDATION ASSETS DISCLOSURE

Laura and John Arnold Foundation $1,766,641,213 12/31/2014

Houston Endowment $1,742,374,990 12/31/2014

Moody Foundation $1,547,141,408 12/31/2014

Brown Foundation $1,303,245,651 06/30/2015

Robert A. Welch Foundation $699,916,142 08/31/2014

Greater Houston Community Foundation $523,180,892 12/31/2014

Terry Foundation $365,331,240 12/31/2014

George Foundation $314,058,088 12/31/2014

BHP Billiton Foundation $282,423,901 06/30/2015

Cullen Foundation $281,536,194 12/31/2014

Philanthropic Ecosystems

HOUSTON RESOURCES – BY THE NUMBERS

SOCIETAL ISSUES ADDRESSED

$- $100,000,000 $200,000,000 $300,000,000 $400,000,000

Educat iona Institutions and Related Activities

Public, Societal Benefit Total

Human Services Total

Arts, Culture, and Humanities

Health Total

Religion Related, Spiritual Development

Environment and Animals Total

International, Foreign Affairs, and National Security

Other/Unknown

Philanthropic Ecosystems WHO IS HOUSTON?

NONPROFIT TYPE/REVENUE

Philanthropic Ecosystems WHO IS HOUSTON?

HOUSTON NONPROFIT FACTS

STRUCTURES

DONOR ADVISED FUNDS

• “Charitable savings account” in your name

• Easy to establish

• Gifts are tax deductible, earnings are tax-exempt

• You recommend grants to qualified U.S. charities

• You get the recognition just as with a direct gift

• Ability to name successor advisors

• Low minimum account size

SUPPORTING ORGANIZATIONS

• Subsidiary corporation of sponsor

• Sponsor names majority of board

• Operates much like a private foundation • Donor can select own money manager

• Customized checks and stationery

• Regular board meetings

• Higher minimum amount to start

PRIVATE FOUNDATIONS

• Stand-alone nonprofit corporation or trust

• Fully under family control • Family names all board members

• Good vehicle for creating family legacy of giving

• Status sometimes a consideration

• Operates in many ways like a for-profit entity • Regular board meetings • Accounting and tax filing requirements

• Generally much higher minimums to start

COMPARING THE TOOLS: Tax Exempt Status

DONOR ADVISED FUND

• Component fund of sponsor

• Shares tax exempt status

SUPPORTING ORGANIZATION

• Must apply for exempt status from IRS

• Classified as a public charity

PRIVATE FOUNDATION

• Must apply for exempt status from IRS

• Classified as a private foundation

COMPARING THE TOOLS: Donor Control

DONOR ADVISED FUND

• Donor makes grant recommendations

SUPPORTING ORGANIZATION

• Donor holds significant influence

• Donor appoints minority of board

PRIVATE FOUNDATION

• Donor retains complete control over investments and grantmaking

COMPARING THE TOOLS: Deductions for Cash Gifts

DONOR ADVISED FUND

• Up to 50% of AGI

SUPPORTING ORGANIZATION

• Up to 50% of AGI

PRIVATE FOUNDATION

• Up to 30% of AGI

COMPARING THE TOOLS: Deductions for Appreciated Property

DONOR ADVISED FUND • Full fair market value • Up to 30% of AGI

SUPPORTING ORGANIZATION • Full fair market value • Up to 30% of AGI

PRIVATE FOUNDATION • Fair market value for publicly traded securities • Deduction limited to lower of cost basis or fair market

value for other assets • Up to 20% of AGI

COMPARING THE TOOLS: Tax Issues

DONOR ADVISED FUND • Annual filing: none • Annual tax due: none

SUPPORTING ORGANIZATION • Annual filing: Form 990

• Simpler than Form 990-PF • Generally prepared and filed by sponsor

• Annual tax due: none

PRIVATE FOUNDATION • Annual filing: Form 990-PF, including required schedules • Annual tax due: Excise tax up to 2% of net investment income and

realized net capital gains

NATIONAL CENTER FOR

FAMILY PHILANTHROPY’S

2015 TRENDS STUDY

Results of the First National Bench Survey

of Family Foundations

SMALL WITH GREAT POTENTIAL FOR GROWTH

Foundations created since 1990:

• 78% have less than $10 million in assets

• <3% have assets of more than $200 million

• 60% expect to additional assets in future

NOTE: 40% of family foundations use a DAF

PERPETUITY OR THE LIMITED-LIFE: A CONVERSATION IN FLUX

GEOGRAPHY-BASED GIVING AND/OR ISSUE-BASED GIVING

How organizations organize their giving

HOW BOARDS SPEND THEIR TIME

THE NEXT GEN IS PARTICIPATING!

CHALLENGES FOR NEXT GEN PARTICIPATION

QUICK HIGHLIGHTS: NEXT FOUR YEARS …

Family foundations are considering making changes over the next 4 years:

• 20% will increase payout rate

• 6% will decrease payout

• 12% will expand their mission investing

• 28% plan to make fewer larger grants

• 25% expect a change in leadership

TOOLS FOR TRANSFORMATION

• “New” tools

• Benefit Corporations – double and triple bottom line entities • Impact Investments – leveraging philanthropic capital with more

than grants • Social impact bonds • Advocacy

• New structures often utilize traditional tools as well • Private foundations • Donor Advised funds • Charitable trusts

• Donors increasingly utilizing “portfolio” of tools rather than a single platform

• Factors include philanthropic strategy, asset mix

WHAT IS BEHIND THE TREND TOWARD UTILIZING NEW STRUCTURES?

• Philanthropists increasingly looking to drive

transformational change • Impact, scale, sustainability

• Along with family legacy work, Next Gen involvement

• Increasing recognition that transformation requires: • Capital to innovate

• Advocacy to scale in partnership with public sector, whether with public dollars or modifications to regulatory scheme

• Broad collaboration

• Purely traditional structures often do not provide access to all of the tools such philanthropists want to utilize

Thank You!