R.I. Foundation perpetuates cycle of giving

STRONG FOUNDATION: Rhode Island Foundation Chief Financial Officer and Vice President of Finance John Barnett, left, and President and CEO Neil Steinberg. / COURTESY RHODE ISLAND FOUNDATION
STRONG FOUNDATION: Rhode Island Foundation Chief Financial Officer and Vice President of Finance John Barnett, left, and President and CEO Neil Steinberg. / COURTESY RHODE ISLAND FOUNDATION

The Rhode Island Foundation manages its finances to make sure that its capital endowment grows in perpetuity, a key function of its identity as a community foundation.
The proof that it does so effectively, says Neil Steinberg, foundation president and CEO, is in the numbers.
In 2009, during the recession, foundation assets totaled $524 million; in 2013, those assets had grown to $792 million. The endowment, which doesn’t include assets like property, represents the bulk of that 2013 total, he said.
“Our investment and financial-management policies are designed to support our mission, to be a philanthropic and community leader dedicated to meeting the needs of Rhode Island over the long term,” Steinberg said. “This is a privilege, to do what we do. We’re not declaring dividends; we’re all about giving back as much to the Rhode Island community as we can.”
A community foundation is an independent philanthropic institution serving a specific geographic area. Rhode Island’s public charity, like its peers around the country, makes grants to enhance quality of life and manages fundraising from donors, including legacy gifts.
In 2013, the foundation collected more gifts – $43.7 million – than it gave out in grants – $31.1 million to 1,389 recipients. And those grant awards were a record for the organization.
“That increases our endowment even more,” Steinberg said. “We get asked all the time, ‘Why do we still need to raise money?’ Because the community needs more philanthropic capital and the need exceeds that.”
The foundation provides grants in several areas: arts and culture, housing and special programs, health and human services, education, economic security and environment. But priorities include public education, health care, economic development and economic security, Steinberg said. One of the recipients of grant funding year to year is Rhode Island Kids Count, which started as a foundation program in 1995 and two years later incorporated as a nonprofit, said Executive Director Elizabeth Burke Bryant.
The organization, which supports research, policy work and advocacy on children’s health, education, economic well-being and safety, received $125,000 from the foundation in 2014 to support a $1.7 million operating budget. The nonprofit is primarily funded by charitable foundations and donors, Bryant said.
The funding from the foundation helps support the Kids Count Fact Book and the Issue Brief Series, a quarterly publication that focuses on key children’s issues, she added.
“The support has been really important to our ability to do the work that we do,” Bryant said.
At the foundation, sound maximizing of return on investment through diversification and a spending formula averaged out over 16 quarters, or about four years, is achieved through oversight from a board of directors; outside investment consultant, Prime Bucholtz, with offices in Boston, Atlanta, and Portsmouth, N.H.; an investment committee; and Chief Finance Officer John Barnett, who is also vice president of finance.
“This supports our mission to be a philanthropic and community leader to meet the needs of the people of Rhode Island for the long term,” said Steinberg. “We want to preserve the capital to be around and at the same time give out as much as we can.”
The foundation’s spending policy averages between 5 percent and 6.53 percent, which is comparable with its largest New England peers. Between 4 percent and 4.75 percent of that spending is on grants, and another 1 percent or so is associated with operating expenses, Steinberg said. “When we do our fundraising,” he explained, “the dollars all go into philanthropic funds and the long-term endowment. A prudent amount goes out for grants to the community; we take a prudent amount to cover the operations of the foundation, and we strive for a long-term return that in addition grows the endowment. All of this stays in Rhode Island.”
Marie J. Langlois, chairwoman of the eight-member investment committee, guides the group as it sets the asset allocation for investment and other policies. Working with the outside consultant, the panel manages the investment portfolio “to get a reasonable return at a reasonable risk,” said Barnett, who joined the foundation about three months ago.
The return on investment of the endowment in 2013 was 17.7 percent, not including donations, he said.
According to its website, as of June 30, the foundation’s total fund return was 17.2 percent in year one; 13.1 percent in year five; 5.2 percent in year seven and 8 percent in year 10.
“We’re looking to be top quartile investors,” Steinberg added, “but we’re not looking to be at the very top or the bottom. We’re here for the long term.”
Total grant making from 2009 through 2014 was about $146 million, Steinberg said. And the foundation manages 1,371 funds, each with its own story.
“We’re now stewarding money that was left to us almost 100 years ago,” Steinberg said. “We’re 98 years old. The legacy: that’s one of our attractions, for families, individuals and companies: to preserve and promote the philanthropy by family name. It’s here forever.” •

No posts to display