2016 Annual Report by AAACF

2016

ANNUAL

REPORT

Connecting People, Charitable Causes, and Permanent Capital for Community Impact

A A A C F AT A G L A N C E

The Ann Arbor Area Community Foundation (AAACF) is a philanthropic organization with a broad community focus: enriching the quality of life in Washtenaw County. More than 50 years ago, citizens established the foundation as a permanent source of community capital. Today, with more than 550 funds, think of us as a savings account for the community. Proceeds from our endowments are distributed as grants for local nonprofits and scholarships. In more technical terms, AAACF is a tax-exempt public charity* that helps individuals, families, groups, and organizations accomplish their philanthropic goals. Through a core team of 18 Trustees, a staff of 10 FTE, and 400+ volunteers, AAACF connects people, charitable causes, and permanent capital for community impact. * One of more than 700 community foundations nationwide and in the top 10 largest of Michigan’s 63 community foundations.

Personalized Service. Local Expertise. Innovative Collaborations. We believe these qualities set AAACF apart as we aim to be more than funders—we also live, engage, and raise families here. We are your community foundation for impact in Washtenaw County!

SINCE OUR 1963 FOUNDING:

100M+

total assets

10,000+ grants & scholarships, totaling

45M+

2016 HIGHLIGHTS

During this exciting year, AAACF launched new initiatives, implemented efforts funded by grants announced late last year, and expanded its partnerships to increase impact for Washtenaw County. The Community Scholarship Program was announced with fanfare to a record crowd of 400+ at our 2016 Annual Community Meeting. Details on this data-driven program to increase college graduation for local youth from targeted populations follow on the next pages. Seeded by a $1M anonymous donor new to AAACF, the accompanying $250,000 challenge to the community to match funding has been met! Beyond scholarships, AAACF created new endowments* of every type in 2016: Community Impact (unrestricted) and field-of-interest funds that support our grantmaking; nonprofit endowments (p. 5); an administrative fund; and donor-advised funds, where donors work with us as their philanthropic partners. We have also begun expanding our sources of funding for local nonprofits with a charitable gift annuity (CGA) program and an emerging impact investing program. Our donors have responded positively to our three-pronged Community Grantmaking program to reward success, strengthen the nonprofit sector, and encourage innovation (pp. 7–8). We are grateful for new partners and for the many faithful donors who continue to invest in our efforts to impact Washtenaw County!

Data-Driven Programs. Enhanced Partnerships. Increased Impact. Thanks to continued, expanded, and new programs and funding in 2016, AAACF is continually investing in the future of Washtenaw County. * A list of funds is available on our website: aaacf.org.

IN 2016:

3.5M+

distributed as

650+ & 165+ grants

scholarships

7.2M+

in gifts & pledges, including

25 new funds

COMMUNITY SCHOLARSHIP PROGRAM:

Announced at the 2016 Annual Community Meeting, the Community Scholarship Program was carefully designed based on research and a close local partnership with Washtenaw Futures, the local college access network hosted by the Washtenaw Intermediate School District. Local data from Washtenaw Futures confirmed national findings that three groups stand to benefit the most from higher education degrees, yet often lack the resources to achieve them: students from lowincome families; students of color; and first-generation college students. AAACF’s Community Scholarship Program provides multi-year scholarships for students from these three populations because research shows that the later years of college are the hardest to find support. Because our goal is not to distribute scholarships but to graduate students, the Community Scholarship Program also provides a “success coach” for the recipients to encourage their successful navigation through their educational journeys. Eastern Michigan University and Washtenaw Community College are also important partners in our efforts.

2016 Recipients

2017 Recipients

Andrew Besford

Aliou Bathily

Diana Bernal-Canseco

Kevin Becerra

Nyla Dew

Brooke Besford

Savannah Ellington

Soroush Chabavi

Aazhane Hearon

Beatriz Esquivel

Chelsea Hollins

Destiny Esters

Keitra Osler

Mohamed Fofana

Chris Vazquez

Tracy Markray

Salamah Wadi

Monica Mitchenor

Jeffrey Williams

Kearria Nichols

Ray’Jon Williams-Jackson

Delante Ridley Fatoumata Soumaoro Deja Ulmer

SUPPORT BY THE COMMUNITY, FOR THE COMMUNITY

The Level the Playing Field Fund is a significant fund within AAACF’s Community Scholarship Program focused on students with financial need graduating from the Washtenaw County public school system. This fund was launched with a $1M gift from an anonymous donor, including a $250K dollar-for-dollar match so that the program would truly be by the community and for the community. Many donors at all levels responded to the challenge, including several new named funds created under the Level the Playing Field Fund, as well as a conversion of a pre-existing scholarship fund: Karla & Omer Bellfi Scholarship Fund John Martin & Molly Resnik Scholarship Fund Don & Paula Moffat Scholarship Fund Sarah Winans Newman Scholarship Fund Donald & Elaine Olson Memorial Scholarship Fund Emerson & Gwendolyn Powrie Fund Earl & Marie Shaffer Scholarship Fund Justin Tang Memorial Scholarship to “End Fear” Kent & Doris Terwilliger Scholarship Fund Udow-Phillips Scholarship Fund VandenBroek Scholarship Fund

NONPROFIT ENDOWMENTS

AAACF holds endowments for more than 115 nonprofits,* working in partnership with these organizations. Because AAACF has the administrative expertise to manage and steward all aspects of the endowment, each nonprofit can focus on carrying out its mission. Endowments provide a way for nonprofits to diversify their funding and build capital for the future. Nonprofits can establish endowments, and so can donors—as current or planned gifts. Loyal annual supporters of an organization can consider a planned gift—a gift made through your estate—as a way to ensure annual giving to your favorite nonprofit continues in perpetuity. For example, a $20,000 estate gift approximates an $800 check each year! * For a complete list of nonprofits with endowments, please visit our website at aaacf.org.

Enhancing AAACF’s Financial Partnerships with Nonprofits

A video of AAACF’s impact investing pilot with the Ann Arbor Art Center (above) has been widely viewed (see it on aaacf.org). A low-cost loan allowed the Art Center to quickly proceed with construction, expand its programming, and repay the loan.

In 2016, AAACF made great progress on efforts to expand its services to Washtenaw County organizations and donors. With funding from the Ralph C. Wilson, Jr. Foundation, AAACF formally launched its Charitable Gift Annuity (CGA) program. A CGA provides a simple and accessible way for donors to receive life-income and to support a nonprofit endowment. With $500,000 in support from the Revolver Fund, AAACF has also been exploring ways to expand its Impact Investing Program, providing another avenue for our nonprofit partners to access capital. Impact investing represents a range of efforts to realize both a social and financial return.

GRANT PROGRAM OVERVIEW

Our Community Grantmaking Program has three key components: Rewarding Success operating support grants; Strengthening the Nonprofit Sector capacity-building grants; and Encouraging Innovation grants for “Bold Ideas.” Within this three-pronged program, grantees are evaluated upon three core areas: leadership & governance; high-quality, impactful programs; and financial strength.

R E WA R D I N G SUCCESS

STRENGTHENING THE NONPROFIT SECTOR

ENCOURAGING I N N O VAT I O N

$10,000 Grant Awards for Operating Support

$5,000 Grant Awards for Capacity Building

$10,000 Grant Awards for “Bold Ideas”

Grantees demonstrate strength In: • Leadership & Governance • High-Quality, Impactful Programs • Financial Strength

Grantees demonstrate a plan to strengthen: • Leadership & Governance • High-Quality, Impactful Programs • Financial Strength

Grantees demonstrate innovative ideas and projects that generate a significant leap in how our community addresses a challenging community issue

2016 GRANTEES

2016 GRANTEES 826 Michigan Ann Arbor Symphony Orchestra Ann Arbor Hands On Museum Food Gatherers Foundations Preschool Huron River Watershed Council Legacy Land Conservancy Neutral Zone Nonprofit Enterprise at Work SafeHouse Center Washtenaw Area Council for Children

2016 Aid Grantees in Milan Friends in Deed NAMI Washtenaw County Riverside Arts Center

Cultivate Coffee & Taphouse Snowbuddy Washtenaw ID Project

We partnered with our donor-advised fundholders to support the “Bold Ideas” innovation grants and magnify our impact, resulting in more than $100,000 in total investments. In 2016, we established nine new donor-advised funds at AAACF, including one conversion from a private foundation!

GRANT PROGRAM HIGHLIGHTS:

The power of permanent community capital. Washtenaw County is full of strong community pride: a love for where we live, work, raise families—and where we choose to make a difference. Thanks to support from generations of donors, we’re able to make Washtenaw County a better place. When you give where you live, you are part of creating real impact, benefitting our community forever.

AAACF’s competitive grant programs invest in nonprofits serving specific communities, as well as those serving across the entirety of Washtenaw County. These examples from our 2016 grants demonstrate the power of permanent community capital. Full grants list available: aaacf.org

United Methodist Retirement Communities Bach Fund for Seniors grant supported training for staff & caregivers

Dexter

Chelsea

Faith in Action Michigan Health Endowment Fund support for Benefits Advocacy & Referral Coordination

Manchester Community Resource Center Coordinated Funding provided two years of capacity-building support

S E R V I N G WA S H T E N AW C O U N T Y

Huron River Watershed Council Our Rewarding Success program provided general operating support

Ann Arbor Hope Medical Clinic YACF grant to provide orthodontics to low-income youth

Ypsilanti

Riverside Arts Center

Saline

First Fridays Ypsilanti received a second year of support through our Cultural Economic Development initiative

The Fifth Corner Youth Council funded Raising Up Young Women program

Milan

Aid In Milan Community Grantmaking funded capacity-building for Leadership & Governance

VOLUNTEERS & GOVERNANCE

2017–2018 Board of Trustees

AAACF 2017–2018 Board of Trustees. Front row (L-R): Cindy Cattran, Karen Andrews, Doug Weber, Linh Song, Brian Campbell, Michael Staebler. Back row: Ann Davis, Jeff Hauptman, Brynne Hindle, Elizabeth Petoskey, Robert Laverty, Tim Wadhams, Michelle Crumm, Sean Duval, Nancy Margolis. Not pictured: George Borel, Marie Deveney, Paul Schutt.

Tim Wadhams Chair

Karen Andrews

Michelle Crumm Immediate Past Chair

Brian Campbell

Doug Weber Vice Chair

Sean Duval

Cindy Cattran Treasurer Marie Deveney Secretary

George Borel Ann Davis Jeff Hauptman Brynne Hindle Robert Laverty Nancy Margolis Elizabeth Petoskey Paul Schutt Linh Song Michael Staebler

AAACF Volunteers Steve Alexandrowski Tom Allor Robert Andrus Nicole Anguilm Wayne Appleyard Patrick A. Aquart Nick Areddy Steve Armstrong Sara Armstrong King Shawn Ashley Faye Askew-King Jared Aumen Bryan Aupperle Aleyah Austin Kathleen Dul Aznavorian Mary Bakhaus Katie Ballard Kiana Barfield Ruth Barnard Karl Barr Christie Barrett Thomas Barrett Rachel Bendit Jerry Benjamin Scott Bennett Kevin Benson Lynda Berg Deb Berman Blair Beuche Debbie Beuche Jill Beurkel Sarah Bishara Norman Bishara Herb Black Christine Kahan Black Thomas H. Blaske George Borel Charlie Borgsdorf Bennett Borsuk Amanda Borsuk John Boshoven Joy Bowerbank Fred Boyd Rebecca Boylan Robert Brackenbury Jonathan Branoff Lori Brewer Linda Brewer Kathryn Brickman Steve Brouwer Connie Brown Gary Bruder Flyod Brumfield Carol Otto Buatti Meredith Burke Kelly Burnell Angela Burns Prinest Burton Charlie Butz Brian Campbell Amanda Carlisle Cynthia Cattran Brendan Cavender Nancy Caviston Peter Ceglarek Marsha Chamberlin Kathleen Chaney-White Eve Claar Peter Clark

Todd Clark Mark Clevey Deborah Collins-Bohler Connie Cook Jane Coon Anne Cooper James Corey James Cornils Mary Cornils Jason Costello Lauren Costello Paul Cousins Colleen Creal Michael Crowley Michelle Crumm Richard Cundiff Ryan Cunningham Pamela Cuthbert Don Dagleish Claire Dahl Thomas Daniels Marcus Darden Martha Darling Ann Davis Dottie Davis Dean DeGalan Shoshana DeMaria Chris DeRuyver Marie Deveney Nick Dever Judith DeWoskin Virginia Diepenhorst Audrey Price DiMarzo Steve Dobson Marlene Donoghue Richard Dopp Alex Drain Connie Dunlap Patty Durkee Kristel Durkee Marcus Edmondson James Edwards Cheryl Elliott Andy Emmert Carole Empey Mairead Erhardt John Evangelista Sara Evans Rob Ewing Garry Faja Ellie Falahee Nina Farahanchi Dr. Cheryl Farmer Russ Ferguson Lynette Findley, PhD Lauretta Flowers Roy Foster Dr. Harry Fountain Anthony Frasca Stephanie Freeth Timothy Freeth Andrew French Jim Frenza Frank Garcia Eric Geiser Sr. Yvonne Gellise Tom George Brianna Gholston Nanette Gill

Ned Glysson Rachael Goldberg Amy Goodman John Goss Lon Grantham Charles Groh Robert Guenzel Margaret Guire Jamie Guise Jeff Hall CJ Hall Jinan Hamood William Hampton Donald Harrison Tom Harrison Jeffrey Harrold Jeff Hauptman Ethan Hawker James Hawkins Laura Hayden Brian Hayden Janet Haynes Norman Herbert Karan Hervey Amy Hetzler John Heuser Nancy Higgins Brynne Hindle Julia Hines Joan Hoeft Howdy Holmes William Holmes Charles Hookham Patricia Horne-McGee Norman Howard Mickey Howe Sandy Hurd Laura Irgang Susan Jacob Bob James Jeff Jenkins Penny Joy Noah Kaplan Helen Kaplan Michael Kapolka Joe Karmann Doug Kelly Celia Kent Matt Kerrigan Charles Kim Christina Kim Tyler Kinley Bill Kinley Connie Kinnear Pam Kirchen Caitlin Klein Josh Knapp Joseph Koch Cathy Kohn Michael Kohn John Kotarski Becky Kozlik Jeff Krusinga Bhushan Kulkarni Jonathon Lane Ruth Lapprich Harold Lapprich Kevin Lapprich Seana Larson

Robert Laverty Sarah Laverty Lena Lee Heather Lemon Shoshana Lenski Anne Leo Harvey Leo Craig Levin Edith Lewis Jennifer Lickers Mark Lindke Tambra Lipper Kay Long Dan Long Donald Loppnow David Lutton Bridgit Macomber Joe Malcoun Patricia Manley Alison Marable Nancy Margolis Michael Martin John Matlock Karen Maurer Megan Mazurek Betsy McCallister Stephen McClatchey Sally McCracken Susan McCreadie Courtney McCreadie David McCreadie Paul McCreadie Frederick McDonald II Krista McDonnough Alex McEachern Ken McGraw Barbara Meadows Shreya Menon Scott Menzel Timothy Merkel Leanne Mertzman Allison Mertzman Al Metty Zyad Mian Phillip Miller Ayumi Miller Michael Miller Robert Miller Lonnie Mitchell Doug Moffat Ginny Morgan Hugh Morgan Melinda Morris Dave Morrison Rishi Moudgil Marc Mourhous Roy Muir Carmalita Mullins Evan Murphy Jason Murphy Warren Musson Athul Nair Andrew Neidlinger Amanda Nellis Lauren Neumann Catherine Nicoli Chrissy Nisson Michael Nisson Alexa Noel

Ryan Noel Judy Nold Ellen O’Malley Tom O’Brien Karen O’Neal Jerry O’Shaughnessey Naseem Othman Sydney Padgett Willis Patterson Susan Pearlman Mark Pearlman Aaron Pearlman Zack Pearlman Hannah Pearlman Gregory Peoples Alex Perlman Miriam Perry Elizabeth Petoskey Thai-Vi Pham John Philips Ray Pittman Jennifer Poteat Brittany Powers Ray Rabidoux Stephen Raimon Vicki Reaume Jack Reid Russell Reister Margie Reynolds JoAnne Reynolds James Roach Scott Robinson II Jenna Romain Lawrence Rowley Omari Rush Chichi Ruwende Gail Ryan Paul Saginaw Trudy Salmeen Waleed Samaha Elaine Sargous David Sarns Ann Schriber Elena Schroeder Inger Schultz Edwin Schulz Dr. Julie Schumaker Paul Schutt Dr. Janet Schwamb Sarah Scott Kathleen Seurynck Yasmeen Shakour Romy Sharieff Tennille Sharp George Sherman Mark Shriberg David Siegrist* Abigail Simon Jim Simpson Kyra Sims Loretta Skewes* JoAnn K. Slater Michael Smith Jen Smith Patti Smith Zain Souweidane Anne Staebler Ned Staebler Robbie Stapleton

Gloria Stapp Dick Steele Don Stein Greg Stejskal Samantha Stephens Liz Stern Karl Stern Norman J. Stevens Carol Stringwell Britten Stringwell Erik Stringwell Leah Stringwell Luman Strong Michael Summerton Joseph Sutkowi Mark Swanson Sam Talsma Pat Tamblyn Kevin Tan Simone H. Taylor Christopher Taylor Jean Thiel Kate Thirolf Jim Thomas Kevin Thompson Levi Thompson Lauren Thompson Jordan Tirico Roberta Towne Matthew Turner Tom Ufer Tracey Van Dusen Alina Verdiyan Tim Wadhams Ken Wadland Bruce Wallace Fr. Brendan Walsh Helen Warren Dr. Ed Washabaugh Leigh Washabaugh Dave Webb Nicole Webb Doug Weber Jerry Weidenbach* John Weiss Susan Westerman Chris Westfall Robert White Sandy White Walter Whitehouse, M.D. Laura Whitridge Brad Whitridge Brian Williams Ray Williams Bev Willis Kerry Winkelseth Kim Wolske Kathy Wood Bill Wood Ronald Woods Lynn Wooten Sabrina Wu Ryan Yang Christopher M. Yee Moira Yuhas Dabao Zhang * Deceased

F I N A N C I A L U P D AT E

2016 FINANCIAL REPORT Total Assets Total Assets December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $101,430,277

(1)

Total Assets December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 75,600,487

Revenue, Gains, and Support Gifts and Pledges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

7,194,318

Net Investment Revenue and Other Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

5,477,136

(2)

Total Revenues, Gains and Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,671,454

Expenditures Grants and Scholarships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

3,581,797

Investment Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

418,111

Administrative Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

1,312,233

(2)

Total Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,312,141

Investment Returns (Annualized)

2016

2015

2014

2013

3 YEARS

5 YEARS

AAACF

7.5% –2.1% 5.3% 14.0% 3.5% 7.5% 6.9%

Benchmarks

6.0% -1.9% 5.2% 13.4% 3.0% 6.7% 6.0%

Notes to Financial Information (1) Total assets include $18,017,370 for the new Glacier Hills Legacy Fund, a temporary charitable fund. Due to accounting rules, the fund is not included in “Gifts and Pledges.” (2) Due to accounting rules, the total reflected in “Gifts and Pledges” and “Grants and Scholarships” do not include activities related to AAACF’s Agency Funds or Special Funds. In 2016, these funds accounted for an additional $510,040 in gifts and pledges received and $294,661 in net grants awarded.

7 YEARS

Asset Allocation (at 12/31/16)

Private Equity & Venture Capital (6.6%)

Real Assets (8.9%)

Domestic Equities (25.2%)

Fixed Income (10.5%)

Hedge Funds (22.2%) Liquid Capital (0.4%)

International Equities (26.2%)

AAACF invests assets to maximize long-term returns while assuming a reasonable level of risk in order to support our grantmaking. The total return strategy ensures that investment objectives will be met over long-term investment cycles, with thoughtful diversification to help weather volatile periods. Returns are expected to outperform benchmarks over a multi-year market cycle, which continues to be the case. As long-term institutional investors, we remain confident that our portfolio is wellpositioned for stable growth over time, consistent with our permanent endowment philosophy. Accountability The Ann Arbor Area Community Foundation is fully accountable to the donors and citizens of our community. We are pleased to make available more detailed information regarding our operations upon request. AAACF’s operations are governed by a volunteer Board of Trustees composed of community members who bring a broad range of professional expertise in guiding AAACF’s work. An independent financial audit, conducted each year, currently by Plante Moran PLLC, was finalized and approved by AAACF’s Board of Trustees at their May 2017 meeting. The Ann Arbor Area Community Foundation meets the Council on Foundations’ National Standards for Community Foundations.

A A A C F S TA F F

Connie Dunlap Archivist, Historian & Librarian cdunlap@aaacf.org

Shelley Strickland Vice President for Development sstrickland@aaacf.org

Maryellen Ferro Community Investment Officer mferro@aaacf.org

Katie Van Dusen Community Investment & Projects Coordinator kvandusen@aaacf.org

Neel Hajra President & CEO nhajra@aaacf.org

Deborah VandenBroek Development Manager, Sr. Yvonne Gellise Fund dvandenbroek@aaacf.org

Rachel Huang Coordinator rhuang@aaacf.org

Katelyn Videto Donor Services Officer kvideto@aaacf.org

Jamie Hunter Chief Financial Officer & Vice President of Operations jhunter@aaacf.org Christopher Lemon Youth Council Advisor clemon@aaacf.org Diann Moses Gift & Records Coordinator dmoses@aaacf.org Jillian Rosen Director of Community Investment jrosen@aaacf.org Phillippia Shumate Controller pshumate@aaacf.org

AAACF Staff. Back row (L-R): Phillippia Shumate, Chris Lemon, Shelley Strickland, Neel Hajra, Deb VandenBroek, Katelyn Videto. Front row (L-R): Rachel Huang, Katie Van Dusen, Diann Moses, Jillian Rosen, Jamie Hunter. Not pictured: Connie Dunlap, Maryellen Ferro.

How to

+ GIVE ENGAGE The Ann Arbor Area Community Foundation is by the community, for the community. More than 50 years ago, citizens established the foundation as a permanent source of community capital and we have since granted out more than $45 million. We can continue to support Washtenaw County through ongoing contributions from our citizens. We offer a variety of ways to give—whether supporting a favorite cause, honoring a loved one, or establishing a legacy. Permanent named funds begin at $5,000. Contact us at 734.663.0401 or info@aaacf.org to learn how to make an impact!

Save the Date! Celebrate Washtenaw County at our Annual Community Meeting on May 7, 2018.

Our doors are always open.

Mission The Ann Arbor Area Community Foundation enriches the quality of life in our region through our knowledgeable leadership, engaged grantmaking, and creative partnerships with donors to make philanthropic investments and build endowment.

301 North Main St., Suite 300, Ann Arbor, Michigan 48104

734.663.0401 | info@aaacf.org | aaacf.org