[Publib] Library Foundations

[Robert L. Balliot]

Greetings,

 

I am not sure what you mean by insurance.  What sort of insurance

are you thinking of getting?

 

I orchestrated an endowment for a Friends group that was subordinate

to the Rhode Island Foundation.  The RIF charges 1% per year to manage

the endowment.  The return on the endowment invested has averaged about 14%

per year since the money is combined with the $400M in resources

managed by the RIF.  There is no guaranteed return like a bank account,

but historically the fund has done exceptionally well.  If I recall
correctly,

even during the recessionary times, because of the floating averages

applied over three years, the ROI yielded an exceptional 7-8% per year.

 

Each year, the RIF issues a check to the Friends group for 4.5% of

the total.  The Friends can either expend the funds or return it to

continue to grow the funds.  The original funds came from a couple of

cash gifts that had been deposited as CDs.  They had made only 2%

per year for several years.  Also, the Friends would have to account 

for those items in their 990 forms.  With the funds combined with RIF,

the 990s are generated by RIF and not the Friends, so they lose that

expense. 

 

On top of those obvious financial benefits, the RIF is able to accept

just about anything as a donation - land, jewelry, art, stocks, etc.

which can be very difficult to manage using the accounting skills

of a smaller entity.  Also, having money managed by a large

reputable Foundation helps to validate the way that funds will be

used and can allay financial fears by donors.  The Friends were

able to keep their bank account to make regular donations, but

the endowment and action of growing an endowment created

a legacy fund for the long haul.

 

*************************************************

Robert L. Balliot

1-401-421-5763

Skype: RBalliot

Bristol, Rhode Island

http://oceanstatelibrarian.com/contact.htm

*************************************************

  _____  

From: publib-bounces at webjunction.org [mailto:publib-bounces at webjunction.org]
On Behalf Of Bergstresser, Emily R
Sent: Tuesday, July 10, 2007 2:15 PM
To: publib at webjunction.org
Subject: [Publib] Library Foundations

 

We are seeking information from library foundations.  We would be interested
in learning what type of insurance the foundation carries.

 

 

Thanks!

 

Emily Bergstresser

Management & Govt Information Center

Prince William, VA  

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