Community Foundations Forum: Bequests Pt 2


The highly dynamic and energetic Bill Holland spoke to us about the Acorn Foundation in Tauranga in New Zealand.

The foundation was formed in 2002 and has undertaken a fundraising strategy based mainly on bequests. It is one of 11 community foundations set up in New Zealand . People who commit to a bequest are asked to contribute $5000 payable now or out of the estate – an incentive is that if the funds are paid now it is tax deductible. The foundation usually keeps 1% for administration and distributes 5% regardless of the returns each year – which seems to average out. Whatever is left remains in the corpus.

One of the lovely touches they have incorporated into their grantmaking is the use of a card identifying the donor (bequestee) so that people realise that the funds come from people and not just from the foundation, so they receive a little story about the people who have supported them. Bill told the story of Eva Trowbridge, who, along with her sister, moved to New Zealand with their husbands. Both couples had no children and Eva was the last survivor of the four. Eva left money to the Acorn Foundation in her will, partly to support a student studying health sciences – to prevent children from having to go to the hospital where she worked for most of her life. Eva left $600,000 – and had been a cleaner at the hospital, reiterating the point that you don’t have to be rich to be generous.

The benefits of bequests through community foundations are that capital can be left intact, the annual income is distributed in perpetuity, donors can direct where the funds are to go, and it creates a passive income stream for the recipient organisations. In nine years the Acorn Foundation now has 165 named funds (most set up through bequests), partly through talking to Rotary, Probus Clubs, solicitors and investment advisers. They set up 30 new funds each year and this year distributed $350,000 from their funds under management of $7 million. Note that this is funds currently available from realized bequests – so when all of the 165 named funds donors pass on they estimate that their corpus will grow to something like $100 million.

All of the community foundations at the forum were quite impressed with these figures which are high in comparison to most of the community foundations here (with the notable exceptions of the Australian Communities Foundation, Lord Mayor’s Charitable Foundation and the Geelong Community Foundation).

Bill’s enthusiasm for the work of their foundation was infectious (and exhausting – many of us asked where he gets all his energy from). It was great that he came across from NZ to talk to us here about how they have developed the Acorn Foundation (even though of course the tax structures there are different to ours and they seemed to have less impediments as to whom they can distribute funds to). Thank you Bill for sharing!

What do you think of this strategy for a foundation or charitable organisation? Can focussing on one donor development stream be the best way forward?

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About ozphilanthropy

#Philanthropy. Posts by Sharon Nathani. Consultant, blogger, speaker & committee member/grantmaker @Impact100Melb. Sometime pianist & knitter. Learning more to share with you in philanthropy studies @acpns_qutozphilanthropy through Masters in Business in Philanthropy and Not for Profit Studies. Former Executive Officer Inner North Community Foundation.
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