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The Art of Giving

Creating a thing of beautyThe artist’s work springs from passion. The colors, the lines, the texture – all are attemptsto convey the artist’s feeling for the subject. Like the making of art, philanthropy emergesfrom passion. Donors have a feeling about the charity; something in the subject oremphasis of the charity connects deeply with them. So in giving, the donor gives shapeto this passion.

These expressions of passion take on added significance as we age. Older people lookback on their lives to make meaning, and they look forward in anticipation of their legacy.They desire to fashion something of value. Philanthropy, in this respect, is a creative act.It’s a way for people to make their mark, to use their resources to develop somethingbeautiful and lasting. It’s the Art of Giving.

The purpose of the American Baptist Homes Foundation of the West is to assist donors increating a thing of beauty – an endowment that helps older people enjoy life to its fullest.The Foundation exists to benefit the residents of American Baptist Homes of the West andits affiliated retirement communities. Through a variety of planned giving and charitableprograms, the Foundation enriches the lives of those who give and those who receive.

This report, a first for the Foundation, springs from a passion for our mission. Here wesignal significant changes underway in the Foundation. In large part, these changes are a return to the basic practices of fund development, which is essentially about buildingrelationships to make a difference. At the same time, the Foundation is envisioninggrowth and exploring new ways of fulfilling the mission.

You’ll read here about how the Foundation is artfully managed today: with spirit, focus,and generative connections at the local level. And you’ll learn how the passions of donorshave been formative in the Foundation’s history.

Finally, the report is a way for the Foundation to express its thanks – to recognize thosedonors who are making something beautiful and inspiring others through the Art of Giving.

Joe AndersonSenior Vice President

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A Message from the Chairman and President

Envisioning the future

Frank JenningsChairman of the Board

David B. FergusonPresident

In February 2006, a change in leadership of the Foundation was instituted by AmericanBaptist Homes of the West (ABHOW), the sole member of the Foundation’s corporation.The change included a new board of directors as well as the addition of a new seniormanager to the Foundation’s full-time staff: Joe Anderson, formerly president ofABHOW consulting and management subsidiary Seniority, Inc.

The change was an intentional step to strengthen the Foundation’s marketing and to more aggressively grow its assets, which today total $45,679,461. The board hascommitted to a strategic direction rooted in the Foundation’s vision: “The Foundationwill provide financial support and security for residents in all communities ownedor managed by ABHOW and its affiliates. It will accomplish this by building itsunrestricted funds, increasing its community-specific funds and through fund raising from third-party sources.”

To achieve this vision, the board asked the Foundation staff to fully assess currentfund-raising practices and the financial planning needs of ABHOW residents. Thatevaluation revealed great opportunities to grow the Foundation’s assets through thebasic disciplines of fund development: build awareness, gain trust, ask for support, anddeliver the promise. Furthermore, the board broadened its thinking to envision aFoundation with a vibrant future. So our board focus in 2006 began to shift from howto spend funds already raised to seeking new and creative ways to expand fund raising.

We are making significant progress. Recognizing the passion that residents andemployees have for philanthropic engagement, we are establishing Local FoundationCommittees in each continuing care retirement community. The committees involveresidents, staff and local board members in fund raising. They grow the endowmentby focusing on special projects that have been identified by residents. During 2006,these local committees were deeply involved in a challenge grant offered by ABHOW,raising $605,612 to match ABHOW’s contribution.

We are excited about the growth this next year will bring. And we are confident thatthe change underway will enable the Foundation to fulfill its mission: “To enhancethe lives of residents in market-rate communities through the growth of unrestrictedfunds and program-specific fund raising at the community level. And to enhancethe lives of residents in affordable housing communities through direct grants and fund raising.”

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History of the Foundation

38 years in the makingSome works of art take time to emerge. Ansel Adams would wait for hours to getjust the right light for a single photograph. Michelangelo spent four years paintingthe ceiling of the Sistine Chapel. The Foundation’s own work has been 38 yearsin the making.

In 1968, the Foundation was established with a gift of $50,000 from Mr. andMrs. Edwin Uhl. They provided this gift in honor of a friend who had receivedloving care at Grand Lake Gardens in Oakland, Calif. A corporation was formedwith its own board of directors, and the Foundation was charged with receivinggifts and managing the investment funds of American Baptist Homes of the West.From a single gift, the Foundation has grown to provide assistance to many ABHOWresidents who have outlived their financial resources.

The Foundation’s reach was expanded through memorial gifts. For example, the Bottemiller Endowment Fund for Retired Ministers, established in 1992 by an initial gift of $100,000 in honor of ABHOW’s first president, Harold E.Bottemiller, provides financial assistance to retired ministers and missionaries.More recently, the Foster Family Education Fund was established at The Terracesof Los Gatos, in Los Gatos, Calif., to provide financial assistance to ABHOWemployees who wish to further their education in geriatric studies or desire to improve their English language skills.

Over the years, special funds have been established that enhance resident pro-gramming, provide large print books, subsidize resident transportation, andeven underwrite weekly ice cream treats. Large or small funds not only servetoday’s residents but also signify appreciation for those residents who madethese contributions.

In 1996, ABHOW established two funds to extend its mission: the SocialResponsibility Fund was set up to support special projects or programs in thesurrounding community served by an ABHOW-affiliated community; and theAffordable Housing Assistance Grant Fund was established to provide quality-of-life amenities for residents of ABHOW communities. The latter fund has

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been supplemented over the past decade through the annual ABHOW FoundationGolf Classic. These funds have been used to pay for lunch and activity programs,exercise equipment, and paratransit buses equipped with wheelchair lifts.

A combination of gifts and investment growth helped the Foundation reach sig-nificant milestones: in 1980, assets climbed to $1 million; in 1989, assets werejust under $11 million; and by 2000, the funds surpassed the $50 million mark.Today, the assets total $45,679,461.

Personal Relationships, Local Emphasis

Since its inception, the Foundation has grown its CCRC endowment funds by establishing personal relationships with donors. It’s a mutually beneficialproposition, as residents maximize their assets while providing a legacy to theircommunities. Some options for donors include:

• Charitable Gift Annuities, which provide income for the donors and, upon their death, a gift to the Foundation;

• Charitable Remainder Unitrusts, which pay a fixed return and are revalued each year;

• Charitable Remainder Annuity Trusts, which provide a fixed return that is not revalued;

• Bequests of gifts, stock, cash or property as defined in a will or living trust; and

• Memorial gifts given in honor of others and usually held in the endowment fund of the retirement community.

The work of the Foundation is like making art – creating gifts that endure. It’salso a work in progress that requires disciplined management day in and day out.Through the cultivation of personal relationships and the focus on local impact,the Foundation honors its past and creates its future.

Left photo on opposite page: The quality services of Grand Lake Gardens, shown here in a 1965 sketch,inspired the first gift to the Foundation. Center photo on this page: Dr. William Bowman served as vicepresident of the Foundation in its formative years.

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CCRC Endowments

Benefiting local communitiesSince 1968, the Foundation has been the recipient of many endowment andmemorial gifts that benefit ABHOW’s continuing care retirement communities.Gifts from residents are held in the name of their community unless otherwisespecified by the donor. The Foundation returns a portion of the earningsmonthly to each community to help offset the cost of benevolent care or to provide for residents who have outlived their financial resources.

Additions include new donations and assets transferred from matured trusts.Distributions are funds returned monthly to the community from the Foundation.Other changes include realized and unrealized investment income less Foundation expense.

Pilgrim Haven $1,937,176 $11,865 $-68,400 $122,271 $2,002,911Grand Lake Gardens 691,523 35,402 -23,088 43,938 747,775San Joaquin Gardens 3,150,647 192,763 -104,624 201,380 3,440,166Piedmont Gardens 5,820,375 95,991 -208,840 367,538 6,075,064Rosewood 1,452,952 90,232 -52,487 92,202 1,582,900Valle Verde 9,036,530 223,944 -316,757 572,206 9,515,924Plymouth Village 4,185,247 307,713 -147,161 269,395 4,615,194Judson Park 1,405,079 160,625 -51,110 91,694 1,606,289The Terraces of Phoenix 844,383 33,145 -30,168 55,505 902,865The Terraces of Los Gatos 507,425 280,402 -18,426 33,172 802,573Total $29,031,337 $1,432,082 -$1,021,061 $1,849,301 $31,291,661

Community Additions Distributions Other changes Sept. 30, 2006

Left photo on this page: The art of Barbara Bishop, a resident of Piedmont Gardens in Oakland, Calif., is made with zippers. Right photo on this page: Jean Bonner is another Piedmont Gardens artist. Rightphoto on opposite page: Edythe Campodonico leads an art group at Piedmont Gardens and makes surethe work of fellow artists is displayed throughout the community.

Beginning balance

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Local Committees

Community-based fund-raising committees were officially adopted by both theFoundation and ABHOW Boards of Directors during the fiscal year. This formalizedthe local groups that were created to increase contributions to the endowments aswell as to identify and raise funds for special projects specific to the communities.

During 2006, the following residents, board members, community and staffmembers served on the local committees:

Grand Lake Gardens Development CommitteeCo-Chairs: Dr. Rosa James & John Taylor; Members: Adnan Hasan, Myrtle Pelle, Heath Wagener,Margaret Weitkamp, Betty Will, Harrison Williams

Judson Park Resident FoundationChair: Gertrude Pfeffer; Members: Russ Akiyama, Gladys Flotten, Wynnie Hunt, Frank Jennings,Karen Keiser, Natalie McCann, Harriett Oyen, Bill Painter, Virgil Staiger, Jimmy Walker

Pilgrim Haven Resident FoundationChair: Miriam Bjornson; Members: Will Corkern, Joan Frietas, Karen Jenney, Roy Kuramoto, TerryMorrison, Doris Pryor, Rowena Ramires, Jane Reed, Marilyn Sell

Plymouth Village Development Task ForceChair: Dick Rosenquist; Members: Cheryl Hines, Jim Hogg, Lloyd Howard, Keith Kasin, Rita Lee,John Serbein, Vi Wiant

Rosewood FoundationChair: Gary Bashor; Members: Ken Aitken, Ted Burgess, Beryl Corrie, Pat Griffin, Danielle Hillard-Adams, Gloria Marshall, Penny Marshall, Marie Meyers, Joe Thomas

San Joaquin Gardens FoundationChair: Tory Sherman; Members: Mike Buettner, Robin Bushell, Janet Gremminger, HaroldHansen, Cleo Hastings, Ray Hayworth, Nancy Jen, Betsy MacCracken, Harley Sowell, Keli Swales,Rebecca Williams

The Terraces of Los Gatos Resident FoundationChair: Britt Saterlee; Members: Lamar Allen, Pam Bancroft, Cynthia Biasca, Alex Candalla, HelenBrazil, Janet Engle, George Fullmer, Madelyn Furze, Kern Hamilton, Dorothy Miller, Karl Mueller

The Terraces of Phoenix FoundationChair: Ralph Elsner; Members: Lou Binick, Ann Campbell, Leon Gean, Dick Kopp, SabinLevenson, Arlene Miller, Betty Pottroff, Andrea Schulte, Dario Travaini, Ron Wilson, Linda Zale

Valle Verde Endowment & Development CommitteeChair: Ron Schaefer; Members: Dorothy Burkhart, John Cotton, John Mandle, Sally Mandle, RonMcConnell, Dr. Fran Preston, Sue Watkins

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Enhancing residents livesThe residents of ABHOW’s affordable housing communities are all the recipientsof benevolent care. They have qualified as residents because they lack the incometo pay for market-rate rent. Many residents waited a long time for such affordablehousing, and while they waited they had to make impossible choices after payingthe rent – deciding whether to spend what’s left on food, clothing and medicine.

ABHOW strives to ensure that its residents never face such a predicament. Theaffordable housing communities provide government-subsidized apartmentswhere residents pay no more than 30 percent of their income toward rent. Toqualify for a subsidy, residents must earn no more than 50 to 80 percent of anarea’s median income. ABHOW augments this housing with supportive servicesand amenities that enhance the security, independence and well-being of residents.

That’s where the Foundation comes in. The Foundation manages the ABHOWAffordable Housing Assistance Grant Fund, which supplies money for such itemsas paratransit buses, sound systems for the hearing impaired, kitchen equipment,security fence and video monitoring equipment, activity programs, and indoor andoutdoor furniture. It can’t be said enough what a difference these added servicesand amenities make in the lives of residents. A new program or new piece ofequipment makes community living all the more special for residents.

The primary fund-raiser for the Affordable Housing Assistance Grant Fund is the annual ABHOW Foundation Golf Classic. Since 1997, this full day of fun andfellowship has raised hundreds of thousands of dollars to benefit ABHOW residents.The October 2005 tournament, held at Round Hill Country Club in Alamo, Calif.,netted more than $93,000. Thanks to the generosity of sponsors, auction donorsand golfers, ABHOW is able to ensure that residents enjoy a life, not just a place to live.

Affordable Housing

‘

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Annual Golf Tournament Net Revenue

The Art of Cherished Memories

In 2006, a generous donor stepped up to meet the needs of Judson Terrace andJudson Terrace Lodge residents in San Luis Obispo, Calif. The caring donor wasMrs. Kay Kallander, ABHOW’s senior vice president for strategic planning.

At these two affordable senior housing communities, a day spa is a wonderful wayto relax and regenerate. The spa illustrates how a single gift can bring continuingenjoyment and benefits to residents who would otherwise be unable to afford sucha luxury. The Foundation works to make such gifts useful to the community andin keeping with the wishes of the donor.

The construction financing of affordable housing leaves scant funds for residentamenities. As a primary source of funding for community enhancements, theFoundation always has a longer list of projects to fund than it has funds available.At each board meeting, directors and staff weigh every project and make grantsaccording to need.

2004 2005200320022001

$79,541 $93,240$71,723$84,610$78,790

0

20,000

40,000

60,000

80,000

$100,000

Left photo on opposite page: Anna Edwards, a resident of Broadmoor Plaza in San Leandro, Calif., showsher paintings in the Bay Area and beyond. Left photo on this page: Residents of Judson Terrace Lodge inSan Luis Obispo, Calif., have a new spa room, thanks to the generosity of a donor. Center photo on thispage: The 2005 ABHOW Foundation Golf Classic drew 130 golfers, including (from left) George Elliott,Fred Ficklin, Reginald Lyles and John Harrison.

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Financial Report

American Baptist Homes Foundation of the West has enjoyed continuing growth through contributionsfrom donors as well as prudent investment policy.

CCRC Distributions

Each month the Foundation provides revenue to theABHOW continuing care retirement communities.Each community receives funds as a percentage of its endowment account. These funds are designed to provide benevolent care for residents who have outlived their financial resources. For more than adecade, the Foundation has distributed over $1 millionper year in such funds. The current return rate is 4 percent based on a 12-quarter rolling average.

Year-End Appeal

At the end of each calendar year the Foundation conducts its Year-End Appeal. This campaign isdesigned to remind residents that they can combinetheir tax planning with charitable giving through the Foundation.

Investments

The Foundation board adheres to the investment policy of ABHOW and its affiliates in the investment ofboth managed funds and net assets. The PRIME Consulting Group of UBS provides outside investmentadvice and oversight of specific investment fund managers.

0

30,000

60,000

90,000

120,000

$ 150,000

2004 2005200320022001

$94,337 $138,595$92,270$13,440$64,667

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Balance Sheet

Assets Sept. 30, 2006 Sept. 30, 2005Cash $586,462 754,811Marketable securities 33,703,977 31,965,349Accounts receivable, net 141,496 26,849Notes and other receivables 46,362 71,536Prepaids expense and deposits 17,877 13,210

Total current assets $34,496,174 $32,831,755Restricted cash 781,809 420,950Marketable securities 10,459,390 9,649,214Intercompany – due (to) / from (57,912) 73,446

Total long-term assets $11,183,287 $10,143,610Total assets $45,679,461 $42,975,365

Liabilities and Net AssetsAccounts payable and other accrued expenses 7,744 7,524Accrued payroll-related liabilities 29,637 16,437Other current liabilities 118,431 57,693

Total current liabilities $155,812 $81,654Revocable trusts 1,913,990 1,495,130Obligations under Annuity Agreements 2,945,897 3,220,125Total liabilities $5,015,699 $4,796,909

Net AssetsUnrestricted net assets 32,165,871 29,551,685Changes in unrestricted net assets 2,400,134 2,614,186

Total unrestricted net assets $34,566,005 $32,165,871Temporary restricted net assets 5,731,104 5,618,836Changes in temporary restricted net assets 73,888 112,268

Total temporary restricted net assets $5,804,992 $5,731,104Permanently restricted net assets 281,481 274,150Changes in permanently restricted net assets 11,284 7,331

Total permanently restricted net assets $292,765 $281,481Total net assets $40,663,762 $38,178,456Total liabilities and net assets $45,679,461 $42,975,365

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2006 Donors

Mere words cannot convey the gratitude of the Foundation board and staff for the financial support receivedthis year. Some donors prefer anonymity, so to them we issue a general “Thank You” for their many gifts.We wish to recognize publicly the following philanthropists who have included the Foundation in their charity:

Over $100,000

Helen Gjullin

$50,001 - $100,000

AnonymousDoris SpoorZola Sweany

$10,001 - $50,000

Galen & Gloria AdamHelena AllenAuxiliary of The Terraces of Los GatosFrank & Cynthia BiascaDorothy DavisGreystone Communities, Inc.J. Kern HamiltonJudson Park Resident CouncilWalter & Rosemarie KrovozaJ. Marie MyersCraney & Tamaki OgataIsabelle PhillipsPlymouth Village ResidentsAssociationItsuo & Marian UenakaJimmy & Margaret Walker

$2,001 - $10,000

Joe & Cherrie AndersonBasha’s GalleryHelen BrazilErnest & Berry CampbellWalter CarlsonJohn & Pam Claassen

Marion ClarkJames & Ann EastmanKarin EckelmeyerDavid & Debbie FergusonHelen FogleFresno Sunrise RotaryJean GeyerBryon & Patricia GilbertGlynnDevinsCatherine GuntherHansen, Hunter & Company, P.C.Ned HarnishRachel HaynesDan HermannJames & Suzanne HigginsAlice HutchinsDrs. Gillette & Rosa JamesA.W. & Jean JessupArthur & Phyllis JingRon & Kay KallanderH.J. & R.J. KeheING Investment ManagersIrwin.Pancake ArchitectsMarion KirkJoseph & Janet KrovozaRosemarie KrovozaLa Tienda De Valle VerdeCandice LapaElva LaPlanteAllison LevyHerb LinvilleLocktonBetsy MacCracken

Robert & Katsuko MatsumotoAlice MillerMary MohorovichMarguerite MorrisonJames E. Roberts-ObayashiCorporationLinda PfafmanNeil & Charles PfafmanBritton & Janet SaterleeCaroline SchuilingSodexho Senior ServicesAnna St. JohnConway & Marjorie SnyderZiegler Capital Markets Group

$501 - $2,000

Susan AckermanAera Energy LLCRussell & Joyce AkiyamaJames & Margie AllenCarolyn AlstromOrville ArmstrongBenjamin BakkegardFrances BannermanErnest BarnesBetty Jean BatteyRobert BeckerJean BellOlive BennettDale & Lawanna BethellLouis & Yoshiko BinickB.P. BlasingameEdward & Barbara Boldt

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2006 Donors continued

$501 - $2,000 (continued)

Alma BookerKatherine BowenAda Marie BowersPauline BridenbaughDavid BrockDan BrodovskyBroward BrothersRichard & Ellen BrownKay BrownleeTim BuckleyRuth BunemanDorothy BurkhartRobin BushellMary CampbellMarguerite CarpenterDorwin & Barbara CartwrightChester CastilloVirginia CechmanekRoxanne ChaseChristian Community CreditUnionArthur C. Christman, Jr.Helen ChuanMarian ChuanNick & Ruth CiolliMartha ClydeIdaleen ConklinBeverly CooperJohn CottonBob & Joan CrandallAlbert CunninghamEllen CunninghamDavid Sons ConstructionDeloitteRobert & Dorothy DallyEileen DavisJanet DavisConstance Dempsey

Annie & Robert DenisonBarbara DewolfeJohn & Barbara DoddsMildred DouglassRev. Lawrence DoyleTerry DuryeaMargaret DuryeaDouglas EadieTerese FarkasHilda FarrellMillie FernaldMargaret FinchFrank & Pam FinneyKenneth FosterFrank Freiberger, Jr.Anne FreidellGerald & Miriam FreidlandJoan FreitasLinda FrommTomoye June FujitaGeorge FullmerCharles & Bettye Jo FurbyJohn GarabedianLeon & Beth GeanHenrietta GeibGeodyne Energy IncomeProgramsMel GoldsteinMilton & Barbara GouldDavid & Nancy GrantMadieu HackettArthur & Kathryn HalenbeckEugene & Rena HamburgerLorraine HansenHarold & Harriett HansonRick HardingRuth Harnish HansenAdnan HasanCleo Hastings

Ray & Edith HayworthHarriet HeebinkRuth & James HoggBetty Hogue WillRichard & Jean HooverLloyd HowardWynnie HuntVirginia HunterFrederick & Dorothy IrwinIt’s PrintingRowena JacksonArnold JacobsIvory & Doreen JamesJean Hammond & MichaelKrasnerFrank & Sandra JenningsPaul JepsonDonald JonesNorman JungersHoward & June KambachKeith KasinEva KasparianSascha KaufmannMr. & Mrs. Benjamin KehEdgar & Selma KellerC. Imogene KnightJohn KrovozaJeffrey & Susan KrutzschMark & Charline KuntzRoy & Amy KuramotoForest & Margaret LaneAlmus & Carol LarsenLaSalle BankMonagene LawrenceBruce LaycookMary Lou LayneRobert & Edith LefeberRobert & Chieko LefeberFlorence Lightfoot

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$501 - $2,000 (continued)

Daroly LloydDoug & Linda LoorzRobert & Ethel LoweJohn & Ruth LylesReggie LylesJ.B. & S.B. MandleRobert & Lois MillerEdwina MindheimNelle MinnickEdwin & Johndalene MitchellClarence & Helen MortensenR. Ian & Ann Robinson MurrayColbert & Winifred NakataGeorgiana NammackJean NelsonDonald & Janet O’DowdOlive Drive ChurchJohn & Evelyn OliverThomas & Rita OsborneHarriett OyenVelma PattersonDorcas PattersonDon & Margaret PedarekBill & Helen PerryGeorge & Janet PflegerE. Anne PidgeonAlice Jean PowerFrancis PrestonRobert Price

Ruth Priest Rowena RamiresAllen & Mildred RasmussenDavid ReiderJane RieffelPauline & John RiparettiF. Robert SteigerCharles & Virginia RobinsonJohn & Sue RoderickAncel & Florian RomeroRosewood Resident CouncilRichard & Mary JeanneRosenquistNora Ross AdamsBeatrin SalvesonRuth SchnellerRichard SchreiberD.A. & L.E. SeaseMuriel SelfSignal HillSiteMasonLemoin & Melba SkilesNotia SmithSidney SmithJane SmithCharlene SnowDavid & Julie SonsWilliam SpanglerRandall & Connie StamperHarold StanleyElizabeth Stevens

Beatrice StinsonKeli SwalesJohn TaylorDorothy ThogmartinRichard & Lois ThomasLeonard & Jean ThompsonHerman ThorntonLaurel ThorntonPhyllis TidymanTodd & Associates, Inc.Edward TruswellMarcia VaileJohn Van AkenAnnette Van WyheErnie & Myra ViauPolly VictorBoyd & Maxine WalkerHazel WallRollo & Esie WeeksMargaret WeitkampJoyce WestLarry LandryMax & Violet WiantJohn & Jeanette WrightSteve & Nancy WuitschickAgneeta WyseJohn & Shirlie YatesLois YoungMatthew & Linda Zale

More than 500 individuals or businesses made contributions of up to $500 in 2006. There is not enoughspace to list them all, so the Foundation offers its most sincere thanks to these donors.

2006 Donors continued

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Board Members

Board and Staff

Frank JenningsBoard Chair

Stephen Elliott Paul Ray

Enitan Adesanya

Joe AndersonSenior Vice President

David B. FergusonPresident

Leonard KellyVice President

Suzette FlyntDevelopment Coordinator

Foundation Staff

AmericanBaptistHomesFoundationof theWest

6120StoneridgeMallRoad,Suite 300Pleasanton,CA94588800.222.2469 ext.7151

www.abhow.com/foundation