BACK OFFICE DEEP DIVE DAY O VERVIEW Todays Goals Understand the - PowerPoint PPT Presentation

GIFT/Indiana Philanthropy Alliance BACK OFFICE DEEP DIVE DAY

O VERVIEW Today’s Goals  Understand the business challenges of community foundations  Share research about how others are addressing these challenges  You will guide next steps in this work

B ACKGROUND Sus ustai tainabili nability ty 1.0  Understanding fund management costs  Fund management changes – fund sizes, minimums, fees  Indiana CFs have had tremendous success in this work  69% sustainability  90% sustainability

C URRENT S TATE OF A FFAIRS Every miles!!

O PPORTUNITIES FOR E FFICIENCY Simplest Most Complex Legal/ Process Outsourcing - Outsourcing - Outsourcing - Structural Shared Staff Level 1 Level 3 Improvement Level 2 Changes Examples Examples Examples Examples Examples Examples • Fund management • Payroll • Professional employ. • Accounting • Scholarship staff • Restructuring of staff • Fund Audit • IT functions organization (PEO) • Acknowledgements • Grant staff • Affiliation • Paperless Office • Investment • Outside chief invest. • Grant processing • Marketing staff • Online Scholarship Management officer (OCIO) • Data Entry Applications • Website • Marketing • Property management • Planned Giving info • CGA Administration

B ACK O FFICE VS . F ORWARD F ACING

B ACK O FFICE VS . F ORWARD F ACING  Some functions can only be done by you in your community  Some functions can happen anywhere – across the street, across the state, across the country  Do What You Do Best

B ACK O FFICE VS . F ORWARD F ACING Functional Area Back Office Elements Forward Facing Elements (can be done anywhere) (can only be done in your community) Development Gift entry, acknowledgement letters, donor Donor stewardship, meetings, events, professional advisor information management, prospect research meetings Planned Giving CGA and trust administration, Legacy Society Professional advisor events, Legacy Society events tracking Application development, online software Grant strategy development (criteria, Grants and management, recordkeeping, , material priorities)applicant/grantee interaction, phone calls, site Scholarships preparation for review committees, grant entry visits, review committee meetings, minutes, engagement with students/parents/high schools/colleges

C URRENT S TATE OF A FFAIRS  Pain points remain  CPI + 5%

P AIN P OINTS Opportunities for Efficiencies # of Process Shared Improvement Outsourcing Staff PAIN POINTS Votes Database management (mailing list, profile entry, etc.) 50 X X Insurance management and employee benefits management 40 X Fund statement process 35 X X System for tracking of interaction with donors 34 X Scholarship process 32 X Generating reports 32 X X Month-end/quarterly/annual general ledger closing processes (allocation of investment returns, admin fees, journal entries, etc.) 28 X X IT equipment/networking 28 X X

I DEALWARE S URVEY  40 community foundations responded to IdealWare technology survey  Ten community foundations were interviewed  Findings:  There’s opportunity to share back office administration tasks as well as some accounting functions.  Most interviewees were outsourcing their IT functions  There may be an opportunity to create a series of customized dashboards that each foundation can plug its own data into.

T ECHNOLOGY C OSTS  Estimated software costs including database, online grant & scholarship programs, virus and general software - $958,000  Estimated hardware costs including laptops, servers and towers - $511,000  Research being done on other vendor opportunities  TechSoup now has program for hardware as well as software

I NDIANA P ANEL

O UTSOURCING T IM M URPHY , P RINCIPAL C LIFTON L ARSON A LLEN

P ROFESSIONAL E MPLOYMENT O RGANIZATION (PEO) M ARIE F ELVER V ICE P RESIDENT OF F INANCE AND O PERATIONS H ANCOCK C OUNTY C OMMUNITY F OUNDATION

O UTSIDE C HIEF F INANCIAL O FFICER K EIRA A MSTUTZ T IM M URPHY P RESIDENT & CEO P RINCIPAL I NDIANA H UMANITIES C LIFTON L ARSON A LLEN

O UTSOURCED A CCOUNTING L ARRY P EJEAU D AN D AVIS P RESIDENT & CEO P RESIDENT & CEO B ROWN C OUNTY C OMMUNITY F OUNDATION C OMMUNITY F OUNDATION OF J ACKSON C OUNTY

N ATIONAL P ANEL

T HE HUB D EB M ILLICAN F ORMER O FFICER M ANAGER C OMMUNITY F OUNDATION OF THE U PPER P ENINSULA

HUB C LIENT D OCUMENTS L IST  Gifts fts • Fill-in Donor Forms • Name of Individual or Organization • Copy of deposit slip or include total in email • Send to CFUP Office  Checks hecks • Fill-in Vendor Request Form • Send to CFUP Office  Gran ants ts • Fill-in Grant Form  New Funds ds • Fill-in New Fund Form

Community Foundation Grant/Vendor Request Form Vendor Grant Payee Purpose of Oper. Fund Date Check Check Notes Check Check Check/Grant Name Expense ID Paid Amount Number Account

T HE HUB M ELISSA B LISS F OUNDATION A DMINISTRATOR T HREE R IVERS A REA C OMMUNITY F OUNDATION

HUB S OFTWARE C OMPARISON BROMELKAMP FIMS CFUP HUB (Blackbaud) Server Hosted $ 36,200.00 one time fee $ 48,003.00 one time fee $ 1,250.00 one time fee Annual Fee $ - $ 9,601.00 $ 6,000.00 Support $ 4,610.00 included Cloud $ 18,100.00 one time fee $ 11,500.00 annual fee N/A Annual Fee $ 3,740.00 included Support $304/mo unlimited included **$20/hr, not to exceed Implementation Costs included $ 10,000.00 $ 750.00 $750 for implementation

CFCI & G REATER H ORIZONS M ARK R OBERTS P RESIDENT AND CEO C OMMUNITY F OUNDATION OF C ENTRAL I LLINOIS

O VER THE N EXT F EW M INUTES … Over the Next Few Minutes…  Brief introduction to CFCI  What is Greater Horizons?  Why did CFCI become a client of Greater Horizons?  What services do they provide? (and a specific example)  Our experience with Greater Horizons to date…pros and cons  Our recent (and ongoing) due diligence activities  Not a sales pitch…

A B RIEF I NTRODUCTION TO CFCI Over the Next Few Minutes… Founded in 1986, CFCI has total assets of $29 million in over 300  funds Staff of four that = 3.5 FTE  A separate 501(c)(3) organization, the Depository, was founded in  1992 and holds total assets of $3 million in 160 accounts…”Charitable Checking Account” In 2013 the CFCI Board of Directors approved entering into an  agreement with Greater Horizons, an entity of the Greater Kansas City Community Foundation (GKCCF), to provide back-office accounting and grantmaking services to CFCI Signed a Memorandum of Agreement and Agency Fund agreement  that was effective as of November 1, 2013. A revised agreement was signed in May 2016.

W HAT IS G REATER H ORIZONS ? Over the Next Few Minutes…  Created in 2004 as a part of GKCCF, Greater Horizons is a provider of charitable giving services to individuals, families, companies and community foundations  GKCCF has combined assets of more than $2.5 billion  Greater Horizons has approximately 35 community foundation clients ranging in total asset size from $1 million to over $150 million. Over $500 million in total assets.  Annually processes more gift and grant transactions than any other community foundation in the country  Hold themselves to the highest reporting standards, including the completion of a SOC 1 Report (SAS 70 Audit), which is unique in the industry

W HY D ID CFCI B ECOME A C LIENT OF Over the Next Few Minutes… G REATER H ORIZONS ?  Operational challenges inherited in 2008: monthly financials, quarterly fund statements, categorization of fund types, calculation of $ available to grant, and more  Significant administrative workload generated by Depository: average over 2,400 grants + over 200 stock gifts annually  Plenty to keep CEO up at night: small staff, lack of capacity, FIMS training, meteor theory, etc.  Reasonably priced solution…roughly similar to a full -time position…buys LOTS of capacity

S ERVICES THAT G REATER H ORIZONS Over the Next Few Minutes… C URRENTLY P ROVIDE TO CFCI  Reconcile bank statement  Legal Advice  Process and print checks  Quarterly Fund Statements (grant & vendor)  Grant Payments  Gift acknowledgement  IRS 1099s letters  Audit work papers  Monthly management  Open new funds reports  Spending calculations  Calculate average stock selling price for gift amount  Journal entries  Verify 501c3 status through upgraded version of Guidestar