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Minnesota Orchestra Endowment Presentation Sept 20 2012

Minnesota Orchestra Endowment Presentation Sept 20 2012

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Endowment/Trusts:
MOA has four main endowments/trusts that have invested assets worth $138.4M as of July 31, 2012. -- MOA is unable to continue to take unsustainable draw rates from its Endowment.
MOA Endowment The value of the endowment’s assets is $61.2 M as of 7/31/12 The first funds raised for the endowment were in the 1960s with matching funds from the Ford Foundation. In 2010, a new independent investment consultant, Cambridge Associates, was hired to manage the portfolio. Building Fund
Endowment/Trusts:
MOA has four main endowments/trusts that have invested assets worth $138.4M as of July 31, 2012. -- MOA is unable to continue to take unsustainable draw rates from its Endowment.
MOA Endowment The value of the endowment’s assets is $61.2 M as of 7/31/12 The first funds raised for the endowment were in the 1960s with matching funds from the Ford Foundation. In 2010, a new independent investment consultant, Cambridge Associates, was hired to manage the portfolio. Building Fund

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Categories:Business/Law, Finance
Published by: Minnesota Public Radio on Oct 22, 2012
Copyright:Attribution Non-commercial

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05/28/2014

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MOA has four main endowments/trusts that have invested assets worth $138.4M as of July 31, 2012.-- MOA is unable to continue to take unsustainable draw rates from its Endowment.
MOA Endowment
The value of the endowment’s assets is $61.2 M as of 7/31/12
The first funds raised for the endowment were in the 1960s with matching funds from the Ford Foundation.
In 2010, a new independent investment consultant, Cambridge Associates, was hired to manage the portfolio.
Building Fund
The value of the Building Fund’s assets are $7.7M as of 7/31/12
The fund is used to support the operating costs of the building, and to service the $1.69M outstanding debt for the last hallrefurbishment in 1997.
Draw 6% of net value after subtracting $1.69M debt from last fiscal year average market value.
Oakleaf Trust
The value of the Oakleaf Trust is $57.3M as of 07/31/12
The Trust is governed by a trust document and administered by five trustees appointed by MOA.
MOA receives an annual distribution from the Trust, calculated by the Yale draw formula. Which is 70% of prior year’s draw plus1.5% of YE December 31
st
market value. 10% penalty for each year not in financial equilibrium.
Average draw rate the last five years was 4.3%
Established Building for the Future Endowment for new endowment donations. It is managed under bylaws of Oakleaf Trust. Valueof $8.1M as of 7/31/12. There is $3M more pledged. Goals is to raise $20M by F2015.
St. Paul Foundation
The value of the St. Paul Foundation Trust is $1.2M as of 7/31/12
The St. Paul Foundation pledged $250K in a matching grant to the new endowment campaign in the 1990s.
Foundation reports to MOA quarterly on the value and makes a distribution once a year as a draw.
Average draw rate the last five years was 4.8%1
Endowment/Trusts:
 
MOA’s
invested assets
were more than 40% lower in FY 2012 than planned back in 2007
As a result, FY 2012 projected draw amounts are $4.7M lower than planned
Shortfall significantly adds to MOA’s structural deficits
Note: Updated F2012 to reflect up-to-date figures. Previously F2012 Projected invested assets was $139.3Mand expected draw was $7.6M
Invested Assets Value in $Ms Expected Draw Amounts in $Ms
2
$9.7$10.3$10.9$11.5$12.2$9.6$8.9$8.1$7.7$7.5$6.0$7.0$8.0$9.0$10.0$11.0$12.0$13.02008 2009 2010 2011 2012 Proj
2007 Assumptions 2011 Update
Endowment Revenue
$192.4$201.4$211.4$221.6$232.7$168.5$135.3$137.0$140.7$138.4$-$50.0$100.0$150.0$200.0$250.02008 2009 2010 2011 2012 Proj
2007 Assumptions 2012 Update
F2012 Projection includes the $8.1M in the New Endowment from which at present MOA is not able to draw upon
 
Since F2007 MOA’s Endowment had $50.5M in operating draws for an average annual draw rate of 11.2%
The operating draw rate has increased from 6.4% in F2007 to nearly 18% for F2012
Earlier slide covering last 10 years through F2011 showed average annual draw at 9.9%3
MOA Endowment Draws
Note: Operating draw excludes Endowment draws for pension funding, capital asset purchases and non-labor BFF campaign costs
TotalEndowment Operating Operating(In $Ms) as of 8/31 Draw Draw %F2012 (as of 07/31/12) $61.2 ($10.8) 17.7%F2011 $69.0 ($9.4) 13.6%F2010 $74.6 ($8.5) 11.4%F2009 $74.0 ($8.0) 10.7%F2008 $93.4 ($7.0) 7.5%F2007 $106.3 ($6.8) 6.4%($50.5)
AVERAGE OPERATING DRAW RATE11.2%
MINNESOTA ORCHESTRAL ASSOCIATIONENDOWMENT HISTORY

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