Re-imagining a land of opportunity

Transcription

Skill-building organizations • Welcome innovation • New information
• A l i g n e d b u s i n e ss e s / i n s t i t u t i o n s • I n c r e a s e d c i v i c e n g a g e m e n t •
V o i c e a n d v o t e • R o l e i n i n s t i t u t i o n a l a n d g o v e r n m e n ta l d e c i s i o n s
2007 highlights
Under Section 4940 of the Internal Revenue Code, the Foundation is
subject to a 2% excise tax on its taxable investment income received,
which principally includes income from investments plus net realized
capital gains. Net capital losses, however, are not deductible. Under certain
circumstances, the Foundation may qualify for a 1% excise tax rate. An
annual determination is made by the Foundation as to whether a 1% or 2%
rate is applicable in each year. The Foundation applied the 1% excise tax rate
for the current tax provision for the years ended March 31, 2007 and 2006,
respectively.
Deferred taxes result from certain income and expense items being
accounted for in different time periods for financial statement purposes than
for federal excise and income tax purposes. Deferred excise tax expense
(benefit) arises from the change in unrealized appreciation (depreciation)
in fair value of investments and accrued investment income. The deferred
excise tax provision (benefit) is calculated utilizing the 2% excise tax rate.
Use of Estimates
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
This annual update features stories about lessons learned and shared within
communities working to reduce poverty long term. Community efforts are
teaching us what works, and what doesn’t, to engage community members,
to adopt new perspectives, to ask tough questions, to identify and develop
their local strengths to reduce poverty and create opportunities to prosperity.
The work is hard, but communities tell us it’s worth the effort.
The Foundation’s international fixed income portfolio uses derivatives,
which are not considered hedges, to minimize foreign currency risks
through forward contracts. These contracts mature in less than 60 days. The
Foundation’s domestic portfolio uses options to minimize volatility; they are
marked to market each reporting period. Realized and unrealized gains and
losses related to the above instruments are recorded when they occur.
The following are Northwest Area Foundation highlights from the past
fiscal year:
5. Grants
Horizons program redesigned and scaled up. Having successfully completed a
pilot phase with 44 communities from 2003–2005, program leaders improved
the program for greater impact and expansion. More than 160 communities
in seven states enrolled in the program’s new phase. The 18-month rural
community leadership development program will run from 2006 –2008.
Grant activity for the years ended March 31, 2007 and 2006, is summarized
as follows:
2007
2006
Unpaid commitments at beginning of year $
201,212 $
493,242
Grant appropriations, net of cancellations
and refunds (*) 16,143,361 15,831,274
Payments (*) (16,324,573) (16,123,304)
Unpaid commitments at end of year
$
20,000 $
201,212
Four 2007 Great Strides Award winners selected. Brinnon/Quilcene,
Washington; Independence, Oregon; Westhope, North Dakota; and White
Earth Indian Reservation, Minnesota. The Great Strides Awards recognize the
successful efforts communities have made to date to reduce poverty long
term. Each winner is awarded $100,000 to be used for community benefit.
Communities are also offered an additional grant to help them share lessons
learned with the Foundation and other communities. (See page 9.)
(*) Does not include program-related investments
Conditional grants made where conditions have not yet been met totaled
$66,571,595 and $63,075,328 at March 31, 2007 and 2006, respectively.
Refined the Wage & Benefits Metric. A Web-based tool that is designed to
measure the quality of jobs a new or existing business would bring to a
community: full time with or without benefits, part time with benefits, or basic
jobs. Beta-tesed by 130 businesses and organizations across the country,
testers say the Metric makes it possible to arrive at information that was
previously hard to find and calculate. (See page 8.)
6. Federal Excise Taxes and UBIT Distribution Requirements and UBIT Provision
2. Investments
Net appreciation in fair value of investments for the years ended March 31,
2007 and 2006, consist of the following:
Year ended March 31, 2007
Net realized gains on sales of investments
$ 40,394,090
Net unrealized appreciation of investments
331,301
Net appreciation in fair value of investments
$ 40,725,391
$ 20,010,682
Net unrealized appreciation of investments 27,662,185
$ 47,672,867
3. Program-Related Investments
Federal excise taxes for the years ended March 31, 2007 and 2006, consist of
the following:
2007
2006
Federal excise tax provision (benefit)
Current
$
430,458 $
326,403
Deferred
(43,774)
459,880
UBIT provision
8,825 $
395,509 $
786,283
Held Grassroots & Groundwork: What Communities Are Doing to Get Out
and Stay Out of Poverty. More than 450 people attended the second national
conference to gather and share practical and proven strategies and tools
with histories of success for reducing community poverty. Keynote speakers
included former U.S. Labor Secretary Robert Reich, former space shuttle
Endeavor crew member Dr. Mae Jemison, author Beth Shulman, and Elouise
Cobell, executive director of the Native American Community Development
Corporation.
The Foundation is subject to the distribution requirements of the Internal
Revenue Code. Accordingly, it must make qualified distributions within
one year after the end of each fiscal year of at least 5% of the average
market value of its assets as defined to avoid an additional excise tax. The
Foundation has complied with these distribution requirements for the year
ended March 31, 2007.
N o r t h w e s t A r e a F o u n d at i o n
Annual Update 2007
Enhanced the Indicators Web Site. This user-friendly source of demographic
and social data was expanded from 36 to 47 different economic and poverty
indicators. The site offers data on health, labor, employment, education and
poverty for counties, reservations and tribes in the Foundation’s eight-state
region. One of the new indicators provides information on the creative class,
which includes people in occupations that require creativity, knowledge
and working ideas. These occupations would include architects, engineers,
musicians, librarians and social and physical scientists. Research shows a
high connection between the creative class and positive regional development
and growth. Attracting and retaining these workers may be a potential
development strategy. Visit www.indicators.nwaf.org.
Made Program-Related and Mission-Related Investments. Six new programrelated investments (PRIs) totalling $4.25 million were made. To date,
the Foundation has made 17 PRIs valued at $11.7 million to Community
Development Financial Institutions. Mission-related investments in the past
year totaled more than $724,395.
Published Native Entrepreneurship reports: “Nationwide & In South Dakota”
and “Native Entrepreneurship in South Dakota: A Deeper Look.” These
follow up the 2004 publication, “Native Entrepreneurship: Challenges and
Opportunities for Rural Communities,” which was prepared by CFED for the
Northwest Area Foundation. The first publication took a comprehensive look at
entrepreneurship opportunities on American Indian reservations.
Released second national survey on how Americans perceive neighbors
struggling to make ends meet. This national telephone survey of 4,000 found
that most respondents continue to see the struggle within their communities
and are concerned about it, that they are willing to take action to reduce the
number of those who are struggling, and that they want their locally elected
officials to take steps on this issue. Respondents also remain optimistic that
they can combat this situation. (See page 3.)
Launched NWAF Solutions Depot, an online store that offers practical tools,
strategies and case studies about what’s working to reduce poverty and
build prosperity in communities. The online warehouse is designed to help
communities find solutions, ideas and contacts. It also was created to promote
the products and services offered by funders, nonprofits and communities
nationwide. Organizations can submit their candidate products and services by
visiting the site and clicking on the “Share What Works” button. It’s fast and
easy. Browse the shelves at www.nwaf-solutionsdepot.org.
Program-related investments consist of the following at March 31:
Re-imagining a
land of opportunity
7. Capital Stock
2007
Midwest Minnesota Community
Development Corporation (debt)
$
970,000 $
Neighborhood Development Center (debt)
387,274 Montana Community Development
Corporation (debt)
367,924 First Children’s Finance* (debt)
328,125 CDC Bancshares (debt) 1,000,000 Grow Iowa Foundation (debt)
300,000 Idaho-Nevada Community Development
Financial Institution (debt)
700,000 RAIN Source Capital Corporation** (debt) 1,000,000 North Country Cooperative
Development Fund (debt) 1,000,000 NE Entrepreneur Fund (debt)
200,000 Northeast Ventures Corporation (debt)
18,805 Initiative Foundation (debt) 1,000,000 Seattle Economic Development Fund (debt)
750,000 South Dakota Rural Enterprise (debt)
500,000 Calvert Social Investment Foundation (debt)
500,000 Alaska Growth Capital (debt)
500,000 Northland Foundation (debt) 1,000,000 10,522,128 Interest receivable (at varying rates up to
3.25% and maturities through 2020)
41,075 $ 10,563,203 $
2006
985,000
413,427
395,281
375,000
1,000,000
300,000
700,000
1,000,000
1,000,000
200,000
30,000
6,398,708
20,404
6,419,112
Trustees, directors and Staff
Included in unrestricted net assets are 10 shares of capital stock. Under the
terms established in the Foundation’s by-laws, these 10 shares of capital
stock have a zero par value. The five trustees hold all 10 shares as a unit.
(Individuals do not hold separate identifiable shares.) No dividends are paid
on these shares, nor do any net earnings of the Foundation benefit any
stockholder.
4. Use of Financial Instruments
The Foundation’s investment strategy incorporates certain financial
instruments, which involve, to varying degrees, elements of market risk and
credit risk in excess of amounts recorded in its financial statements. These
financial instruments may include equity, fixed income and foreign currency
futures and options contracts, and foreign currency forward contracts.
The Foundation uses derivatives to minimize the exposure of certain of
its investments to adverse fluctuation in financial and currency markets,
thus reducing portfolio risk. The Foundation has not designated any of its
derivative financial instruments as hedging instruments.
Market risk represents potential loss from the decrease in the value of
off-balance-sheet financial instruments. Credit risk represents potential
loss from possible nonperformance by obligors and counterparties on the
terms of their contracts. Management does not anticipate that losses, if any,
resulting from credit or market risk would materially affect the Foundation’s
financial position.
Staff
Terrence W. Glarner
St. Paul, MN
Millie Acamovic, Vice President of Finance
and Administration & CFO
(651) 225-3897 / macamovic@nwaf.org
Patrick Ciernia, Community Activities
Support
(651) 225-7706 / pciernia@nwaf.org
Deanna Arce, Community Activities
Assistant – Horizons
(651) 225-3879 / darce@nwaf.org
Diane Corey, Executive Assistant to
the President
(651) 225-3866 / dcorey@nwaf.org
Beth Boldt, Receptionist
(651) 224-9635 / bboldt@nwaf.org
Gary Cunningham, Vice President of
Programs, Chief Program Officer
(651) 225-3868 / gcunningham@nwaf.org
Linda L. Hoeschler
St. Paul, MN
8. Program-Related and Nonprogram-Related Administrative Expenses
Thomas J. Horak
St. Paul, MN
Program-related expenses relate to control and evaluation of grants,
direct program services provided through the Foundation, as well as the
salaries and expenses required to run the programs. Nonprogram-related
administrative expenses include all expenses incidental to operating the
organization.
Rodney W. Jordan
Minneapolis, MN
Nicholas Slade
Minneapolis, MN
Directors
9. Employee Pension Plan
Dorothy Bridges, Vice Chair
Minneapolis, MN
The Foundation has an employee pension plan operated as a self-funded
money purchase plan. This is a defined noncontributory plan available to
all employees who work a minimum of 1,000 hours per year, following one
full year of service. The plan provides for an annual contribution of 11% of
each eligible participant’s earned compensation up to the IRS permissible
maximum of $210,000. Contributions to the plan for the years ended March
31, 2007 and 2006, were $224,171 and $228,512, respectively.
Elouise Cobell
Browning, MT
Louis F. Hill
St. Paul, MN
Patricia Jensen
St. Paul, MN
10. Lease Commitments
*Formerly known as Development Corporation for Children
**Formerly known as Minnesota Investment Network
Trustees
Daniel Kemmis, Chair
Missoula, MT
In March 2001, the Foundation entered into a 10-year noncancellable
operating lease for office space, which commenced on May 6, 2002. Under
this lease agreement, the Foundation pays operating costs for the leased
property. This lease agreement has renewal options for up to 10 additional
years. Total rent expense was $229,186 for each of the years ended March
31, 2007 and 2006, net of amortization of the leasehold incentives of $53,304
for each of the years ended March 31, 2007 and 2006.
Fr. Kevin McDonough
St. Paul, MN
Elsie Meeks
Rapid City, SD
Natalie Camacho
Mendoza, Boise, ID
Sally Pederson
Des Moines, IA
Future minimum rental payments at March 31, 2007, are as follows:
William Thorndike, Jr.
Medford, OR
Fiscal Years Ending
2008
$
282,490
2009
282,490
2010
282,490
2011
282,490
2012
282,490
Thereafter
23,541
$ 1,435,991
Sandra Vargas
Minneapolis, MN
Sarah Vogel
Bismarck, ND
Design: Thebe Street
www.thebestreet.com
Photography: Steve Wewerka
www.stevewewerka.com
17
Dianne Biever, Assistant to the Vice
President of Finance and Administration
& CFO
(651) 225-3864 / dbiever@nwaf.org
Tony Genia, Community Liaison
(651) 225-3878 / tgenia@nwaf.org
Jessica Bower, Community Activities
Assistant – Ventures
(651) 225-3885 / jbower@nwaf.org
Catherine Glover, Assistant to the Vice
President of Programs, Chief Program
Officer
(651) 225-3884 / cglover@nwaf.org
Susan Buckles, Public Relations Specialist
(651) 225-3865 / sbuckles@nwaf.org
Kerstin Gorham, Learning Liaison
(651) 225-3862 / kgorham@nwaf.org
Sylvia Burgos Toftness, Communications
Lead
(651) 225-7704 / sburgos@nwaf.org
Heidi Grandstrand, Grants & Contracts
Administrator
(651) 225-3893 / hgrandstrand@nwaf.org
Jean Burkhardt, Horizons Lead
(651) 225-7718 / jburkhardt@nwaf.org
Michelle Grosz, Manager, Grants &
Contracts
(651) 225-3871 / mgrosz@nwaf.org
John-Paul Chaisson-Cárdenas,
Connections Product Development
Manager
(651) 225-3874 / jcardenas@nwaf.org
Amy Highness, Community Activities
Support
(651) 225-3869 / ahighness@nwaf.org
Mikael Carlson, Community Activities
Support
(651) 225-7710 / mcarlson@nwaf.org
Lynette LaFontaine, Community Activities
Assistant – Connections
(651) 225-3889 / llafontaine@nwaf.org
Isabel Chanslor, Associate Community
Liaison II
(651) 225-3860 / ichanslor@nwaf.org
Ruby Lee, Horizons Program Manager
(651) 225-3891 / rlee@nwaf.org
60 Plato Boulevard East
Suite 400
St. Paul, Minnesota 55107
Tel: (651) 224-9635
Fax: (651) 225-7701
www.nwaf.org
And then there are the communities who are
warming things up all across this country. They
are setting direction, taking action and generating
valuable fire. They are daring to dream big and
differently.
Tony LookingElk, Community Liaison
(651) 225-3863 / tlookingelk@nwaf.org
Karla Miller, Connections Product
Development Manager
(651) 225-3880 / kmiller@nwaf.org
Khanh Nguyen, Research Associate
(651) 225-7716 / knguyen@nwaf.org
Mary Olson, Community Activities Support
(651) 225-3898 / molson@nwaf.org
Marie Podratz, Office Manager
(651) 225-3877 / mpodratz@nwaf.org
Megan Rooney, Accounting Associate
(651) 225-3887 / mrooney@nwaf.org
Kari Schlachtenhaufen, Interim President
& CEO
(651) 225-3876 / kari@nwaf.org
Jim Sisson, Human Resources Lead
(651) 225-3886 / jsisson@nwaf.org
Jerry Uribe, Horizons Program Manager
(651) 225-3873 / juribe@nwaf.org
Elladean Wikstrom, Community Liaison
(651) 225-7702 / ewikstrom@nwaf.org
Lisa Williams, Project Coordinator/
Communications Assistant
(651) 225-7651 / lwilliams@nwaf.org
Mary Vang, Manager, Information
Technology
(651) 225-3867 / mvang@nwaf.org
Melissa Yauk, Resource Center Librarian
(651) 225-7652 / myauk@nwaf.org
The air is filled with it: debate and conversation,
statements and questions about what it takes to
keep our country successful. The issues shout to
us from inch-high newspaper headlines. Attentiongrabbing television newscasts give us 60-second
stories on problems that were decades in the
making.
Take Bridgeport, Washington, for example. It is one
of hundreds of small rural communities who have
decided to wrest their futures out of the hands of
the naysayers and shake off the negative labels.
Residents are attacking poverty and economic
decline at its roots, and inventing new prospects
for a town greatly changed by demographic shifts.
They are creating new on-ramps for opportunity, a
chance for prosperity for all its citizens.
They are not waiting to be saved.
It isn’t hard to list the top issues: global
competition, the war, moving jobs off shore, loss
of living-wage jobs, urban blight, the alleged
disappearance of rural America, the relevance of
U.S. agriculture, immigration, food safety, global
warming, health-care disparities, and education
inequities, among others.
These topics keep policy-makers in hot debate. It’s
what news editors chew on as they scramble to fill
a ravenous 24-hour news hole.
It’s frantic, loud and usually negative. At times it
sounds a bit like Henny Penny crying, “The sky
is falling, the sky is falling!” Lots of thunder and
lightning; very little heat.
The Turtle Mountain Band of Chippewa in North
Dakota is one of many American Indian reservation
communities developing new understanding and
action to build economic success interwoven with
cultural grounding. Tribal members see poverty
as much more than lack of income. They describe
a successful community as one that appreciates
the values and sacrifices of previous generations,
works in harmony with the environment, and
understands that decisions made today will
significantly affect generations to come.
They are architects bent on positioning their
communities to move from poverty to prosperity
by implementing innovative strategies linked to
values that reclaim the best of what they have been.
Contents
Growing Opportunities . . . . . . . . . . . . . . 2
Increased Community Capacity . . . . . . . . . 4
Asset Identification and Development . . . . . 6
Expanded Economic Opportunities . . . . . . . 8
Inclusive Decision Making . . . . . . . . . . . 10
Our Programs . . . . . . . . . . . . . . . . . . . 12
Program Facts . . . . . . . . . . . . . . . . . . 13
2007 Financial Overview . . . . . . . . . . . . 14
2007 Highlights . . . . . . . . . . . . . . . . . . 18
Trustees, Board and Staff . . . . . . . . . . . . 18
They are reshaping their framework. They are
redefining success.
Thirteen neighborhoods in north Minneapolis
exemplify this same deep focus in urban areas.
Joined together in an organization called NorthWay
Community Trust, they are linked in a 10-year
partnership working to break deep and pervasive
cycles of poverty and short-term responses.
NorthWay taps the energies of the public and
private sectors to instigate integrated solutions
around education, health-care, affordable housing,
job readiness and living-wage jobs.
They will not let others define their possibilities.
They believe their collective efforts are opportunities
for lasting benefit.
There are hundreds of communities daring to
imagine a better land of opportunity for themselves
and their children. They know the work is long,
and hard, and that they may stumble on a road
they are building as they walk upon it. Thanks to
their work today, tomorrow promises to be a better
place for more of us, especially those struggling to
get out, and stay out, of poverty.
While success will evade some and will be
different in each community, valuable lessons will
come from each of them. The Northwest Area
Foundation is committed to sharing these practical
lessons with any community or organization that
wants to reduce poverty long term. Visit www.
nwaf-solutionsdepot.org to learn more.
Skill-building organization s • Welcome innovation • New information
V o i c e a n d v o t e • R o l e i n i n s t i t u t i o n a l a n d g o v e r n m e n ta l d e c is i o n s
growing Opportunities
Financial Statements
“The last 10 years have
been a lesson in community
courage in the face of
change. I am very grateful
for the changes we
have made together.”
W
Karl N. Stauber
When does real growth begin to happen? While there have been hundreds of
books written to address this question, it calls up a short saying I heard long
ago: It starts when we see the pain of staying the same is greater than the pain
of change.
The status quo is what we love to complain about, but we are afraid to abandon.
The fact remains, however, that even when we have a clear picture of what we
want, we may hesitate because of the risks ahead. Choosing a new path requires
navigating new relationships, building different skills, or learning a new culture
or language. Along with the opportunities for success, come risks and stumbles.
Communities can spiral up or spiral down. Many factors determine the direction
and rate of that rise or fall, and its ultimate impact. A community loses a major
employer and, when viewed through a short-term lens, this is seen as a downhill
slide. But given the passage of five years, the community can develop other
businesses, and become more diverse and stable; it can spiral up.
The last 10 years have been a lesson in community courage in the face of
change. As CEO and president of the Northwest Area Foundation, I’ve had the
honor of working with communities that have called up the will to move from
growing poverty to growing opportunities. This work is neither fast nor easy.
Given some technical assistance, these communities seized the opportunity
to evaluate their strengths and weaknesses and have decided that they just
don’t want to stay where they are. Instead they set goals and instigated deep
transformation. That takes grit, perseverance and energy, and patience and
imagination.
Over the past eight years, 10 communities have entered into 10-year partnerships
with the Northwest Area Foundation. Spread across our eight-state service
region, they represent a wide range of approaches and conditions. (See page 12.)
Each is implementing a self-developed strategic plan to reduce poverty long
term and promote prosperity, especially for those in the lowest economic
20 percent.
These are large and ambitious efforts that are locally owned. Each strives to
create public and private collaborations that will yield lasting change. Each
works to bring diverse voices into decision making; to build upon assets; to
build community skills, knowledge and contacts; and develop foundational
economic opportunities.
Add to these efforts the thousands of communities and nonprofits hungry
for proven solutions. Hundreds of these community members have attended
the Foundation’s Grassroots & Groundwork conferences, events that feature
community case studies with histories of success. Similarly, successful community
transformation is being honored and shared through the Foundation’s Great
Strides Awards, as well as through other products and services.
Statements of Cash Flows
For the years ended March 31, 2007 and 2006
To the Board of Directors of Northwest Area Foundation
PricewaterhouseCoopers LLP
Minneapolis, Minnesota
May 17, 2007
Statements of Financial Position
There is also a new tool communities and organizations are using to find – and
share – tested approaches. NWAF Solutions Depot (www.nwaf-solutionsdepot.
org) is an online warehouse of practical tools and strategies for long-term
poverty reduction.
This is a good time for change – for communities, for the Foundation, and for
me. By the time this publication reaches you, I will have left the Foundation
after nearly 20 years with the organization, the last 11 years of which I served
as president and CEO.
Soon after becoming president, I joined with the board of directors to examine
the impact of our grant dollars. We determined that we needed to focus our
efforts if we wanted to making deep and lasting change. In 1998, the Foundation
adopted a new mission – helping communities reduce poverty. We also initiated
a new approach – working with entire communities so that they could design,
lead and implement lasting change.
Nearly nine years into this new direction, I can safely say that this has required
large change within the Foundation and within the communities we serve. This
has not come without discomfort, unease, hard work and missteps. Thanks to
the work of staff, public and private partners, and community members, I can
also point to important achievements and key lessons learned.
Although my intimate involvement with the Foundation ends now, I am assured
by the board of directors, staff and communities that the work will continue,
and that evaluation and course corrections will be made.
I, too, see change as necessary for a bright, next chapter. On August 1, I assume
the role of president and CEO of the Danville Regional Foundation, in Danville,
Virginia. Danville Regional is a one-year-old organization that seeks to improve
the health, welfare and education of the residents of Virginia’s Danville,
Pittsylvania and Caswell counties.
I will take the best of what I’ve learned at the Northwest Area Foundation to my
new position and new community. I am very grateful for the changes we have
made together.
Remember, take the actions needed to spiral upwards. Each act, positive or
negative, will influence your community. Make it positive and your community
will grow prosperity.
Karl N. Stauber
President and CEO
Kari Schlachtenhaufen named interim president & CEO
Kari Schlachtenhaufen, J.D., joined the Foundation as interim president
and CEO in July 2007, bringing over 25 years of nonprofit experience
to the organization as its board of directors conducts a search for a
permanent replacement for Karl Stauber.
Schlachtenhaufen is a past president of the Skillman Foundation, of Detroit,
Assets
Cash
Receivable for securities with settlements pending
Accrued investment income
Investments, at fair value (cost value: 2007 - $424,944,915; 2006 - $403,885,447)
Temporary cash investments
Fixed income
Domestic equities
International equities
Absolute return strategies
Private equities
Total investments
Program-related investments
Other assets
Leasehold improvements, furniture and equipment, net of accumulated depreciation
and amortization of $2,777,085 and $2,436,649 in 2007 and 2006, respectively
Total assets
2006
$133,839 3,500,000 673,883 $535,374
592,394
773,123
Cash flows from financing activities
Outstanding checks pending deposits in transit
- Net cash used in financing activities
- Net (decrease) increase in cash
(401,535)
4,574,386 6,938,575
99,810,536 97,479,962
163,159,257 168,543,013
73,512,734 77,699,893
124,051,017 112,130,898
18,596,503 10,431,391
483,704,433 473,223,732
10,563,203 6,419,112
147,799 136,231
Cash
Beginning of year
End of year
Supplemental disclosures of cash flow information
Supplemental disclosure of noncash investing transactions
Change in receivable for securities with settlements pending
Change in payable for securities with settlements pending
Cash paid for federal excise taxes
1,342,526 1,628,594
$500,065,683 $483,308,560
1. Organization and Significant Accounting Policies
Northwest Area Foundation (the “Foundation”) is a private foundation
incorporated under the laws of Minnesota. The Foundation exists to
help communities in its eight-state region reduce poverty by providing
knowledge, financial resources (including grants), products, and services.
Basis of Presentation
In the financial statements, net assets that have similar characteristics have
been combined into categories as follows:
Statements of Activities and change in Net Assets
•Temporarily restricted - Net assets whose use by the Foundation is subject
to donor-imposed stipulations that can be fulfilled by actions of the
Foundation pursuant to those stipulations or that expire by the passage of
time.
Unrestricted
Revenues
Dividends
Interest
Other
Total revenues
Expenses
Program
Grants appropriated, net of
cancellations and refunds
Program-related administrative
Administrative
Nonprogram-related administrative expenses
Investment and related fees
Federal excise tax & UBIT provision Total expenses
Change in net assets
2007
2006
Permanently Permanently
Restricted
Total Unrestricted
Restricted
$1,668,250 5,629,498 40,725,391 177,379 48,200,518 $1,668,250 5,629,498 40,725,391 177,379 48,200,518 $7,931,435 8,422,878 47,672,867 10,627 64,037,807 •Permanently restricted - Net assets subject to donor-imposed stipulations
to be maintained permanently by the Foundation. The donors of these
assets permit the Foundation to use all of the income earned on these
investments.
Total
$7,931,435
8,422,878
47,672,867
10,627
64,037,807
16,143,361 4,982,261 16,143,361 4,982,261 15,831,274 5,048,973 15,831,274
5,048,973
3,144,411 5,027,750 395,509 29,693,292 18,507,226 3,144,411 5,027,750 395,509 29,693,292 18,507,226 2,931,420 4,408,592 786,283 29,006,542 35,031,265 2,931,420
4,408,592
786,283
29,006,542
35,031,265
Expenses are generally reported as decreases in unrestricted net assets.
Cash
Cash represents funds held for use in the operations of the Foundation with
original maturities of three months or less. Temporary cash investments held
by investment managers are classified as a component of investments.
Investments
Investments are stated at market value and include accrued income. The
value of publicly traded securities is based upon quoted market prices and
net asset values. Other securities, for which no such quotations or valuations
are readily available, are carried at fair value as estimated by management
using values provided by external investment managers. The Foundation
believes that these valuations are a reasonable estimate of fair value as of
March 31, 2007 and 2006, but are subject to uncertainty and therefore, may
differ from the value that would have been used had a ready market for the
investments existed.
Net assets
Beginning of year 468,848,436 $10,324,294 479,172,730 433,817,171 $10,324,294 444,141,465
End of year $487,355,662 $10,324,294 $497,679,956 $468,848,436 $10,324,294 $479,172,730
Changes in fair value are recorded as unrealized gains or losses in the period
of change. Realized gains and losses on sales of securities are generally
determined using the average cost method.
Michigan, and most recently was vice president of corporate affairs for
Ovations, a division of United Health Group.
60,272
$535,374
$2,907,606 $(5,505,070)
(1,240,494)
1,394,961
468,000 249,000
Notes to financial statements
•Unrestricted - Net assets that are not subject to donor-imposed
stipulations.
535,374 $133,839 (6,069,426)
(6,069,426)
475,102
The accompanying notes are an integral part of the financial statements.
Liabilities and Net Assets
Liabilities
Accounts payable and other liabilities
$598,896 $824,989
Payable for securities with settlements pending
154,467 1,394,961
Unpaid grant commitments
20,000 201,212
Leasehold incentives
275,364 328,668
Federal excise tax payable, including deferred
1,337,000 1,386,000
Total liabilities
2,385,727 4,135,830
Net assets
Unrestricted 487,355,662 468,848,436
Permanently restricted 10,324,294 10,324,294
Total net assets 497,679,956 479,172,730
Total liabilities and net assets $500,065,683 $483,308,560
2006
Cash flows from investing activities
Proceeds from sales of investments 148,825,960 128,653,008
Purchases of investments (122,729,370) (109,802,297)
Purchases of leasehold improvements, furniture and equipment
(54,367)
(175,802)
Net cash provided by investing activities 26,042,223 18,674,909
2007
2007
Cash flows from operating activities
Change in net assets $18,507,226 $35,031,265
Adjustments to reconcile change in net assets to net cash used in operating activities
Depreciation and amortization
340,435 350,194
Amortization of leasehold incentives
(53,304)
(53,304)
Net appreciation in fair value of investments (40,725,391) (47,672,867)
Deferred excise taxes
(49,000)
496,000
Change in other operating assets and liabilities
99,240 436,547
Other assets
(11,568)
23,738
Program-related investments (4,144,091)
(717,413)
(226,093)
267,489
(181,212)
(292,030)
Net cash used in operating activities (26,443,758) (12,130,381)
In our opinion, the accompanying statements of financial position and the related statements of activities and change in net assets and of cash flows present
fairly, in all material respects, the financial position of Northwest Area Foundation (the “Foundation”) at March 31, 2007 and 2006, and the change in its net
assets and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. These financial
statements are the responsibility of the Foundation’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for
our opinion.
These partnerships foster integrated efforts to attack root causes and policies,
systems and structures that block access to education, health-care, affordable
housing, living-wage jobs, markets and resources.
Then there are the over 150 small rural communities now participating in
the Foundation’s Horizons program, which delivers 18 months of leadership
development coaching right into each community. Each community sees
the need to change in order to reverse a history of economic decline and
demographic challenge.
Report of Independent Auditors
15
Program-Related Investments
Program-related investments consist of debt positions in organizations
that conduct activities that fulfill the charitable purposes of the Foundation.
Program-related investments are initially recorded on the Statement of
Financial Position at cost when approved. Uncollected interest earned on
program-related investments with a debt position is recorded as earned
and included in the investment account. These investments are recoverable
over periods ranging up to 15 years. In the event that a program-related
investment is subsequently determined to be uncollectible or the value is
permanently impaired, the Foundation may record the uncollectible amount
as a grant appropriation or record an impairment reserve. During the period
ended March 31, 2007, there were no valuation adjustments or write-offs,
nor were there any value write-downs for impaired debt holdings. New
program-related investments totaling $4,250,000 were distributed in the
fiscal year ended March 31, 2007.
Accrued Investment Income
Accrued investment income includes interest and declared dividends not yet
received. Interest income is recorded in the period in which it is earned, and
dividend income is recorded on the ex dividend date.
Leasehold Improvements, Furniture and Equipment
Leasehold improvements, furniture and equipment are stated at cost, less
accumulated depreciation and amortization. Depreciation is provided on a
straight-line basis over the estimated useful lives of the respective assets
ranging from 3 to 10 years. Amortization of leasehold improvements is
recorded on a straight-line basis over the shorter of the lease term or the
estimated useful life of the improvement.
Leasehold Incentives
In May 2002, the Foundation received $533,000 from its landlord for
leasehold improvements. This amount has been deferred and is being
amortized over the lease term of 10 years.
Grants
Grant appropriations are charged to unrestricted net assets at the time the
grants are approved by the CEO/President of the Foundation subject to
the guidelines set forth by the Board of Directors. Conditional grants are
recognized as grant appropriations in the Statement of Activities and Change
in Net Assets when the conditions are met. Cancellations of grants occur
when the grantees do not meet the grant terms. Grants are refunded when
grant program needs are less than the appropriated amount.
Federal Taxes
The Foundation qualifies as a tax-exempt organization under Section
501(c)(3) of the Internal Revenue Code and is not subject to federal income
taxes except for income from its unrelated business activities.
16
• Aligned businesses/institutions • Increased civic engagement •
• P o o r h av e p l a c e at ta b l e • C o m m u n i t y i n t e g r at i o n • S h a r e d v i s i o n
• We belie ve •
•
Nine years ago the Northwest Area Foundation adopted a new, focused mission: helping communities reduce poverty.
This is grassroots work fueled by an insistent vision: that communities struggling with deep and persistent
poverty will have a chance to reclaim their destinies and rebuild opportunities for all to prosper.
OUR MISSION is anchored in beliefs that drive our programs, relationships and investments:
Poverty is unacceptable
Communities want to prosper
We have a responsibility
Engaging entire communities
Poverty is unacceptable. At last report, 37 million
people lived below the federal poverty threshold in
America. Persistent poverty is a cancer in our nation,
eroding the quality of life for individuals and entire
communities every day, every year.
We have a responsibility to do something about this,
and we know we cannot do it alone.
Communities own their future
Poverty-reduction initiatives have a greater chance
of success if they are owned by the community.
Communities have the perspective, ideas, energy
and commitment necessary for successful,
sustainable poverty reduction.
Thousands of communities want to move from poverty
to prosperity and are hungry for practical, proven solutions.
Some technical and financial assistance allows them to
implement these tools.
The role of the Northwest Area Foundation is to engage
entire communities, and to provide them with technical and
financial assistance so that they can build the skills, knowledge
and connections they need to design, lead and implement
sustainable poverty-reduction strategies. This approach is
neither fast nor easy – for communities or for the Foundation.
Sharing lessons learned
The Northwest Area Foundation can best reach its vision
and multiply the impact of its investments by sharing
lessons learned, tested strategies and proven tools with
other communities.
The Northwest Area Foundation realizes its mission through three programs and two investment strategies.
These are described in detail on page 12 of this Annual Update and on the Foundation’s Web site, www.nwaf.org.
Americans see neighbors struggling to make ends meet
In early 2007, the Foundation commissioned
a second national telephone survey to
ask Americans how they perceive people
struggling to make ends meet within their
own communities. “Our work over the years
has taught us that people are willing to
come together to do some very hard work
– confronting poverty, building common vision,
and taking action to create better opportunities
for everyone, and particularly those who are in
deepest poverty,” said Foundation president
and CEO Karl Stauber.
“We initiated the survey to learn if this
willingness to tackle poverty was more broadly
held. The results of that first national poll
(released 2006) and this second survey tell
the story: people continue to see the struggle
within their own towns, they’re willing to do
something about it, and they believe their
locally elected officials have a very important
roll to play,” said Stauber.
Survey results, released in April 2007, revealed
consistent responses:
eHalf of all Americans believe a lot of people
are struggling to make ends meet in their
communities, and four in 10 say a lot of
people who are struggling work full-time
jobs.
For the full survey report and briefs for policymakers, visit www.nwaf.org and click on
“Resources.”
eSeven in 10 say a family of four needs
$40,000 or more to make ends meet, which is
a slight increase from the 64 percent who said
the same thing in 2006.
eNearly half of the public
say helping those who are
struggling to make ends meet
in their community is a top
priority.
eThere was a very slight
increase – six points – in the
percentage of respondents
who say that when voting, they
will be mindful of how well a
candidate would help those
who are struggling to make
ends meet (76 percent vs.
70 percent in 2006).
There are people in my community who are willing to
help those who are struggling.
6%
3% 3%
44%
44%
d
d
d
d
d
Strongly agree – 44%
Somewhat agree – 44%
Somewhat disagree – 6%
Strongly disagree – 3%
Don’t know/No response – 3%
IncreaseD community capacity
Save the date!
Grassroots & Groundwork:
What’s Working to Reduce Poverty
and Build Community Prosperity
May 28–30, 2008
Sheraton Bloomington Hotel
Bloomington, Minnesota
The Northwest Area Foundation will host its
third national Grassroots & Groundwork
conference May 28–30, 2008, in Bloomington,
Minnesota, just minutes from downtown
Minneapolis and St. Paul. The three-day
event will highlight practical and proven
poverty-reduction approaches as presented
by the communities doing this hard work.
The conference will also feature exciting
keynote speakers and lots of networking
opportunities.
Ideas shared at past conferences are now at
work in new locations. Come and share your
stories about what’s working to reduce poverty
and create prosperity in your community.
Visit www.grassrootsandgroundwork.org
to find out more.
Photo from Walla Walla, Washington, another community increasing its capacity for lasting change.
• Aligned businesses/institutions • Increased civic engagement
Building community capacity means acquiring and
“During one meeting, we discovered that three different groups were working
on welcome signage for the community. Now we’re working together,” said
another resident.
strengthening the skills, knowledge, connections and
organizations needed to successfully design, lead and
implement fundamental change. This is one of the four
community-level outcomes we believe communities must
pursue to achieve long-term poverty reduction.
“Good Morning Orofino’s” success prompted spin off gatherings of health
and welfare organizations that seek ways to better serve those living in poverty.
Orofino has seen a nine percent increase in the town’s population and a
31 percent increase in per capita income from 1989 to 2004, a trend poised
to continue based on the efforts of the community to work together to
move forward.
Lesson Learned:
Partnerships are critical
Poverty is about gaps in basic needs: food, clothing, shelter, education,
health-care and job training. Each of these typically is addressed separately
by a variety of public and private organizations working on their own.
Lesson Learned:
Communities intent on attacking the root causes of poverty are entering
unconventional relationships that bring together government services, civic
and faith-based organizations, the resources of funders, and the experiences
and energies of those who live in deep poverty.
Linking arms with the National Park Service
Elk River, Idaho, hugs a back-country highway that winds its way through the
spectacular Clearwater National Forest. This town of 142 people is beautiful
and remote. A former mining and logging town, Elk River saw the Foundation’s
Horizons program as a way to build its abilities to shape a better future.
Community members credit new partnerships with bringing rapid and
sustainable change to this town. It teamed with the National Park Service in
an effort to capitalize on its natural beauty, tap into the tourism industry and
attract more business. For example, just two miles from the town’s main street
lies a popular trailhead for Elk Creek Falls, a dramatic waterfall that plunges
over 300 feet.
Prior to making improvements, residents were frustrated because “a lot of people
[would] go to the falls and turn around and go back home without ever visiting
Elk River because they don’t even know we’re here,” lamented one resident.
By working with the National Park Service,
the community was able to construct
an interactive kiosk near the trailhead
that provides information about Elk
River businesses and services, a nearby
campground and the area’s natural resources.
Communities will take action if given an
effective structure
Communities who want to reduce poverty long term often wonder where
to begin. These communities can make significant strides when given the
opportunity to move through a set of tested steps and when coached
for leadership.
In addition, coaching brings the encouragement that inspires community
members toward action. It helps them understand and overcome barriers
to prosperity.
Community coaching: providing a blueprint for
community change
Mention the word coaching, and what often comes to mind is someone on an
athletic field guiding players toward success. Coaching is now being used in
many new and different ways.
Community coaching is becoming an increasingly effective way to build
capacity to design, lead and implement change. For instance, Northwest Area
Foundation has contracted with seven institutions – colleges and university
extension services – to coach the 150+ small rural towns participating in the
Horizons leadership development program to reduce poverty.
“Horizons helped get some ideas finished because
the program brought out more players to finish
many of the projects already in progress.”
— Horizons participant
1+1=3
For years, the various community groups in Orofino, Idaho, operated separately
with very little communication or cooperation among them. After participating
in the Foundation’s Horizons program, they began recognizing the value of
working together.
When coaching is used on an institutional level, it builds the capacity of
entire regions to make fundamental change to move communities forward.
It’s a strategy used to develop leaders that can help own and lead povertyreduction strategies.
“Horizons helped get some ideas finished, because the program brought out
more players to finish many of the projects already in progress, but moving
slowly,” said one resident.
As developed for the Horizons program, the coaching focuses on relationships,
results, reflection and reach. Helping communities create and support new
and lasting relationships is often at the crux of effective initiatives. The aim
is to expand participation in decision making, particularly among groups
that have been left out in the past. Coaches help clarify goals, identify action
steps, set milestones, access resource possibilities and monitor the pace of the
community’s change efforts. Coaching for reflection involves helping a town
move from status quo to envisioning the possibilities for the future. Leaders
coached to expand reach help their communities develop a clear idea of where
the group wants to go and how to achieve that goal.
Community groups, governmental agencies and businesses formed “Good
Morning Orofino” – a quarterly breakfast meeting of 73 organizations. The
result has been pooled resources, new partnerships and a new communitywide calendar of events.
Tools you can use
This is a sampling of practical tools you can use to help increase community capacity for poverty reduction:
On Getting Out – and
Staying Out – of Poverty:
The Complex Causes of and
Responses to Poverty in the
Northwest
This report examines the causes and the
complex nature of poverty in Minnesota, Iowa,
North Dakota, South Dakota, Montana, Idaho,
Oregon and Washington. This report also
describes the effectiveness of various
poverty-reduction efforts.
www.nwaf.org/content/files/finalreport.pdf
LeadershipPlenty®
NWAF Solutions Depot
A curriculum that helps communities focus
on developing civic leadership.
An online warehouse of tools to
reduce poverty.
Through this program, communities learn
to understand the leadership structure and
skills needed to address poverty and sustain
community action and change over time.
LeadershipPlenty® is a curriculum developed
by the Pew Partnership for Civic Change, a civic
research organization that provides consulting
and program support to communities to help
them identify and implement solutions and
strategies that make them stronger.
Browse a virtual warehouse of practical tools,
tested strategies and case studies about
community poverty reduction and prosperity
building. You can help stock the shelves.
Just visit the store and click on the button that
says “Share What Works.” We’d like to link to
your stories and products with histories of
successful poverty reduction.
www.nwaf-solutionsdepot.org
www.pew-partnership.org
Asset identification and development
NWAF Solutions Depot: An Online Warehouse of Tools to Reduce Poverty
NWAF Solutions Depot is a virtual warehouse
of poverty-reduction solutions. It’s a pool of
practical case studies, online calculators, data
bases, publications, how-to manuals, plans
and tools.
Web interactivity makes it possible to easily
locate solutions from a wide range of sources.
Users can search by category or use the
site’s search engine. Whether communities
are looking to build their local economy or
find ideas for affordable housing, the online
catalog can provide approaches to evaluate
and replicate.
The Web site is designed to grow. Users are
invited to help stock the shelves with their
tools, strategies and solutions that have track
records of success. Click on the “Share What
Works” button to submit publications, data
bases, case studies or other products – as a
PDF file or a Web link.
Log on to NWAF Solutions Depot at
www.nwaf-solutionsdepot.org.
Photo from Brinnon and Quilcene, Washington, another community identifying and developing its assets.
People everywhere want to live in a place where
they can thrive, yet there are thousands of communities
with persistently high rates of poverty. Poverty’s very
nature – its complexity – makes it tough to tackle.
It wears different faces: the growing roster of free or
reduced-cost lunches at local schools, lack of affordable
health-care or housing, the chronically unemployed, the
person holding multiple jobs, or isolation from social
supports. Poverty exists in every type of community: urban,
rural, suburban and American Indian reservations.
The Foundation is working with communities to help them
lift up another set of qualities – local assets that can help
them move from poverty to hope.
Lesson Learned:
Communities can address poverty head-on
This lesson gained definition during the pilot phase of the Foundation’s
Horizons program (2003–2005). Horizons is an 18-month leadership
development program whose purpose is poverty reduction. It focuses on
small rural communities with populations
of 5,000 or fewer, and with histories
of economic decline and significant
population change.
Lesson Learned:
With a bit of help, communities can identify
local assets to drive poverty-reduction efforts
Making structural changes aimed at reducing poverty requires a deep look at
local strengths and weaknesses. It demands a willingness to re-examine the
structures, processes and people of your town. Communities can choose from
a wide range of tools – some simple and others complex – to reveal assets that
can be developed to reduce poverty and build prosperity.
Harvesting the sea
The paired towns of Brinnon and Quilcene along the Olympic Peninsula of
Washington State were once thriving timber towns. As that industry waned
in the 1990s, jobs disappeared and wages fell. While some residents felt
prosperity had passed them by, others were not willing to cede hopes for a
brighter future. Over a 10-year period, they looked to boost their economy by
building business around aquaculture, and specifically, the ocean farming of
sea oysters and clams.
Aquaculture has grown to be a $73-million-per-year industry for the state.
This new economic base has provided the Brinnon/Quilcene community with
over 400 jobs to date with wages of up to $25 per hour. Hourly earnings have
grown by 16 percent between 1995 and 2005.
As the timber industry waned and wages fell, the
community turned to a forceful local asset: the sea.
The program is delivered directly into
communities by locally based institutions: a tribal college and university
extension services across the states of Minnesota, Iowa, North Dakota,
South Dakota, Montana, Idaho, Washington and Oregon. The communities
themselves do not receive direct funding for their participation.
Help to stay focused on the issues and the prize
Over the course of the pilot effort, program leaders heard a common
frustration rise up from many of the communities: It was difficult for
them to stay focused on reducing poverty because they found the issue either
too painful to address or too hard to identify.
Using an asset-based perspective – that of finding and building on local
strengths to reduce poverty, especially for those in deepest need – was
different from the conventional ways of doing business. The new approach
challenged communities to exercise new skills and relationships, and to stay
on the newly laid tracks.
Horizons directors tapped the Study Circles Resource Center to help respond
to the call. Together they developed and tested a community discussion
guidebook called “Thriving Communities: Working together to move from
poverty to prosperity for all.”
In late 2006, Horizons launched its second phase with 163 rural communities
enrolled. To date, over 10,000 community members have used the “Thriving
Communities” guide in a series of group discussions that help them describe
local poverty and its root causes while creating a common vision and a plan
that will move them to action – poverty-reducing action.
Tools you can use
Aquaculture is showing economic promise for the next generation in Brinnon/
Quilcene. Through a school/community partnership, high school students
are preparing for living-wage jobs that will enable them to remain in their
community, if they so choose. Taylor Shellfish, the primary aquaculture
business in the region, is providing corporate mentorship for the studentowned aquaculture business, Big Quil Enterprises. The students themselves
seed and harvest local oysters and clams. They sell their harvested products to
Taylor Shellfish and at local oyster and shrimp fests.
Community leadership is as critical as good roads
and great schools
Communities in the Horizons program are discovering that leadership is a
structural asset as essential as access to a major highway or having a reliable
water supply. The program’s LeadershipPlenty® curriculum helps people
move from viewing their communities as bundles of needs and deficits to
viewing themselves as centers of assets and abilities. It builds on the notion
that leadership involves not just the elected and appointed officials, but
anyone – youth or adult – who steps forward and joins with others to help the
community thrive.
For example, in one Horizons pilot community, an American Indian
reservation, four out of six open seats on the tribal council were filled by
program participants. In another city, when the mayoral race between two
Horizons participants ended in a tie, the candidates settled the selection with a
coin toss on Main Street.
This is a sampling of practical tools to help identify community assets for poverty reduction:
Cooperative Housing
Development Toolbox
Laboratory for Community and
Economic Development
A set of books for two different groups –
residents and community planners – who
may be interested in developing housing
cooperatives as a way of developing affordable
housing. Supported by the Northwest Area
Foundation, this toolbox is available at
Community toolbox
http://communitydevelopment.uiuc.edu/
webworks/files/index.php
Provides several tests that communities can
take to assess their strengths. Also provides
instructions on how to use the test results.
www.tcfn.org/mapping/maptest.htm
www.ncdf.coop
Realizing Every Community
Asset Foundation
expanded economic opportunities
Wage & Benefits Metric
“When it comes to economic
development, it’s often not the quantity
of jobs, but the quality of jobs that means
the most to a community. The Wage
& Benefits Metric has simplified the
conversation about jobs for companies,
elected officials and economic
development boards. Up until now
obtaining that information had been a
time consuming process,” said Rosalie
Sheehy Cates, executive director of the Montana
County Development Corporation.
When a new business asks for local tax breaks,
community leaders are challenged to determine
the economic impact of this request. The Wage
& Benefits Metric can help get that information,
and create the reports needed to share it with
others. The Web-based Metric helps users
evaluate the quality of jobs proposed and if
they will boost or drain the local economy.
Attributes of the proposed jobs are easily
entered into the Metric. The Metric assigns
points to the job according to those attributes:
full time without benefits or part time with
benefits; or basic jobs without benefits.
The Wage & Benefits Metric has gone
through extensive testing by more than 130
organizations and businesses nationwide. Three
western Montana counties have signed up to
apply the Metric on a regional scale in 2007.
In addition to this online calculator, The Wage
& Benefits Metric can be used to analyze and
track trends in community job growth that can
be stored in a database for use over time. Users
also can quickly and easily create presentationquality charts and tables for hardcopy or
PowerPoint presentation.
The Wage & Benefits Metric can be accessed at
www.jobmetric.nwaf.org
Photo from Howard, South Dakota, another community building economic opportunities.
Sustainable community economic development is
about much more than opening new businesses and creating
numbers of jobs. It is about building and attracting business
clusters and/or industries that take advantage of local
assets to design differentiated and competitive products
and services. “Expanded economic opportunities” means
doing this so that more people within a community have
opportunities for living-wage jobs.
Lesson Learned:
Economic engines are required for livingwage jobs
A key to poverty reduction is access to jobs that enable families earn income
and acquire assets that will lift them out of poverty. There are communities now
examining their local business and economic structures in search of gaps and
opportunities. They are looking beyond the quantity of jobs to the quality of
jobs. Do they offer living wages, benefits and opportunities for advancement?
It also means determining how the community can build on and diversify its
economic engines – those industries’ sectors that feed families of businesses
that can compete successfully and strengthen the local economy over time, and
create and grow quality jobs for the long term.
Community investment to keep industry thriving
Like many rural, prairie towns, Westhope, North Dakota, relied heavily on
agriculture for its income. With the modernization of the agriculture industry,
the community found itself at a
crossroads. A loss of agriculturerelated jobs and a decline in
agribusiness wages meant the town
could no longer rely on farming
as a mainstay of the economy.
Recognizing it must do something
to prevent the downward spiral
repeated across the countryside,
community leaders created a
development plan that would sustain
future long-term change.
have to pay living wages,” so that employees do not remain in poverty
while working.
The EDC also has helped open and maintain two restaurants, a flower shop,
grocery store, and a greenhouse. Most recently, it reopened the only motel
within 45 miles, providing a new source of revenue for tourism and
business travel.
Tapping technology growth
A dearth of living-wage jobs has been a barrier to overcoming poverty in
picturesque Eastern Idaho. The average yearly income for a single person is
$15,801, making it difficult for long-time residents to stay and raise a family.
Yet, when Idaho Power recently announced it would add 300 jobs with good
wages and benefits, it could not find qualified workers.
Enter Partners for Prosperity (P4P), a Northwest Area Foundation 10-year
Ventures partnership community working to implement an ambitious strategic
plan to help reduce poverty in 16 counties in Eastern Idaho. P4P created a
workforce development program to tap the energy technology industry as
a source of new living-wage jobs. It joined an alliance to develop an Energy
Systems Technology and Education Center in Eastern Idaho that will create
high-wage positions and train workers to fill those jobs.
The Center will be located on the Idaho State University campus in Pocatello,
where a new Associate of Applied Sciences degree in energy systems will be
offered. P4P played a key role, along with three other partners, in securing a
nearly $2 million, three-year U.S. Department of Labor grant to develop the
“When a local energy company couldn’t find qualified
workers, Partners for Prosperity created a workforce
development program to tap the energy technology
industry as a source of new living-wage jobs.”
County commissioners, the local bank and existing businesses created the
Economic Development Corporation (EDC) to cultivate new homegrown
businesses. The town’s first investment paid off in a big way. When Deva
Lifewear, a clothing manufacturer, considered closing, the EDC stepped up. It
offered an investment plan that enabled residents an opportunity to purchase
shares in the company to keep it open and operating. Products from Deva
Lifewear are now sold nationwide, supporting a payroll of close to $300,000
annually and outsourcing $250,000 per year to a network of home stitchers. The
overall success may be measured in terms of per capita income, which jumped
42 percent between 1997 and 2002. This poverty-reduction strategy earned
Westhope one of the Foundation’s four Great Strides Awards for 2007.
“Poverty is not necessarily something that you formally get together and
discuss,” said Margo Helgerson, Westhope mayor. “But individually, people see
what needs to be done, and they work toward it. Everybody is aware of it. For
instance, one employer I spoke to recently says he feels that in order to keep
good employees you have to pay them a competitive wage and benefits. You
— Partners for Prosperity community member
Center. The goals are to advance science education, develop a workforce capable
of maintaining the nation’s electrical system and improve technologies to
support a modern national electrical distribution system.
“This grant will provide an opportunity to people in our region to pursue
training that will move them into jobs that pay a living wage,” said Jessica
Sotelo, executive director of Partners for Prosperity. “It also furthers our mission
to reduce poverty in Eastern Idaho through education, empowerment and
economic development.”
The grant will create regional economic competitiveness and job growth
while developing skilled workers to fill a national shortage of energy systems
technicians. This unique partnership between industry and education will pave
the way for long-term job creation well after the federal grant has ended. The
Center will help develop the next generation of energy technology workers to
fill jobs by promoting the math and science studies students need to prepare
them for technical and engineering programs at Idaho State University.
Tools
Tools you
you can
can use
use This is a sampling of practical tools you can use to help expand economic opportunities for poverty reduction:
“Native Entrepreneurship
Nationwide & In South Dakota”
A summary report prepared for Northwest
Area Foundation by CFED that takes a
comprehensive look at entrepreneurship
opportunities on American Indian
reservations.
This follow-up report to the 2004 publication,
“Native Entrepreneurship: Challenges, and
Opportunities for Rural Communities,” seeks to
address additional information developed since
the initial report. Download publication at
Wage & Benefits Metric
A Web-based tool developed in partnership
with the Northwest Area Foundation that
enables communities to determine whether
a proposed business is worth the tax breaks
it may be seeking. The Wage & Benefits Metric
allows users to quickly determine the quality
of jobs: full time or part time, with benefits
or without.
An online warehouse of tools to
reduce poverty.
www.jobmetric.nwaf.org
Inclusive decision making
Building Capacity to Reduce Poverty in Rural Latino Communities
The Rural Latino Capacity-Building Initiative (RLCBI) focuses on
capacity building – working with and in communities to build the
consciousness, skills and knowledge of rural Latinos and Latinas
to reduce poverty. The RLCBI identifies, shares and advocates for
models, tools and processes that advance this goal. It emphasizes
not only getting the work done, but also how it’s done, so lessons
can be shared.
Raíces – A program model of the RLCBI
The RLCBI will realize its goals through a number of efforts, with
Raíces being its first and largest program. Raíces, a Spanish word
meaning roots, has its principles grounded in qualities that connect
rural Latinos to their communities. This empowers them to address
10
challenges and work together to sustain a vibrant future.
Raíces operates in clusters of communities in Minnesota, Iowa,
Idaho and Oregon. Each cluster consists of communities with
high Latino populations and significant poverty rates.
Raíces works to help build strengths within a diverse set of
assets: cultural, human, social, political and financial while also
fostering broader competency. It is a four-year partnership among
the Northwest Area Foundation, the University of Iowa’s Institute
for the Support of Latino/a Families and Communities, and the Main
Street Project.
Photo from Marshalltown, Iowa, another community building its use of inclusive decision making.
• Poor h av e p lace at table • Community integr ation • Shared vision
Inviting diverse perspectives to the decision-making
table doesn’t come automatically or easily for most of
us. In some communities, the concentration of power has
remained within a close circle of leaders for generations.
Yet, communities all across the country are demonstrating
that poverty-reduction initiatives have a greater chance of
success if they reach out to elected officials, youth, aged,
and especially those who are living in poverty.
Lesson Learned:
Communities need to engage perspectives
from all sectors
The more perspectives offered on poverty reduction, the richer the solutions.
People from different backgrounds, attitudes and values can come together to
develop and own a common vision. They’ve learned broad inclusion must take
place from the very beginning in order to facilitate commitment to the action.
Two cultures, one path to future prosperity
When Turtle Mountain entered into a 10-year partnership with Northwest Area
Foundation in 2006, one goal was to include as many tribal members as possible
in the implementation of its strategic plan – whether or not they lived on the
reservation. For many members, this was their first opportunity ever to have a
voice in tribal issues.
In an attempt to encourage broad participation, a committee of organizers
sponsored the reservation’s first poverty-reduction summit. Hoping 150 people
would show, they were stunned when 400 bused to the multiday event.
According to federal measures, the poverty rate on Turtle Mountain is 40
percent. Because poverty is complex, and is about much more than income
levels, the partnership, like virtually all the communities with which the
Foundation works, developed locally based descriptions.
“Our definition of poverty was created by people who were living in poverty.
They helped shape our strategies to overcome it,” said Phyllis Jollie, Turtle
Mountain Band of Chippewa. “It was very humbling that they trusted us - that
maybe they would have a voice.”
Over the years, the people of Bridgeport, Washington, learned that two cultures
could live and work side by side to create businesses and begin reducing the
area’s 12-percent poverty rate. For more than a generation, the town of 500
attracted migrant workers every year to help in the agricultural fields.
The ongoing practice of inclusive decision making has generated new
relationships among tribal members, schools, churches, government agencies
and businesses all in an effort to reduce poverty for generations.
Then 10 years ago, something different happened: the migrant workers stayed.
The town’s population swelled to 2,250. The school system felt the demographic
shift. Where a decade ago 80 percent of students were white and 20 percent
were Latino, today the percentages are reversed.
Once a month, community leaders from 11 diverse neighborhood associations
get together, mindful of their unique collaboration after decades of operating
independently in a 20-square mile area known as North Minneapolis.
“We came together and said, ‘This is the new
us. How can we integrate our new population
and still maintain our traditional lifestyle?’ ”
said Bridgeport Schools Superintendent
Gene Schmidt.
Creating a strong, unified voice
“For many years, the neighborhood organizations did not talk to one another.
We had no idea what was going on with each other’s politics or revitalization
“Our alliance gives us a stronger voice when
talking with elected officials. They look at us
as a region unified in solving problems.”
The community learned to embrace its new
identity through participation in the Horizons
program, the Foundation’s leadership
development program to reduce poverty.
Bridgeport leaders met “and discovered we’re
not content to say ‘that’s just the way things
are.’ We learned can make a difference,” Schmidt explained.
They identified training for Latinos who wanted to open new businesses,
thereby tapping the talents of these residents while meeting long-standing
community needs. Within the last year, roughly seven new Latino-owned
businesses have opened, including restaurants, a clothing shop and an auto
mechanic service.
Bridgeport was given the Multicultural Excellence Award in 2006 by the
Washington State Association of Multicultural Education for its success
in integrating the two cultures.
Developing a collective vision and voice
The Turtle Mountain Band of Chippewa tribal members are proud of their
beautiful land of hills, lakes, meadows and streams in north central North
Dakota. Measuring 72 square miles, it is a small Native American reservation
unable to accommodate all tribal members eligible to live there.
— Wesley Walker, NorthWay Community Trust, a
Northwest Area Foundation 10-year partnership
efforts. It was more like competition than cooperation,” said Wesley Walker,
executive director of NorthWay Community Trust, a Northwest Area Foundation
10-year partnership comprising 13 neighborhoods in North Minneapolis.
Neighborhood boundaries resulted in a divide-and-parcel of city resources.
Using an inclusive decision-making model encouraged by NorthWay, association
leaders realized they could accomplish more working together than separately,
and so joined to form the Northside Neighborhood Alliance. The new coalition
now works on poverty reduction, economic development, educational
improvements and crime reduction.
“Our alliance gives us a stronger voice when talking with the mayor and other
elected officials. They look at us now as a region that is unified in solving
problems,” explained Walker.
Members have found that this has resulted in new perspectives and more
informed decision making.
Tools you can use This is a sampling of practical tools you can use to help increase inclusive decision making for poverty reduction:
Association for Economic
Opportunity (AEO)
North Dakota State University
Group Decision Center
Study Circles Resource Center
A national association of organizations
committed to microenterprise development.
AEO provides its members with a forum,
information and a voice to promote enterprise
opportunity for people and communities
with limited access to economic resources.
Includes information about learning clusters.
A Web site that allows groups to engage
in online discussion that enables all participants
to voice opinions, ideas and questions while
remaining completely anonymous. Electronic
meetings also provide great tools such
as voting and rating, to better understand
everyone’s feelings on certain ideas.
Helps communities build capacity to
organize dialogue that leads to action and
change on local public issues. The Study
Circles guide, “Thriving Communities:
Working together to move from poverty
to prosperity for all,” is designed for use
in community conversations involving
small, diverse groups of 10 to 15 people.
www.microenterpriseworks.org
www.ndsu.edu/gdc
www.studycircles.org
For more tools, visit NWAF Solutions Depot at
www.nwaf-solutionsdepot.org.
11
Ventures, horizons and Connections
Programs
grounded in community, shared principles
and long-term outcomes
Since adopting this mission nearly nine years ago, the Foundation’s three programs have
engaged hundreds of communities and thousands of people across the Foundation’s
eight-state region. Each program is based on a distinct theory of change, and uses a
unique time frame. At the same time, they are all grounded in basic beliefs (see page 3),
and a commitment to outcomes that build community capacity to reduce poverty
long term.
Although the programs use different strategies to promote grassroots ownership and
action, they all seek systemic change that will benefit those in the lowest economic
20 percent. They also all assist communities to achieve four major outcomes:
Increased asset identification and development
This includes increasing the individuals’ and the community’s understanding
of poverty, their roles in addressing it and opportunities for leadership. It is
about using an asset-based perspective for community action, recognizing
assets in infrastructure, the local economy, social organizations and networks,
natural resources, locally owned businesses, culture, banks, schools, the ability
to mobilize across communities, and collaborations to leverage resources and
experience.
Expanded economic opportunities
In both urban and rural settings, this means connecting low-income people
to economic opportunities that produce living-wage jobs. It requires skill
development, transportation and civic engagement, and support that prepares
them to earn wages sufficient to own assets.
Increased ability to design, lead and implement
sustainable change
Examples of these capacities include civic engagement, new contacts,
community-based resources, being a community that welcomes innovative
approaches to working across sectors, and skill-building organizations. We
have found that communities able to organize and mobilize across public
and private sectors and among diverse populations, although they may have
fewer assets, are much better candidates for the Foundation’s approach than
communities where both assets and capacity are low.
Increased community use of inclusive decision
making
This is critical to developing shared vision, goals and ownership of sustainable
strategies. It demands that the problem-solving consensus process weave in
the interests of people living in poverty as well as those of civic and business
leaders, educators and religious leaders, service providers and policy-makers.
The programs continue to evolve. They also work to evaluate their impact, and to collect lessons to share with other communities and organizations.
The Foundation has established 10-year partnerships with the following 10 communities.
Some of these partnerships run through 2016:
Miner County Community Revitalization (MCCR)
NorthWay Community Trust
Cheyenne River Sioux Tribe
Miner County, South Dakota, Established in 2001.
www.mccr.net
Thirteen neighborhoods in North Minneapolis,
established in 2003. www.northwaycom.org
Nineteen communities of the Cheyenne River
Sioux Reservation in central South Dakota,
established in 2006. www.sioux.org
Central Oregon Partnership
Opportunity Link
Crook, Deschutes and Jefferson Counties and an
American Indian reservation, established in 2001.
www.copartnership.org
North Central Montana, 11 counties and three
American Indian reservations, established in 2004.
www.opportunitylinkmt.org
Indian Land Tenure Foundation
Partners for Prosperity
An institution, regional in scope, which helps
Indian tribes and landowners gain back land
taken out of tribal ownership, established in 2002.
www.indianlandtenure.org
Eastern Idaho, 16 counties and an American Indian
reservation, established in 2004.
www.easternidahoprosperity.org
Turtle Mountain Band of Chippewa
Lummi Nation
Reservation in northwest Washington State near
the city of Bellingham, established in 2006.
www.lummi-nsn.org
BuRSST for Prosperity
Five first-ring suburbs of Seattle: Burien, Renton,
SeaTac, Skyway, and Tukwila in south King County,
Washington, established in 2005.
www.bursst.org
Reservation in North Dakota, established in 2006.
www.tmp2p.com
Capital Investments in Local Businesses
Late Stage
REVENUE
Growth
MRI Criteria
Startup
Early Stage
PRI Criteria
TIME
Today, Invest Northwest – the Foundation’s private equity fund for missionrelated investment – is fully operational and making investments. The fund
targets significant social returns and a 15 percent internal rate of return. In
concert with the program-related investment strategy (PRI), Invest Northwest
will help the Foundation broaden its outreach and achieve greater social and
economic impact in the communities it serves.
12
MRI & PRI Using Assets to Drive the Mission
The Foundation complements its program work with its investment strategies.
Since 2004, it has used innovative measures to apply more of its assets to its mission.
Mission-Related Investments
Mission-related investments (MRIs) in the
form of a venture capital fund, provide capital to
grow established businesses in the region.
In 2004, the Foundation allocated $10 million
(two percent of assets) to Invest Northwest,
a private equity fund created to meet the
capital needs of established private, middlemarket, growth- and later-stage for-profit
companies. Mission-related investments in
these businesses help support local economies
by creating or retaining jobs and paying living
wages and benefits. To date, $3.9 million is
actively invested.
To date, the Foundation has made 17
program-related investments (PRIs), valued
at $11.7 million, to Community Development
Financial Institutions (CDFIs) to help initiate
new business opportunities. These CDFIs have,
in turn, made these funds available to startup
or early-stage businesses considered too
high risk for conventional lenders. Their focus
is on businesses in underserved communities,
those with a poverty-reduction focus, and
those with post-investment initiatives, such
as learning networks.
Program Facts
Northwest Area Foundation realizes
its mission of helping communities
reduce poverty through three programs
and two investments strategies.
The programs are: Connections, Horizons and
Ventures. Each is based on a distinct theory of
change, operates at a different scale and within
a different time frame, and uses separate sets
of progress indicators.
Since 1999, the Foundation has invested
approximately $193 million in community-based
poverty-reduction programs. It expects to invest
an estimated additional $75 million within the
next two years, at which time it will have
completed its first 10 years of operation under
a community-based program model.
Horizons
Theory: If the Foundation can help small, rural
communities focus on poverty reduction and build
their leadership capacity, the communities will be
able to better own their initiatives and take action to
reduce poverty for the long term.
Program characteristics include:
•Focus on community leadership that can
collectively reverse economic challenges of the
community and move toward prosperity.
•Targets rural communities with populations of
5,000 and fewer that have histories of significant
economic decline and demographic change.
•Communities must have a poverty rate of at least
10 percent to be eligible.
•Works through intermediary organizations
– local colleges and university extension services
that deliver 18 months of training and coaching
directly to participating communities.
•Following a successful pilot program, Horizons
enrolled 163 communities, in seven states, which
will participate in the 2006–2008 program cycle.
•When the current phase of Horizons is completed
in 2008, the Foundation estimates that 40,000
people will have been trained in leadership skills
that will enable them to identify the root causes of
poverty and how to take action to reverse it.
Connections
Ventures
Theory: If the Foundation supplies products
Theory: If the Foundation selects, works with and
(knowledge, models and tools) for poverty reduction,
then a growing number of communities in our
region will use them within their poverty-reduction
initiatives.
funds initiatives in a few communities over a long
period, to learn and act strategically in reducing
poverty in an ongoing way, then knowledge to
reduce poverty will be gained, shared and used in
these and other communities.
•Works with Foundation staff, partner
communities, nonprofit organizations, academic
institutions and local governments to identify
products with histories of success, and help make
them available to other communities to use within
their poverty-reduction initiatives.
•Identifies and evaluates potential products,
assesses market demand, develops and tests
prototypes, distributes products and evaluates
customer usage.
•Manages products and services within five
different product classifications: tools, models,
support/training products, financial instruments
and engagement.
Like Wrestling a Jellyfish
“A lesson isn’t learned until it changes
behavior,” said Karl Stauber, president and CEO
of the Northwest Area Foundation. “And one of the
hardest things to do is change behavior, even
when you really want to.”
Another challenge is capturing lessons that can
be shared among communities striving to reduce
poverty within their town or region. Communities
have so many unique characteristics, notes Stauber,
and that makes it difficult to isolate those lessons
that can apply to many.
“On the other hand, if we take a systematic
approach to capturing and sharing lessons learned,
we may overgeneralize and miss important findings.
It’s hard to balance the two,” he said.
The Foundation is committed to identifying and
sharing strategies and tools that work to reduce
•The Foundation works with partner communities
to develop a strategic plan that will be a pathway
out of poverty, and provides significant funding to
support the poverty-reduction efforts.
•Ten years of Foundation support, including staff
guidance and technical assistance to meet povertyreduction goals.
• Community matching of Foundation resources.
•Responsibility to share lessons learned in poverty
reduction.
Capturing key lessons from hundreds of communities across eight states
poverty in communities. Lessons have emerged from
the Foundation’s work with communities over the
past 10 years, and must be mined and analyzed from
ongoing efforts across the Foundation’s eight-state
region. For more than a year, staff has worked with
communities and consultants to initiate and test a
computer-based data-collection system to help
with this effort.
The Foundation has gathered a wealth of
information from the past 10 years of its refocused,
targeted mission to help communities in Minnesota,
Iowa, North Dakota, South Dakota, Montana,
Idaho, Washington and Oregon reduce poverty.
Foundation staff members who work most closely
with communities and learning share their thoughts
on benefits and challenges of finding and sharing
lessons learned.
“Learning is something that never stops. It’s
the intellectual equivalent of breathing,” continued
Stauber. “Just as when you stop breathing you’re
done living, when you stop learning, you’re done
moving ahead.”
The key challenge facing the leaders of the
Horizons program is translating lessons learned
into practical units communities can use to advance
on-the-ground poverty reduction.
“Community life unfolds one piece at a time.
Our challenge is to translate our observation of
what’s happening so that it will be useful to other
communities. You have to know your audience.
You always have to move the work forward, not just
rediscover what other people already know,” said
Jean Burkhardt, Horizons program lead.
13
2006 Financial overview
Treasurer’s Report
Northwest Area Foundation’s investment portfolio and budgeting process are
designed to balance: a) the needs of the region we serve, b) the requirements of
the founding donor, including the desire to exist in perpetuity, and c) the federal
payout requirement to distribute roughly 5 percent of the average value of our
investment portfolio. The Foundation’s income is earned through a diversified
investment portfolio that aims to meet long-term earning objectives while
maintaining a prudent level of risk.
make up 71.1 percent of the Foundation’s total expenses for the year. Costs
related to running the Foundation’s operations were $3.1 million for the year,
or 10.6 percent of total expenses. Costs related to managing the Foundation’s
investments, federal excise taxes, and unrelated business income taxes made up
the remaining 18.3 percent of total expenses.
In addition, six new program-related investments (PRIs), totaling $4.25 million
were made. These distributions count toward the Foundation’s annual payout
requirement. The new PRIs, added to the principal balance of existing PRIs,
adjusted for principal repayments and write-downs, result in an asset balance of
$10.6 million in program-related investments, as reported on the Statement of
Financial Position.
Total assets of the Northwest Area Foundation on March 31, 2007 were $500.1
million, a 3.47 percent increase over last year’s $483.3 million. Figure 1 shows
that over the history of the Foundation, the market value of total assets has
retained its purchasing power. This chart takes the total value of contributions
made to the Foundation ($10.3 million) and adjusts for inflation from inception
of the Foundation (1934) through March 2007. This is contrasted with the
market value of the Foundation’s total assets over the last 10 years. During
the same 10-year period, $195.6 million has been spent in grants and other
qualifying distributions.
Northwest Area Foundation’s board of directors takes great care to implement
and monitor its financial activities through both an investment committee
and an independent audit committee. The investment committee determines
asset allocation, retains and terminates investment managers and custodians,
monitors risk and performance of the portfolio, and recommends investment
policy to the Board of Directors. Jeffrey Slocum & Associates serves as an advisor
to the Investment Committee.
For the fiscal year ending March 31, 2007, the Foundation’s investment portfolio
produced a 10.3 percent return, ranking at the 51st percentile when compared
against similarly managed portfolios and at the 49th percentile when compared
to other endowments and foundations. Though one year performance was near
the median in terms of relative performance, it did exceed the Foundation’s
absolute return goal of 8.8 percent for the fiscal year. Three- and 5-year
returns remain, however, in or near the upper third when compared with
other institutional portfolios. For the 3-year period ending March 31, 2007,
the annualized return of the portfolio was 11.1 percent, well exceeding the
absolute target of 9.1 percent by 200 basis points for the same time period; this
return ranked in the 24th percentile overall, and in the 32nd percentile when
compared to other endowments and foundations. In addition, 5-year annualized
performance, at 9.2 percent, ranked in the 30th percentile when compared to
other similarly managed portfolios, and in the 38th percentile when compared
to other endowments and foundations. When using percentile rankings to
judge relative returns achieved, 1st is best and 100th is worst. These rankings
are drawn from the Independent Consultants Cooperative Universe investment
performance database.
The audit committee oversees the financial reporting process, the system
of internal controls and the annual financial audit process. To conduct an
independent audit of the Foundation’s financial statements, the audit committee
retained PricewaterhouseCoopers, LLP. The financial statements are provided on
the following pages. The Foundation’s tax return, the 990-PF, will be available
after its filing date in the Fall of 2007.
Karl N. Stauber
Treasurer
Target Asset Allocation
Private Equity
Fund of Funds
Fund of
Hedge Funds
The investment portfolio is well-diversified, using several sectors of the financial
markets to maximize return while containing risk. The Foundation approved
a 10 percent commitment to private equity in 2003. In order to diversify by
vintage year, this allocation will be funded over several years by moving dollars
from international equity (decreasing from a 15 percent weight to a 10 percent
weight) and from fixed income (decreasing from a 25 percent weight to a 20
percent weight).
Non-U.S. Equity
10%
25%
10%
15%
20%
Bonds
20%
As reported in the Statement of Activities and Change in Net Assets for the
fiscal year, revenue totaled $48.2 million and expenses $29.7 million. Included
in these expenses were $16.1 million in grants and $5.0 million in programrelated expenses including convening community meetings, hiring consultants
and staff, and other costs of working with communities to create capacity
and strategies to reduce poverty over the long-term. These program costs
U.S. Small
Capitalization
Equity
U.S. Large
Capitalization Equity
Figure 2
Growth in total assets
MA R K ET VA LUE OF ASSE TS IN M ILLI ONS
Market Value of Total Assets
Donor Contributions Adjusted for Inflation
$600
$500
$441
$442
$483
$470
$429
$400
$300
$200
$121
$123
$127
$131
$133
$137
$139
FY ’99
FY ’00
FY ’01
FY ’02
FY ’03
FY ’04
$144
$149
$152
FY ’06
FY ’07
$100
$0
FY ’98
Figure 1
14
$453
$368
YEARS
14
$438
$425
$500
FY ’05
for the changes we
W
Karl N. Stauber
of change.
imagination.
20 percent.
May 17, 2007
poverty reduction.
made together.
Karl N. Stauber
President and CEO
Assets
Cash
Fixed income
Domestic equities
Private equities
Total investments
Other assets
Total assets
2006
$133,839 3,500,000 673,883 $535,374
592,394
773,123
(401,535)
4,574,386 6,938,575
99,810,536 97,479,962
163,159,257 168,543,013
73,512,734 77,699,893
124,051,017 112,130,898
18,596,503 10,431,391
483,704,433 473,223,732
10,563,203 6,419,112
147,799 136,231
Cash
Beginning of year
End of year
1,342,526 1,628,594
$500,065,683 $483,308,560
time.
Unrestricted
Revenues
Dividends
Interest
Other
Total revenues
Expenses
Program
Administrative
2007
2006
Restricted
Total Unrestricted
Restricted
investments.
Total
$7,931,435
8,422,878
47,672,867
10,627
64,037,807
16,143,361 4,982,261 16,143,361 4,982,261 15,831,274 5,048,973 15,831,274
5,048,973
3,144,411 5,027,750 395,509 29,693,292 18,507,226 3,144,411 5,027,750 395,509 29,693,292 18,507,226 2,931,420 4,408,592 786,283 29,006,542 35,031,265 2,931,420
4,408,592
786,283
29,006,542
35,031,265
Cash
Investments
Net assets
End of year $487,355,662 $10,324,294 $497,679,956 $468,848,436 $10,324,294 $479,172,730
60,272
$535,374
$2,907,606 $(5,505,070)
(1,240,494)
1,394,961
468,000 249,000
stipulations.
535,374 $133,839 (6,069,426)
(6,069,426)
475,102
Liabilities
$598,896 $824,989
154,467 1,394,961
20,000 201,212
275,364 328,668
1,337,000 1,386,000
Total liabilities
2,385,727 4,135,830
Net assets
Unrestricted 487,355,662 468,848,436
Total net assets 497,679,956 479,172,730
2006
(54,367)
(175,802)
2007
2007
340,435 350,194
(53,304)
(53,304)
(49,000)
496,000
99,240 436,547
Other assets
(11,568)
23,738
(717,413)
(226,093)
267,489
(181,212)
(292,030)
our opinion.
15
Grants
Federal Taxes
16
for the changes we
W
Karl N. Stauber
of change.
imagination.
20 percent.
May 17, 2007
poverty reduction.
made together.
Karl N. Stauber
President and CEO
Assets
Cash
Fixed income
Domestic equities
Private equities
Total investments
Other assets
Total assets
2006
$133,839 3,500,000 673,883 $535,374
592,394
773,123
(401,535)
4,574,386 6,938,575
99,810,536 97,479,962
163,159,257 168,543,013
73,512,734 77,699,893
124,051,017 112,130,898
18,596,503 10,431,391
483,704,433 473,223,732
10,563,203 6,419,112
147,799 136,231
Cash
Beginning of year
End of year
1,342,526 1,628,594
$500,065,683 $483,308,560
time.
Unrestricted
Revenues
Dividends
Interest
Other
Total revenues
Expenses
Program
Administrative
2007
2006
Restricted
Total Unrestricted
Restricted
investments.
Total
$7,931,435
8,422,878
47,672,867
10,627
64,037,807
16,143,361 4,982,261 16,143,361 4,982,261 15,831,274 5,048,973 15,831,274
5,048,973
3,144,411 5,027,750 395,509 29,693,292 18,507,226 3,144,411 5,027,750 395,509 29,693,292 18,507,226 2,931,420 4,408,592 786,283 29,006,542 35,031,265 2,931,420
4,408,592
786,283
29,006,542
35,031,265
Cash
Investments
Net assets
End of year $487,355,662 $10,324,294 $497,679,956 $468,848,436 $10,324,294 $479,172,730
60,272
$535,374
$2,907,606 $(5,505,070)
(1,240,494)
1,394,961
468,000 249,000
stipulations.
535,374 $133,839 (6,069,426)
(6,069,426)
475,102
Liabilities
$598,896 $824,989
154,467 1,394,961
20,000 201,212
275,364 328,668
1,337,000 1,386,000
Total liabilities
2,385,727 4,135,830
Net assets
Unrestricted 487,355,662 468,848,436
Total net assets 497,679,956 479,172,730
2006
(54,367)
(175,802)
2007
2007
340,435 350,194
(53,304)
(53,304)
(49,000)
496,000
99,240 436,547
Other assets
(11,568)
23,738
(717,413)
(226,093)
267,489
(181,212)
(292,030)
our opinion.
15
Grants
Federal Taxes
16
2007 highlights
respectively.
Use of Estimates
fiscal year:
5. Grants
as follows:
2007
2006
201,212 $
493,242
and refunds (*) 16,143,361 15,831,274
Payments (*) (16,324,573) (16,123,304)
$
20,000 $
201,212
2. Investments
$ 40,394,090
331,301
$ 40,725,391
$ 20,010,682
$ 47,672,867
the following:
2007
2006
Current
$
430,458 $
326,403
Deferred
(43,774)
459,880
UBIT provision
8,825 $
395,509 $
786,283
Corporation.
Annual Update 2007
Re-imagining a
land of opportunity
7. Capital Stock
2007
$
970,000 $
Corporation (debt)
41,075 $ 10,563,203 $
2006
985,000
413,427
395,281
375,000
1,000,000
300,000
700,000
1,000,000
1,000,000
200,000
30,000
6,398,708
20,404
6,419,112
stockholder.
financial position.
Staff
Terrence W. Glarner
St. Paul, MN
Support
(651) 225-3879 / darce@nwaf.org
the President
Linda L. Hoeschler
St. Paul, MN
Thomas J. Horak
St. Paul, MN
organization.
Rodney W. Jordan
Minneapolis, MN
Nicholas Slade
Minneapolis, MN
Directors
Minneapolis, MN
Elouise Cobell
Browning, MT
Louis F. Hill
St. Paul, MN
Patricia Jensen
St. Paul, MN
Trustees
Missoula, MT
Fr. Kevin McDonough
St. Paul, MN
Elsie Meeks
Rapid City, SD
Natalie Camacho
Mendoza, Boise, ID
Sally Pederson
Des Moines, IA
Medford, OR
Fiscal Years Ending
2008
$
282,490
2009
282,490
2010
282,490
2011
282,490
2012
282,490
Thereafter
23,541
$ 1,435,991
Sandra Vargas
Minneapolis, MN
Sarah Vogel
Bismarck, ND
www.thebestreet.com
17
& CFO
Officer
Lead
Administrator
Contracts
Manager
Support
Support
Liaison II
(651) 225-3891 / rlee@nwaf.org
Suite 400
Tel: (651) 224-9635
Fax: (651) 225-7701
www.nwaf.org
differently.
Development Manager
& CEO
(651) 225-3876 / kari@nwaf.org
Technology
(651) 225-3867 / mvang@nwaf.org
(651) 225-7652 / myauk@nwaf.org
making.
Contents
Our Programs . . . . . . . . . . . . . . . . . . . 12
Program Facts . . . . . . . . . . . . . . . . . . 13
2007 Highlights . . . . . . . . . . . . . . . . . . 18
redefining success.
2007 highlights
respectively.
Use of Estimates
fiscal year:
5. Grants
as follows:
2007
2006
201,212 $
493,242
and refunds (*) 16,143,361 15,831,274
Payments (*) (16,324,573) (16,123,304)
$
20,000 $
201,212
2. Investments
$ 40,394,090
331,301
$ 40,725,391
$ 20,010,682
$ 47,672,867
the following:
2007
2006
Current
$
430,458 $
326,403
Deferred
(43,774)
459,880
UBIT provision
8,825 $
395,509 $
786,283
Corporation.
Annual Update 2007
Re-imagining a
land of opportunity
7. Capital Stock
2007
$
970,000 $
Corporation (debt)
41,075 $ 10,563,203 $
2006
985,000
413,427
395,281
375,000
1,000,000
300,000
700,000
1,000,000
1,000,000
200,000
30,000
6,398,708
20,404
6,419,112
stockholder.
financial position.
Staff
Terrence W. Glarner
St. Paul, MN
Support
(651) 225-3879 / darce@nwaf.org
the President
Linda L. Hoeschler
St. Paul, MN
Thomas J. Horak
St. Paul, MN
organization.
Rodney W. Jordan
Minneapolis, MN
Nicholas Slade
Minneapolis, MN
Directors
Minneapolis, MN
Elouise Cobell
Browning, MT
Louis F. Hill
St. Paul, MN
Patricia Jensen
St. Paul, MN
Trustees
Missoula, MT
Fr. Kevin McDonough
St. Paul, MN
Elsie Meeks
Rapid City, SD
Natalie Camacho
Mendoza, Boise, ID
Sally Pederson
Des Moines, IA
Medford, OR
Fiscal Years Ending
2008
$
282,490
2009
282,490
2010
282,490
2011
282,490
2012
282,490
Thereafter
23,541
$ 1,435,991
Sandra Vargas
Minneapolis, MN
Sarah Vogel
Bismarck, ND
www.thebestreet.com
17
& CFO
Officer
Lead
Administrator
Contracts
Manager
Support
Support
Liaison II
(651) 225-3891 / rlee@nwaf.org
Suite 400
Tel: (651) 224-9635
Fax: (651) 225-7701
www.nwaf.org
differently.
Development Manager
& CEO
(651) 225-3876 / kari@nwaf.org
Technology
(651) 225-3867 / mvang@nwaf.org
(651) 225-7652 / myauk@nwaf.org
making.
Contents
Our Programs . . . . . . . . . . . . . . . . . . . 12
Program Facts . . . . . . . . . . . . . . . . . . 13
2007 Highlights . . . . . . . . . . . . . . . . . . 18
redefining success.

Re-imagining a land of opportunity

Transcription

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