TO: Board of Directors FROM: Dennis Cheng, Director of Development & Philanthropy RE: Endowment Update DATE: December 7, 2012 Earlier this year, the Development Department began the critical first steps towards designing a comprehensive plan for building a permanent endowment for the Foundation. Our basic premise is as follows:

GOAL:

 The goal of the endowment campaign is to raise $250 million in unrestricted gifts and pledges by the end of 2016. The campaign will have three phases - the planning stage, the quiet phase, and the public phase. We hope to celebrate the completion of the campaign at the end of 2016, the year of President Clinton’s 70

th

 birthday.

RATIONALE:

Currently, the Foundation must raise at least $15 million per year in unrestricted funds to meet our annual operating costs and commitments to our various initiatives.  Assuming a 5% pay out, a $250 million endowment would cover the majority of the core operating costs in perpetuity, thereby guaranteeing the long-term sustainability of the Foundation.  Attached is a preliminary version of the case statement that is currently being used in our conversations with potential stakeholders.

PLANNING STAGE (July 2012 – December 2012):

 We enlisted a national fundraising consulting firm (CCS) to assist with this effort. Over the last six months, CCS has held strategic conversations with approximately 30 high-level prospects and potential stakeholders (see attached list) that include long-time and relatively new high-net worth supporters. These discussions were designed

 

to help craft a detailed campaign plan and shape a series of recommendations for the Foundation. Based on the issues raised and the feedback collected from the interviews, CCS is prepared to present their report and recommendations to the Board, beginning with 5 core questions that the Foundation must be prepared to address before we can move forward with the next phase of the process:

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 The future leadership of the Foundation

: Who will be the public face of the Foundation well into the future? Who will be the administrative leadership of the Foundation in the future?

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 The long-term vision of the Foundation

: What are the President’s priorities for the Foundation long-term? What will be the focus of its work? What is the Foundation’s long-term operating principle?

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Governance of the Foundation and the endowment fund

: Who will oversee the endowment fund? What is the composition and role of the Board going forward? Will the Board be expanded to include philanthropists?

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Use of the endowment funds

: How will the endowment funds be spent? How  will the funds be invested and managed?

 

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Internal buy-in and priority of an endowment campaign:

 Will the endowment be the top fundraising priority for the President, the family, the Foundation, and all of its initiatives? Will this be the “final ask” from the President?

NEXT STEPS:

CCS is prepared to present their key findings and recommendations to the Board,  which will also serve as an opportunity for the Board to begin addressing the questions above. It is critical that this meeting take place as soon as possible, so that we can finalize our campaign plan and begin soliciting pledges and commitments.

 

LIST OF ENDOWMENT INTERVIEWEES:

Name Status

 Alan Patricof Completed Bernard Schwartz Completed Bill and Tani Austin Completed Casey Wasserman Completed Eli Broad Completed Elias Bou Saab Completed Elizabeth Bagley Completed Frank Giustra Completed Elaine and Gerry Schuster Completed Gerardo Werthein Completed Haim Saban Completed J.B. Pritzker Pending Jay Snyder Completed John Emerson Completed Jonathan Lavine Completed Mack McLarty Completed Marc Lasry Completed Pedro Torres Completed Pete Peterson Completed Peter O'Keefe Completed Pierre Omidyar Completed Sandy Weill Completed Stan Shuman Completed Steve Bing Pending Susie and Mark Buell Completed Susie Buffett Completed Ted Waitt Completed Terry McAuliffe Completed