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Hope Christian Community Foundation www.hopeccf.org
Hope Christian Community Foundation exists
to serve Mid-South donors and ministries to
facilitate the building of God’s kingdom in
our community and throughout the world.
Our mission is to encourage philanthropy
and increase giving.
1Wednesday, May 23, 12
BOARD OF DIRECTORS MEETINGMAY 24, 2012
Financial Highlights for Fiscal 2012(12 months ended April 30, 2012)
Approval of Budget for Fiscal 2013
Charitable Gift Annuities
Other Matters
Hope Christian Community Foundation www.hopeccf.org2Wednesday, May 23, 12
Hope Christian Community Foundation www.hopeccf.org
FINANCIAL HIGHLIGHTS
3Wednesday, May 23, 12
$0
$20
$40
$60
$80
Millions
3.3
12.46.5
22.3
31.7
49.7
70.7 71.0
52.9
67.4
107.2 107.4
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Total Assets
Assets at April 30,2012 Were $107M,the Same as the Prior Year
Hope Christian Community Foundation www.hopeccf.org4Wednesday, May 23, 12
$0
$50
$100
$150
$200
Millions
8 1529
3847
5773
92
125
156
191213
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Cumulative Grants Thru 04/30/12
Grants Made for the Fiscal 2012 Were $21M Bringing the Total Since Founding to $213M+
Hope Christian Community Foundation www.hopeccf.org5Wednesday, May 23, 12
Hope Christian Community Foundation www.hopeccf.org
Change in Assets for 12 mos. ended 4/30 fy2011 fy2012Assets at Beginning of Fiscal Year $67.4 $107.2New DAFs Opened 32.1 1.6Contributions to DAFs 23.8 24.6Grants from DAFs (29.2) (21.2)Agency fund deposits .9 2.0Agency fund withdrawals (1.5) (.8)Net Investment Earnings 14.1 (6.1)Expenses + other-net (.4) .1Assets at April 30 (in millions) $107.2 $107.4 (DAF = Donor Advised Fund)
$ Millions
6Wednesday, May 23, 12
CHANGE OF ASSETS DURING FISCAL 2012
Thru 04.30.12Assets were unchanged for the yearStock market & other investments negatively impacted assets by $6.1M offset by net cash inflows from gifts received vs. grants paid of $3.4M, new funds opened of $1.6M and net agency fund deposits of $1.2MGifts received total $26.2M, down 0.01% from last yearGrants made were $21.2M, down 27% from last year(due to one large donor which is a business)
Hope Christian Community Foundation www.hopeccf.org7Wednesday, May 23, 12
Hope Asset Allocation at April 30, 2012
Hope Christian Community Foundation www.hopeccf.org
8%10%
46%
37% CASHFixed IncomeEquitiesAlternatives
8Wednesday, May 23, 12
Hope Christian Community Foundation www.hopeccf.org
INCOME STATEMENTFISCAL YEAR ENDED APRIL 30, 2012
9Wednesday, May 23, 12
Hope Christian Community Foundation www.hopeccf.org
12 months ended April 30 (000)
fy 2012 Actual
fy 2012 Budget
fy 2011 Actual
Administrative Fee Income $544 $555 $512
Interest Income 134 132 131
Total Operating Revenue $678 $687 $642
Operating Expenses 507 493 474
Operating Income $172 $194 $168
Contributions 5 0 2
Net Income $176 $194 $170
$ Thousands
10Wednesday, May 23, 12
HIGHLIGHTS OF YTD FISCAL 2012
Income lower than budget due to lower average assets less than estimated
Expenses higher than budget due to cost of IRS audit and compensation expense
Fee income higher than last year due to higher average assets
Expenses higher than last year by $32k due to higher total compensation ($18k or 4.6%), IRS audit($3k), website costs ($4k) and expense of new brochure($9k)
Net income for the year of $176,00 compares with budget of $194,000 and $170,000 last year
Hope Christian Community Foundation www.hopeccf.org11Wednesday, May 23, 12
CASH POSITION
Cash total is $672,000
Operating cash equals $545,000
Hope for Memphis fund cash equals $93,000 total, with obligations of $91,000 for a surplus of $2,000
Including surplus operating cash, Hope for Memphis Fund would be $47,000
Generous Community Initiative fund equals $34,000
Hope Christian Community Foundation www.hopeccf.org12Wednesday, May 23, 12
FINANCIAL OUTLOOK
Hope’s revenue & bottom line is driven by fees on assets and interest rates
Stock market has been very volatile over the last 12 months decreasing 20% for the first 5 months and then increasing by 27% the last 7 months; assets at $107M compare to $92M last September. Volatility seems to have returned recently.
Short term interest rates appear to remain at low levels for the foreseeable future
At current asset levels, monthly income should be in the $15- $20K range
Hope Christian Community Foundation www.hopeccf.org13Wednesday, May 23, 12
Hope Christian Community Foundation www.hopeccf.org
PROPOSED BUDGET FOR FISCAL 2013ENDING APRIL 30, 2013
14Wednesday, May 23, 12
BUDGET ASSUMPTIONS
25 new funds opened
Average assets of about $110 million
Slight decline in interest income as low rates continue
3% salary increases at 01/01/2013
3% increase in health insurance costs
7% decrease in fixed expenses and discretionary expenses: elimination of expenses for new brochure and IRS audit incurred in previous year
Hope Christian Community Foundation www.hopeccf.org15Wednesday, May 23, 12
Hope Christian Community Foundation www.hopeccf.org
Twelve months ended April 30 (000) 2013 Budget 2012 Actual Change
Administrative Fee Income $559 $544 +2.8% due to higher average assets
Interest Income 126 134 low interest rates continue
Total Operating Revenue $685 $678
Total Operating Expenses 507 507
unchanged due to higher compensation & health
insurance by 3% offset by lower audit and brochure
costsOperating Income $178 $172 +3.5%Contributions 0 5Net Income $178 $176
16Wednesday, May 23, 12
Hope Christian Community Foundation www.hopeccf.org
CHARITABLE GIFT ANNUITIES
17Wednesday, May 23, 12
CHARITABLE GIFT ANNUITIES (CGA)
CGA has two components: an fixed annuity payment for the lifetime of the annuitant & a charitable gift.
For a conventional CGA, the charitable gift is designed to be approximately 50% of the cost of the annuity remaining when the annuitant (person receiving annuity) dies
Example: A $100,000 CGA for a 70 year old paying 5.1% is designed too have about $50,000 remaining when that person dies 16 years later (according to mortality table)
Issuer of conventional annuity thus assumes two risks: longevity risk and investment risk
Hope Christian Community Foundation www.hopeccf.org18Wednesday, May 23, 12
HOPE CGA PROGRAM
We propose to issue CGAs and then re-insure them by purchasing a commercial annuity
In the previous example, the cost of a commercial annuity would cost approximately $70,000 leaving a balance of $30,000 immediately available for a charitable gift
We would initially get competitive bids for re-insurance from 3 highly rated companies: Mutual of New York, MetLife or Mutual of Omaha
The charitable gift could go to the donor’s donor advised fund or the church or charity of his choosing
We would receive 5-10% of the charitable gift as a contribution to the Hope for Memphis Fund
Hope Christian Community Foundation www.hopeccf.org19Wednesday, May 23, 12
HOPE CGA PROGRAMAdvantages:
1. Eliminate longevity risk
2. Eliminate investment risk
3. Immediate gift rather than waiting until death
4. Substantially reduce back office costs since insurance company would mail checks and be responsible for tax reporting
Disadvantages:
1. Some people will die earlier than expected
2. The liability for paying the annuity remains a Hope liability in the event the insurer goes out of business
Hope Christian Community Foundation www.hopeccf.org20Wednesday, May 23, 12
HOPE CGA PROGRAM POLICIES
Minimum Age: 65
Minimum annuity amount: $25,000
Reinsurance: All will be reinsured; however, to maximize donor’s charitable deduction, we will tell donor that we may reinsure
Annuity rates offered shall be those set by the AGCA (American Council on Gift Annuities)
Hope Christian Community Foundation www.hopeccf.org21Wednesday, May 23, 12
HOPE CGA PROGRAM STATUS
We have applied to the state of TN to issue annuities; assuming no problems with our application, we expect approval in 2-3 weeks
We will spend approximately $1,300 to get in the business including state application cost and necessary software
In a related move, we will spend approximately $1300 to add a Planned Giving Section to our website designed by Sharpe and Company
We are asking for board approval to move forward with this plan
Hope Christian Community Foundation www.hopeccf.org22Wednesday, May 23, 12
OTHER MATTERS
Hope Christian Community Foundation www.hopeccf.org23Wednesday, May 23, 12
NEXT SCHEDULED BOARD OF DIRECTORS MEETING
September 27, 2012
January 24,2013
Hope Christian Community Foundation www.hopeccf.org24Wednesday, May 23, 12