Update from Executive Director
Thank you to our donors who attended our picnic. At just the right moment the rain stopped and the festivities began. It was wonderful to see so many faces we’ve not seen for so long.
As was said at the picnic, the last fiscal year has been strange and wonderful at the same time. Here are a few highlights:
- Passed $5 Million in funds.
- Received a major bequest gift.
- Had the largest donation year ever (even aside from the bequest gift).
- Started new funds: two non-endowed stewardship funds, 1 endowed donor advised fund and 1 endowed scholarship fund.
- Two fiscal sponsorship agreements
- Implemented administrative fees (more about that below.)
- Invested $257,672 in the area (pre-audit estimate) in grants and scholarships
- Increased Quick Response grant request amount to $5,000
The purpose of the picnic is really just to connect with our donors and say how much we appreciate you. Everything we accomplished this past year is because of you. As we start our fiscal year 2022, we are so grateful for you, our friends, partners and donors. Have a great summer, enjoy our area; go catch some fish or pick some berries!
This month is the Homer Foundation’s 30th anniversary. What an amazing 30 years it has been! From very humble beginnings as the first community foundation in Alaska (and one of the few in the nation), we began with $75,000 in funds and have grown to over $5 million. The first year we gave out $1,000 in grants. Last year we gave over $257,672 in grants in scholarships. In fact, as it says on our anniversary logo we have granted out over $3.6 million since we began.
So, for this anniversary year, be on the look out for special events, fund drives and news articles. While we are certainly celebrating the successes of the last 30 years we doing more than that, we are launching into the next 30 years for our communities.
Grace Ridge Brewery
The Homer Foundation is the recipient of all tips for the month of July at Grace Ridge Brewing. Each month the owners, Don & Sherry Stead, generously donate the tip jar proceeds to an area nonprofit. This month it’s the Homer Foundation! Stop by and have a beer, leave a tip and you’ll feel good because you had a great beer and your donation will help make the community a better place! Grace Ridge Brewing is open everyday from 12-8 pm. https://www.graceridgebrewing.com/
As was mentioned above, the Board of Trustees made a major change this past year.
After researching the ways other community foundations raise support and weighing the pros and cons, the Homer Foundation Board of Trustees voted to begin assessing administrative fees on the funds we manage. That includes endowed and non-endowed donor advised, field of interest (including scholarships) and agency funds. Those fees range from 1-1.5%.
For new funds, this change went into effect immediately. For existing funds, we began asking all living fund donors or successor advisors to agree to an amendment to their initial donation agreement effective July 1, 2021 to bring those funds in line with the new Foundation policy.
Why did we make this change? This is a community foundation best practice and boils down to fairness and sustainability. Here are some of the issues the Board of Trustees considered:
- How do we compare? We surveyed similar sized community foundations in the Pacific Northwest region and found that all of them had administrative fees they used to fund operations. Before fees, the day-to-day expenses of the Homer Foundation came primarily from donations for operations. Our peers had a much lower reliance on this type of donation.
- Diversification is strength: The pandemic demonstrated to everyone just how fragile nonprofit finances can be when centered on a single source. Through diversifying our income, we protect the Foundation. Like any business, the Foundation will be less vulnerable if it has several sources of income.
- For good, forever: Fees provide a sustainable, predictable, and scalable income in perpetuity. Like the funds we steward, fees allow the Foundation to continue doing good forever.
- Will the Foundation stop fund raising? No. At this point fees are only a portion of the funding we need to operate. We will continue to rely on the generosity of the community to keep doing our work. Over time, between fee income and growth of our own operational endowment (the Aquila Fund), reliance on donations for operations will decrease even further. As we grow, the Foundation will be able to redirect more fund-raising energies on proactively addressing community needs rather than inward needs like paying operating costs.
- How did we set the fee level? Why the slight variation in the fees assessed? We looked both at the level of effort needed for each fund and what similarly sized organizations assessed for fees. For example, and agency fund fee is 1% and a scholarship fund fee is 1.5%. Administering an agency endowment has only a fraction of the effort compared to a scholarship fund which requires a lot of coordination with many stakeholders.
- When will fees be assessed? July 1st each fund will be assessed annually on the balance of 6/30 before the next year’s ATS (money “Available to Spend” for grants and scholarships) is applied. This will be reflected in the 1st FY quarter report.
- Will this decrease the money available to make grants? That should not be the case. We have a history of investment performance that has generally exceeded the 4% the board has set as the amount available for grants and scholarships. While markets can be up or down quarterly, the Board of Trustees will continue to set the ATS amount based on the 8-quarter rolling average.
To the vast majority of fund donors who have already signed the donation agreement addendums, we say that you for making the Foundation stronger. The Board of Trustees and the staff of the Homer Foundation are committed to using industry-best practices to build strength in the Foundation as we enhance the quality of life for the citizens of the greater Homer area now and in the future.
You have helped make a difference in your community! See how your support has impacted the world around you:
Kenai Peninsula Fair Association
KPFA was awarded $1,300 for their most recent grant project, creating an ADA compliant work space for their staff. This is a great example of a project that can benefit this organization for years to come.
Center for Alaskan Coastal Studies
Was awarded $500 from the Kathy and Roger Herrnsteen Fund as a donor recommended grant. Our donor advisors have the ability to recommend grants from their funds to non-profit organizations with projects that interest them. CACS is looking to develop a new Wynn Nature Visitor Center.
Pier One Theatre
Was awarded $2,500 to run their Summer Youth Theatre Program. It is exciting to note that this project is returning to in-person events this summer. On with the show Pier One!
Philanthropy Fact of the Month
Historically, charitable giving rises about one-third as fast as the stock market.