Guide to Philanthropy 2016-17

A guide to

A g u i d e to

Philanthropy at h a r k e r 2016-17

Giving

Message from the Head of School The Harker School’s mission is to bring out the best in our students – in academic, extracurricular and personal domains – so that they can make a positive difference in the world.

Learning and doing to make a difference.

Daily I find inspiration in our students, who want to learn deeply and apply their learning to the world around them. Every year I am also heartened to see our Harker community come together with philanthropic support that enables students to do just that. The combined efforts of our donors each year offer our students more robust opportunities inside and outside of the classroom, and in the long term philanthropy also provides improved facilities and organizational stability for years to come.

Harker is an independent private school. This means that Harker does not receive funds from government, religious or other organizations. We must raise all funds for operations and capital improvements through tuition and fees, annual charitable contributions, and capital contributions.

As an independent school, Harker follows the Independent School Financial Model. Independent schools depend on charitable giving to provide enhancements to student programs. At Harker, the annual enhancements – our Margin of Excellence – are funded by annual giving (see page 4).

While gifts to the annual giving campaign support the school’s annual operations and fund educational enhancements for the children every day, capital and endowment gifts have a long-term benefit. All of these types of gifts are necessary to sustain Harker’s educational excellence into the future.

Earlier this year we began construction of a new gym and theater on our Saratoga campus.

This is an exciting milestone in the history of our school, and we are excited that we will be able to provide our students with excellent facilities commensurate with their abilities and potential.

However it is important to note that our work is not yet done raising funds for the gym and theater. I am sincerely thankful to those families who have participated in this school-wide effort, and I encourage those who haven’t had a chance to do so yet to join the community with their support.

There are many different ways to support The Harker School with your philanthropy. Thank you for taking the time to learn about the various charitable options available.

Sincerely, Christopher Nikoloff Head of School

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Frequently Unasked Questions Harker has a continued tradition of charitable giving, and these gifts help to create the best possible learning environment for our students. Every aspect of the school is touched by annual giving, including academics, the library, technology, the arts, athletics, and other student activities.

It is our philosophy that all members of our school community should support annual giving at a level that is appropriate for their situations; most importantly, we want our donors to feel good about their contributions.

Parents often come to Harker with very different views of and experiences with philanthropy, and many have questions. To help provide a better understanding of Harker’s philanthropic philosophy, we provide this list of frequently unasked questions, featuring topics you may have questions about but may be uncomfortable asking.

Why does Harker have the annual giving campaign?

Harker, like all independent schools, relies on income beyond tuition to fully support its students and programs. Gifts to annual giving are used in the year in which they are received, and so Harker depends on these donations to support current student programs each year. In fact, making a gift to annual giving has the most direct and immediate impact of any type of gift to the school.

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Why doesn’t Harker operate like other businesses and charge the full cost instead of asking for donations each year?

The tuition that would be necessary to fund our current level of education would restrict the number and type of families who could afford to attend. This would limit enrollment which, in turn, could mean a cutback in programs and opportunities for students.

In addition, a for-profit business can cut costs through consolidation and streamlining. To employ these strategies at Harker would mean reducing staff or combining classrooms, making us unable to provide the individual attention and quality of education that everyone wants and expects for Harker students.

Finally, a gift to annual giving is tax-deductible. Tuition is not.

What if I don’t like something at Harker and feel the only way to be heard is to withhold support from annual giving?

We ask that you please contact the person involved or a school administrator. Please do not jeopardize the students’ educational experience to make your point, but instead handle it directly and appropriately. Harker encourages open discussion and strives to communicate effectively with all members of the school community.

Does annual giving pay for faculty and staff children’s tuition remission at Harker?

No, annual giving is not used for this purpose. However, it is important to note that, as in most independent schools, faculty and staff do receive tuition remission as an employee benefit. This initiative has been critical in helping us to retain high quality teachers and staff members in a geographic location where other industries often pay far more. Attracting and retaining the highest quality faculty and staff is one of the most important and desirable features for parents, and tuition remission has proven to be one of the most effective techniques towards achieving this goal. In addition, having their own children within the community makes faculty and staff more personally invested in building a vibrant and cohesive school environment.

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Ways to Give Outright Gift You may make a gift online using a credit card or via ACH (electronic check). Simply go to www. harker.org/onlinegiving. Or you may complete the annual giving pledge envelope (included in this brochure), and do one of the following: enclose a check*; provide your credit card information; make a pledge of a specific amount and pay it before May 31, 2017. * When you provide a check as payment, you authorize us to either use the information from your check to make a one-time electronic funds transfer from your account or to process the payment as a check transaction.

Gifts of Securities Transfer stock by mailing or faxing your completed Transfer of Securities form. Download the form at www.harker.org/onlinegiving.

In-Kind Gifts of Tangible Personal Property Download the in-kind gift proposal form at www.harker.org/onlinegiving. You may then submit the form to the in-kind gift acceptance committee for review. Once it is determined that we can accept the gift, we can make arrangements to receive the property and provide you with a letter of tax deductibility.

Matching Gift Many gifts to The Harker School also qualify for corporate matches. Please check with your employer on matching gift policies. Most companies with matching gift policies handle the process online. Check with your human resources department for specifics.

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Planning Your Gift Annual Gifts Each family is asked first to make a gift every year to the annual giving campaign. The greatest percentage of each dollar donated via the annual giving campaign goes to student programs.

After a family has made their primary gift to the annual giving campaign, our annual Family & Alumni Picnic and our Golf Classic provide fun and entertainment to participants while generating funds for the endowment. Everyone is welcome to join the fun and participate.

Periodic Gifts Each family will be asked to make a gift to our capital campaign at some point during their time at Harker, and that time is now. We are continuing this year to raise funds to complete construction of a gym and theater on our Saratoga campus.

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Deciding How Much to Give We ask Harker families to contribute to annual giving at a level appropriate to their financial situations, to the best of their ability to do so. Since each family has a unique financial situation, the fairest way to achieve the funding needed for the Margin of Excellence is to have all families participate by giving a similar percentage of their annual incomes; families with higher annual incomes may be able to contribute more money than families with lower annual incomes. This way each gift, no matter how big or small, is meaningful and matches a donor’s capability to give.

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Annual Giving Gift Clubs Each year we recognize donors in our online Annual Report, according to these gift clubs: Leadership Circle

Gifts of $25,000 and above

Ambassadors’ Circle

Eagles’ Circle

Gifts of $10,000-$24,999

Trustees’ Circle

Gifts of $7,500-$9,999

Alumni Leaders Gifts greater than Pacesetter amount

Benefactors’ Circle

Gifts of $5,000-$7,499

Head of School Circle Gifts of $2,500-$4,999 Graduates’ Circle

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Gifts of $2,016 (families of graduating seniors)

Gifts of $1,000 and above

Alumni Pacesetters

Gifts of $5 per number of years since graduation (e.g., $5 x 5 years = $25)

Friends

Gifts up to $999

Designating Your Gift Unrestricted Gifts Unrestricted gifts to the annual giving campaign are most appreciated by the school because these gifts provide us with the opportunity to fund the approved items requested by the faculty for their programs.

Designated Gifts* You can also designate your contribution to one of the following programs: Athletic Boosters

Friends of Debate

Financial Aid

Patrons of the Arts

Friends of Robotics

Business and Enterpreneurship

Friends of the Library

Friends of Journalism

Memorial or Honorary Gifts Pay special tribute to a family member, friend, colleague or group by making either a restricted or unrestricted gift in memory or in honor of someone. * If your gift is designated, please specify on your check, when giving online, or when transferring securities to which program you would like your support designated.

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Planning Your Philanthropy 2016-17 Annual Giving Campaign Sept. 25 - Oct. 1, 2016 Annual giving is the school’s main effort to raise money for student programs (such as athletics, the arts, technology, library, and much more); it funds our immediate needs as requested by teachers, department heads and the administration.

Our phoneathon takes place the week of Sept. 25 this year, but you don’t have to wait for a phone call.

You can go ahead and make your gift online or use the envelope provided.

All gifts are fully tax deductible and directly support the Margin of Excellence extras that enrich the overall student experience. We ask that you make your first and primary gift each year to annual giving to support the Margin of Excellence.

Capital contributions support the purchase, construction and upgrading of buildings and facilities to meet student needs. Usually gifts made for this purpose are multi-year pledges spread over a three- to five-year period. Like annual giving gifts to Harker, capital gifts are tax deductible.

We are not yet finished raising the funds to construct the gym and theater complex on our Saratoga campus, and we will be reaching out to new families and families who haven’t pledged yet to take part. Families with multi-year pledges expiring in December 2016 will be asked to renew their pledges for another three years.

See the Harker website for information about tax deductibility of gifts.

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Event Giving Family & Alumni Picnic Sun., Oct. 9, 2016 Join us for Harker’s 66th annual Family & Alumni Picnic! The entire Harker community gathers together each fall to kick off the beginning of the new school year. More than a “picnic,” the event includes games and prizes galore, great food, fantastic student entertainment, our ever-popular silent auction, fun-filled themed activities and more! For how to get involved, see page 15.

Golf Classic Sat., Mar. 4, 2017 Harker’s annual Golf Classic is a great way to enjoy an afternoon of golf while supporting the school’s endowment. This year the event will take place at the Coyote Creek Golf Club, a Jack Nicklaus-designed course in Morgan Hill. Non-golfers can join for an elegant dinner in the evening.

Planned and Endowment Giving Harker has recently established a general endowment and two restricted endowments in honor of former history teacher John Near, one funded by Jim and Pat Near, and the other by the Mitra family.

Restricted endowments can be established with gifts of $100,000 or more. Gifts in any amount can be contributed to the general endowment or to an existing restricted endowment.

While most types of gifts (cash, securities, real or tangible property, IRAs) can be given to an endowment outright, it can be advantageous to make a “planned gift” to the endowment or other Harker funds as a part of your estate plan.

Bequests are the most common “planned gift” given to schools. Please consider naming Harker as a beneficiary of a specific amount, a percentage or a residual portion of your estate in your will. Families making “deferred planned gifts,” such as privately held stock or equity funds, or “revocable planned gifts” such as bequests, charitable remainder trusts or charitable lead trusts, become members of the Nichols Planned Giving Society. “Irrevocable gifts” are credited to the donor at the net present value of the gift.

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Gifts Honoring the Senior Class Graduates’ Club/Senior Brick Program Families who contribute $2,017 (for the Class of 2017) or more to annual giving become part of the Graduates’ Circle gift club. Their graduating senior receives a brick inscribed with his/her name and class year in Graduates’ Grove on the upper school campus. Families participating in the Senior Brick Program are also included in the Senior Parent Appreciation Gift and are invited to the Head of School’s Circle Celebration.

Senior Parent Appreciation Gift The Harker Senior Parent Appreciation Gift is a way for parents of graduating seniors to honor their students by making a gift in honor of the time their students have spent at Harker.

Participation in the Senior Parent Appreciation Gift is based on incremental giving. Senior families who make a donation to annual giving that is greater than the gift made the previous year will be included as participants in the Senior Parent Appreciation Gift. These incremental dollars will go to a Class of 2017 fund within Harker’s general endowment.

Students whose parents participate in this program have their names included on a permanent plaque on campus. The Senior Parent Appreciation Gift enables graduating classes to leave behind a legacy for future Harker students and is in recognition and appreciation of the fine education and wonderful memories that Harker has provided.

Senior Class Gift The senior class gift is funded by donations contributed by the graduating seniors themselves.

Working with the school administrators, the students select a project on campus to be funded.

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Alumni Giving Harker Alumni Every year we ask alumni to make a gift to the annual giving campaign as a way to give back to their school and to the students currently attending. In addition, alumni may choose to contribute to capital campaigns and/or endowment funds. Planned gifts are also an excellent way to leave a legacy at Harker.

Alumni Pacesetters & Leaders For our young alumni, we especially appreciate participation at any level. The Pacesetting gift amount is $5 for each year since graduation. For more information, contact Karri Baker ‘84, director of alumni relations,at karri.baker@harker.org or 408.345.9264.

Pacesetting Gift Amounts Class of* Years Since Graduation Gift Amount 2016 1 $5 2015 2 $10 2014 3 $15 2013 4 $20 2012 5 $25 2011 6 $30 2010 7 $35 2009 8 $40 2008 9 $45 2007 10 $50 *Your graduation year 2006 11 $55 is the year that your cohort graduated from 2005 12 $60 Harker, regardless of 2004 13 $65 whether you completed 2003 14 $70 your studies at Harker.

The Class of ‘97 is the 2002 15 $75 last graduating middle 1997* 16 $80 school class. All subse1996 17 $85 quent alumni should use their high school 1995 18 $90 graduation year.

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Supporting Harker’s Fundraising Events

Harker Family & Alumni Picnic The Harvest Festival is a fun family event for the entire Harker community. More than a “picnic,” this event provides fun and games for the whole family. Proceeds from the picnic benefit the school’s general endowment.

Harker Golf Classic Harker’s Golf Classic combines a fun afternoon of golf with an elegant dinner (which non-golfers will also enjoy!).

Proceeds from the Golf Classic benefit the school’s general endowment.

If you would like to support either of these events, you may do so by: making cash contributions donating an auction item providing in-kind donations (gifts of tangible personal property)

volunteering your time and, of course, attending the event!

Contact director of special events Danae McLaughlin at danae.mclaughlin@ harker.org to find out more.

Contributing gifts of cash or personal property can also provide donors with tax deductions. Sponsorships paid through charitable foundations may not receive sponsorship benefits according to foundation regulations.

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Capital Giving The Harker School’s Cornerstones for Success Campaign, our multiyear, multiphase capital campaign, is based on the central concept that an outstanding Harker education consists of four “cornerstones”: outstanding students, motivating faculty, quality curriculum and outstanding facilities. We are working to bring the standards of our facilities up to the standards of our students, faculty and curriculum.

We have completed the first four phases of the master site plan and now are working to build gym and theater on our Saratoga campus. A new gym and theater for our upper school will provide students and teachers with much-needed facilities appropriate to their programs.

Capital gifts are usually larger than annual gifts and can be paid over a number of years. In addition to having their names listed on the capital campaign donors’ wall, donors may “name” a space on campus in recognition of their gift.

Gift club ranges are as follows: Leading Visionaries $2,500,000+ Visionaries

$1,000,000 to $2,499,999

Harker Group

$100,000 to $999,999

Leadership Group

$25,000 to $99,999

Friendship Group

$2,500 to $24,999

Community Group Up to $2,499 For information about investing in capital giving at Harker, please contact Joe Rosenthal at joe.rosenthal@harker.org or visit www.harker.org/giving.

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Endowment Giving An endowment fund is money that remains largely intact in perpetuity and is carefully invested to earn income that is used to support the school. Endowment is critical to The Harker School’s long-term financial stability. Donors can make contributions to our existing endowment funds in any amount.

The Harker School General Endowment The school’s most critical and fundamental endowment is a quasi-endowment known as The Harker School general endowment. Established by the Board of Trustees to provide a major source of support for the school, the general endowment is composed of unrestricted funds and enhances the school’s ability to sustain itself, evolve and grow, hire and retain outstanding faculty and staff, attract and nurture gifted students. The Harker School general endowment is overseen by the audit committee of the Harker Board of Trustees to provide a perpetual stream of income to the school.

Donors to the general endowment are assured that only the income generated from their gifts will be distributed, allowing the principal to remain intact. Harker welcomes gifts in any amount to the general endowment.

Donor-Restricted Pure Endowments A donor-restricted pure or named endowment is expended over time, as the donor has described in his or her gift instrument. Acceptance of gifts establishing pure endowments is subject to prior approval by the school, and endowment management and investment is in accordance with prevailing law. These pure endowments may fund faculty chairs, student financial assistance, curricular innovation, faculty development, academic initiatives or other special uses. They may be named for individuals, families or other honorees. A pure endowment can be established with a minimum initial gift of $100,000. An example of a pure endowment is The John Near Excellence in History Education Endowment Fund.

Deferred Gifts Fund Gifts to this Board-designated deferred fund, such as gifts of privately held stock or private equity funds, are used after they materialize and/or are redeemed.

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Planned Giving A planned gift is defined as, “a mediated gift, that is, a gift which a charity receives through or by means of an agency, such as a will, a contract or a trust.” Planned giving is often a part of a family’s estate planning. Planned giving does not always need to be associated with a death for the tax incentives to be advantageous to a donor.

There are numerous vehicles and strategies available for individuals and families to maximize the benefits that come from making a planned gift. Some planned gifts bring funds to charities right away, others defer gifts to the charity until a later date. Some can be adjusted (revocable) and others cannot be changed (irrevocable).

For more information please contact Joe Rosenthal, executive director of advancement, at joe.rosenthal@harker.org.

Types of Planned Gifts Bequest through a living trust or will Gifts of privately held stock Gifts of private equity funds Naming Harker as the beneficiary of your life insurance policy Gifts of real estate, insurance policies or IRAs

Estate Planning

Gifts of a trust: CRT, CLT or an Insurance Replacement Trust

Planned gifts are commonly made as a part of a person’s estate plan. For many of us, estate planning is something we know we should do, but somehow manage to put off. While understandable, it is not wise. There is simply too much at stake. Estate planning involves the accumulation, conservation and distribution of assets. Your “estate” is your real and personal property which you intend to use to benefit yourself, your family and your community.

With good planning, one can substantially increase the amount that one leaves to heirs and to favorite charities.

The Nichols Family Planned Giving Society The Harker School recognizes those who make a planned gift by enrolling them in the Nichols Family Planned Giving Society. Becoming a member of the Nichols Family Planned Giving Society is simple — all you need to do is notify us that Harker is a part of your estate plan.

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How Gifts are Recognized We provide you with a letter of tax deductibility for all gifts greater than $75 (as required by IRS regulations), and for most gifts less than that amount. Our goal is to mail you this letter within three days of your making your gift, but during our heavy donation times this time frame may be extended. If you haven’t received your letter within two weeks after making your gift, please contact our office so that we can make sure your donation hasn’t been lost in the mail or otherwise missed.

In January of each year, we provide you with a letter of tax deductibility for specific charitable donations you’ve made in the previous calendar year, to help you in filing your taxes. This letter includes gifts to annual giving, capital giving, endowment giving and event giving.

If you have questions about your letter of tax deductibility, or if you haven’t received yours, please contact our director of stewardship, Allison Vaughan, at allison.vaughan@harker.org.

Recognition & Thanks Website We are very grateful for the charitable contributions we receive, which benefit all students, and we are happy to recognize our generous donors. All donors are listed on our Recognition & Thanks website (http://rt.harker.org), which is updated monthly. Those who have pledged are listed in gray, and those who have made their gifts are listed in black. When you make a gift, you may want to check the website to make sure your listing is accurate. If you have any corrections or questions about your listing, please contact our director of stewardship, Allison Vaughan, at allison.vaughan@harker.org.

Head of School’s Circle Celebration For those donors who make a gift to annual giving of $2,500 or more, Chris Nikoloff hosts the Head of School’s Circle Celebration. The evening includes stories from students about how annual giving donations have benefited them in their educations, entertaining student performances, festive company, and elegant food and drink. In order to be included in this special evening, please make your gift before April 1, 2017, as the event is held at the end of that month.

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Thank you

Harker Advancement Office 500 Saratoga Avenue • San Jose, CA 95129 408.249.2510

Contact Information Joe Rosenthal Executive Director of Advancement 408.345.9266 joe.rosenthal@harker.org

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Melinda Gonzales Managing Director of Advancement 408.345.9621 melinda.gonzales@harker.org