giving by design - sitemason, inc.of merrill lynch trust bank as financial advisors. one of the...

Giving by Design

2007 Annual Report

American Baptist Homes Foundation of the West

ABHOW Foundation Annual Report1

Giving by Design

There is a kind of giving that is uncalculated and spontaneous.We see someone in need and offer help.We watch the newsof a disaster and are moved to make a contribution. Equally generous, how-ever, is the gift that is planned. A program inspires us, and we consider howour own resources could advance the effort. A community cares for us, andwe decide to give back.This is giving by design.

In 2007, the ABHOW Foundation advanced the mission of American BaptistHomes of the West by emphasizing this kind of “planned giving,” which has twolevels. First, it’s about helping donors discern what’s important to them andthen figuring out the giving option that best matches their financial needs andcharitable aspirations. Second, and just as important, “planned giving” has an institutional emphasis: it means building the structure that supports many charitable activities and maximizes investments so that collectively our givinghas greater impact.

The Foundation is performing well on both levels. Increasingly, donors findin the Foundation a way to make a difference in their communities while reducingtheir taxes and protecting assets.The 2006 year-end appeal was the largest inFoundation history, raising $251,567.We are issuing more charitable gift annu-ities and establishing trusts that serve donors’ needs.The Foundation’s netassets have never been higher.

Supporting and leveraging all of our donor activity is the business of theFoundation. On this institutional level, we are putting in place processes thatincrease awareness of the Foundation and heighten local participation.Weselected Merrill Lynch Trust Bank as our partner for trusts and charitable giftannuities. Together, we made presentations at all of the ABHOW continuingcare retirement communities through events sponsored by the local foundationcommittees. Finally, we launched a quarterly newsletter, Legacy, to report onour activities.

Whether working with a donor or strengthening the structure of the Foundation,our aim is to “provide financial support and security for residents in all com-munities owned or managed by ABHOW and its affiliates.” That vision requiresforesight and intentionality, planning and building. That’s giving by design.

Joe AndersonSenior Vice President

ABHOW Foundation Annual Report 2

A Message from the Chairman and President

Developing a strategic plan is a critical disciplinefor any organization. But once developed, a plan’s true value is determined byhow well it is implemented. In the business world, that’s called “working theplan.” At the ABHOW Foundation, it’s “giving by design.”

Two years ago, the Board of Directors adopted a strategic direction for theFoundation: “The Foundation will provide financial support and security for residents in all communities owned or managed by ABHOW and its affiliates.It will accomplish this by building its unrestricted funds, increasing its commu-nity-specific funds and through fund raising from third-party sources.” Sincethen, we have rolled up our sleeves to make sure this strategy becomes reality.

In 2007, we worked with the local foundation committees to strengthen theendowment funds at each ABHOW continuing care retirement communitythrough special fund-raising activities, individual donor development, and theyear-end appeal.These endowment funds provide assistance to residents whohave outlived their financial resources. In 2007, more than $1.2 million wasdistributed to ABHOW communities for benevolent care of residents.

We also directed staff to extend the Foundation’s assistance beyond the ABHOWcommunities to the cities and regions the company serves.The Foundation hasawarded several small grants to nonprofits which provide senior services that are compatible with ABHOW’s mission. If this program is successful, it may be expanded into other markets served by the company.

Because we believe in the Foundation, we are a “working board” and also a gen-erous one: all board members contribute financially.We gladly give of our timeand resources, knowing that all of the Foundation’s activities are designed tofulfill the mission: “To enhance the lives of residents in market-rate communi-ties through the growth of unrestricted funds and program-specific fund raisingat the community level. And to enhance the lives of residents in affordablehousing communities through direct grants and fund raising.”

Frank JenningsChairman of the Board

David B. FergusonPresident


The Work of the Foundation

“What do you want your financial resources todo for you?”That’s a basic question the ABHOW Foundation asks when talkingto a donor. Once the staff has the answer – whether it be maximizing income,reducing taxes, protecting assets, bequeathing a gift to the community, or any combination thereof – the Foundation goes to work.That work is givingby design.

It begins with listening. Cultivating relationships is really the heart of theFoundation’s work. Because The Foundation wants to be part of meeting adonor’s needs and aspirations, staff members get to know a donor first beforeoffering advice.When it’s time to develop a giving plan, the Foundation pro-poses options that best address the donor’s particular situation.These optionsmay include:

• Charitable Gift Annuities, which provide income for the donor and, upon maturity, a gift to the Foundation;

• Charitable Remainder Unitrusts, which pay a fixed return and is revalued each year;

• Charitable Remainder Annuity Trusts, which provide a fixed return that is not revalued;

• Bequests of gifts, stock, cash or property as defined in a will or living trust; and

• Memorial gifts in honor of others and usually held in the endowment fund ofthe retirement community.

Betty Will, a resident of Grand Lake Gardens, gives of her time for thelocal foundation committee.


The Work of the Foundation

All of the Foundation’s donors benefit from expertcounsel delivered with a personal touch. In 2007,those relationships were deepened with the additionof Merrill Lynch Trust Bank as financial advisors.One of the world’s leading wealth managementcompanies, Merrill Lynch holds approximately $1.6 trillion in total client assets. Its wide-rangingresources are now available to Foundation donorsthrough the Merrill Lynch office in San Ramon,Calif.

As financial advisors, Merrill Lynch Trust Bankmanages the Foundation’s gift annuities and newtrusts. The Merrill Lynch team has extensive professional experience and keen understanding of the financial issues of seniors. Along with theFoundation staff, the Merrill Lynch advisors trav-eled to ABHOW CCRCs in 2007 to introduce the team members and provide information aboutthe stock market, investment strategies and thebenefits of charitable giving.

Father and son Daniel T. Zeising (right) and David S. Zeisingof Merrill Lynch provide expert counsel for charitable giftannuities and trusts.

George and Mary Fullmer of The Terraces of Los Gatos areenthusiastic supporters of the Foundation’s charitable giftannuity program because it benefits them financially whilehelping their community.


The Impact of the Foundation: CCRC Endowments

For 39 years, the ABHOW Foundation has supported the mission of ABHOW’s continuing care retirement communities(CCRCs) by providing benevolent care to residents who have outlived theirresources.The Foundation’s assistance flows from the generosity of residentswho want to help their neighbors. Indeed, the genius of the Foundation is inmatching neighborly concern, which naturally arises in ABHOW communities,with a structure that benefits donors and recipients alike.That’s giving by design.

The need for benevolent care is continuous as residents outlive their resourcesand require financial support from the Foundation.The endowment fund ateach community ensures that residents get the assistance they need.These fundsare the result of decades of resident gifts and wise investments. In 2007 alone,$1.2 million was distributed to ABHOW communities for benevolent care.More than $10 million has been distributed in the past decade.

Additions include new donations and assets transferred from matured trusts.Distributions are funds returned monthly to the community from the Foundation.Other changes include realized and unrealized investment income less Foundation expense.

Pilgrim Haven 2,002,911 7,858 -73,782 176,079 2,113,066 Grand Lake Gardens 747,775 40,475 -25,703 65,722 828,270 San Joaquin Gardens 3,440,166 119,935 -115,816 305,315 3,749,600 Piedmont Gardens 6,075,064 18,025 -224,506 533,925 6,402,508 Rosewood 1,582,900 26,922 -56,502 139,015 1,692,335 Valle Verde 9,515,924 -6,689 -343,003 832,887 9,999,118 Plymouth Village 4,615,194 22,161 -165,387 403,380 4,875,347 Judson Park 1,606,289 3,615 -56,232 141,109 1,694,781 The Terraces of Phoenix 902,865 5,025 -33,255 79,268 953,903 The Terraces of Los Gatos 802,573 441,431 -35,096 101,716 1,310,625 Total $31,291,661 $678,758 $-1,129,282 $2,778,417 $33,619,554

Community Sept. 30, 2006 Additions Distributions Other changes Sept. 30, 2007


The Impact of the Foundation: CCRC Endowments

Local Committees

Gifts from residents are added to the endowment ofthe community of which the resident was a memberunless otherwise specified by the donor. Local foun-dation committees help to generate support for theendowments and to raise funds for special communityprojects. For instance, The Terraces of PhoenixFoundation raised $12,000 in 2007 to create TheTerraces Technology Center, which offers a computerlab and classes for residents. And The Terraces of Los Gatos Resident Foundation raised over $40,000for a new fitness center outfitted with state-of-the-art equipment.

Residents, board members, community leaders andFoundation staff served on the following local com-mittees in 2007:

Grand Lake Gardens DevelopmentCommitteeCo-Chairs: Dr. Rosa James & John Taylor; Members:Adnan Hasan, Myrtle Pelle, Heath Wagener,Margaret Weitkamp, Betty Will, Harrison Williams

Judson Park Resident FoundationChair: Gertrude Pfeffer; Members: Russ Akiyama,Gladys Flotten, Frank Jennings, Karen Keiser,Natalie McCann, Harriett Oyen, Bill Painter,VirgilStaiger, Jimmy Walker

Piedmont Gardens Foundation CommitteeMembers: Douglas Durein, Sue Roderick

Pilgrim Haven Resident FoundationChair: Miriam Bjornson; Members: Will Corkern,Joan Frietas, Hoyt Hickman, Karen Jenney,Roy Kuramoto,Terry Morrison, Doris Pryor,Rowena Ramires, Jane Reed, Marilyn Sell

Plymouth Village Development Task ForceChair: Dick Rosenquist; Members:Yvonne Abels,Cheryl Hines, Lloyd Howard, Keith Kasin, MaryLou Layne, Rita Lee, John Serbein, Jim Sharp,Vi Wiant

Rosewood FoundationChair: Gary Bashor; Members: Ken Aitken,Ted Burgess,Beryl Corrie, Pat Griffin, Danielle Hillard-Adams,Gloria Marshall, Marie Myers

San Joaquin Gardens FoundationChair: Tory Sherman; Members: Robin Bushell,Janet Gremminger, Harold Hansen, Cleo Hastings,Ray Hayworth, Nancy Jen, Betsey MacCracken,Harley Sowell, Keli Swales, Rebecca Williams

The Terraces of Los Gatos ResidentFoundationChair: Britt Saterlee; Members: Lamar Allen,Pam Bancroft, Cynthia Biasca, Helen Brazil,Alex Candalla, Janet Engle, George Fullmer,Madelyn Furze, Kern Hamilton, Dorothy Miller,Karl Mueller

The Terraces of Phoenix FoundationChair: Ralph Elsner; Members: Lou Binick, GordonBottemiller, Ann Campbell, Jim Dean, Leon Gean,Dick Kopp, Sabin Levenson, Arlyne Miller, BettyPottroff, Andrea Schulte, Ron Wilson

Valle Verde Endowment & DevelopmentCommitteeChair: John Mandle; Members: Dorothy Burkhart,Sally Mandle, Roy Martinez, Ron McConnell,Dr. Fran Preston, Eleanor Simmons, Sue Watkins


The Impact of the Foundation: Affordable Housing

Ten years ago, the ABHOW Foundation discernedthat it could play a role in raising financial support for the affordable housingcommunities of ABHOW. The communities, a total of 19 in California andWashington, provide government-subsidized apartments where residents payno more than 30 percent of their income toward rent. For seniors on fixedand lower incomes, the housing is a godsend – secure, quality apartment livingthat seniors can afford along with their other expenses for food, clothing andmedicine. Construction financing of affordable housing leaves scant funds foramenities, so ABHOW does what it can to augment the housing with supportiveservices and features that improve the quality of life. And here is where theFoundation’s giving by design has great impact.

In 1997, the Foundation launched the ABHOWAffordable Housing Assistance Grant Fund, which supplies money for such items as kitchen equipment,indoor and outdoor furniture, paratransit buses,sound systems for the hearing impaired, securityfence and video monitoring equipment, plus fundingfor special activities.The primary fund-raiser for thegrant fund is the annual ABHOW Foundation Golf

Classic.The 10th Classic, held Oct. 9, 2006, at theRound Hill Country Club in Alamo, Calif., netted$121,086.With a decade of tournaments, and thesupport of sponsors, auction donors and golfers,the Foundation has increased the Affordable HousingAssistance Grant Fund to $528,509 to ensure thatresidents enjoy a life, not just a place to live.

The annual golf tournament provides an enjoyable venue to raise funds for low-income seniors.

Transportation vehicles are just one example of howABHOW’s affordable housing communities use their grants from the Foundation.


The Impact of the Foundation: Affordable Housing

Saluting A Housing Champion

In 2007, the Foundation added a second event toraise money for the grant fund – the First AnnualABHOW Foundation Affordable Housing RecognitionDinner. The May 15 event was a huge success on allcounts. More than 450 people attended the dinnerat San Jose’s Doubletree Hotel to honor the Rev. Dr.J. Alfred Smith Sr., pastor of Allen Temple BaptistChurch in Oakland and a champion of affordablesenior housing.

It was Smith’s vision that led the church to estab-lish nearby Allen Temple Arms in 1981.Today, 177affordable apartments are provided through AllenTemple Arms I and II and Allen Temple Gardens.Plus, Allen Temple Manor provides an additional 24 apartments for people with HIV/AIDS and otherdisabilities. Each residence is managed by ABHOW.

The event provided an opportunity to celebrateSmith’s passion to ensure that Oakland’s seniorsenjoy the safety and security of affordable housing.Through the generosity of sponsors and attendees,net proceeds from the dinner and auction totaledapproximately $25,000.

The Rev. Dr. J.Alfred Smith Sr. was honored by the Foundationat its First Annual Affordable Housing Recognition Dinner.

Lewis Sellars (center), administrator of Broadmoor Plaza and member of the Allen Temple Baptist Church Male Chorus, performs at the First Annual Affordable Housing Recognition Dinner.


Financial Report

0

50,000

100,000

150,000

200,000

$ 250,000

2004 2005 200620032002

$94,337 $138,595 $251,567$92,270$13,440

Charitable Gift Annuities

Charitable gift annuities (CGAs) are the centerpieceof growth for the Foundation. Residents enter intoCGA contracts with the Foundation, which guaranteesa fixed percentage income for the life of the purchaser.In addition, the purchaser receives a tax benefit inthe year of the gift as well as receiving a portion of income tax free. Upon maturity, the balance ofthe CGA is transferred into the endowment of theresident’s community, where it will work in futureyears to provide benevolent care to those who out-live their assets.

Year-End Appeal

As the end of each calendar year approaches, theFoundation embarks on its year-end appeal.While residents, staff and board members make year-end taxand gift decisions, it is hoped that they will considerthe Foundation in their tax planning process. Duringthe past three years this appeal has raised more than$601,270 in annuities, trusts and outright gifts.By comparison, the prior three-year periods raised$199,900.This growth reflects both donor aware-ness and active Foundation education.

Investments

The Foundation holds more than $49 million in assets. In addition to helping donors maximize their owninvestments, the Foundation’s work is to ensure that these collective gifts are wisely managed. In 2007, netassets reached their highest level in the Foundation’s 39-year history.The Foundation benefited from a robustmarket, which saw double-digit returns.The overall financial health of the Foundation is strong as the boardcontinues its prudent investment strategies.

0

100,000

200,000

300,000

400,000

500,000

$ 600,000

2004 2005 200620032002

$289,675 $217,366 $603,000$205,000$381,036

Year-End Appeal Totals

Charitable Gift Annuities Totals


Balance Sheet

Assets Sept. 30, 2007 Sept. 30, 2006Cash 44,583 586,462Marketable securities 37,456,893 33,703,977Accounts receivable, net 126,056 141,496Notes and other receivables 48,996 46,362Prepaids expense and deposits 19,968 17,877

Total current assets $37,696,496 $34,496,174Restricted cash 38,494 781,809Marketable securities 11,199,704 10,459,390Intercompany – due (to) / from 94,787 (57,912)

Total long-term assets $11,332,985 $11,183,287Total assets $49,029,481 $45,679,461

Liabilities and Net AssetsAccounts payable and other accrued expenses 10,073 7,744Accrued payroll-related liabilities 40,573 29,637Other current liabilities 118,431

Total current liabilities $ 50,646 $ 155,812Revocable trusts 1,125,542 1,913,990Obligations under Annuity Agreements 3,036,374 2,945,897Other long term liabilities 41,220Total liabilities $ 4,253,782 $ 5,015,699

Net AssetsUnrestricted net assets 34,566,005 32,165,871Changes in unrestricted net assets 2,655,281 2,400,134

Total unrestricted net assets $37,221,286 $34,566,005Temporary restricted net assets 5,804,992 5,731,104Changes in temporary restricted net assets 1,443,504 73,888

Total temporary restricted net assets $ 7,248,496 $ 5,804,992Permanently restricted net assets 292,765 281,481Changes in permanently restricted net assets 13,151 11,284

Total permanently restricted net assets $ 305,916 $ 292,765Total net assets $44,775,698 $40,663,762Total liabilities and net assets $49,029,480 $45,679,461


2007 Donors

Over $100,000

Richard & Marian DaviesAnonymous

$50,001 - $100,000

Robert BeckerHelen Chaun

$10,001 - $50,000

Leonard & Betty CherryNancy & Paul DeBellaGreystone CommunitiesRev. Gillette & Dr. Rosa JamesElizabeth KendrickFlorence B. KeyserMary Lou LayneDelores & Kari McGowenMarie MyersWinslow RandallMuriel SelfSodexho Senior ServicesChester & Helen TroudyJimmy WalkerZiegler Senior Living Finance

$2,001 - $10,000

Margaret AdcockJoe & Cherrie AndersonAuxiliary of the TLG

Gordon BassettSloan Bentley & Dan WeimerFrank & Cynthia BiascaBarbara BingerAlberta BrownMarion CilkerPamela ClaassenCovenant Health NetworkMargaret DuryeaKarin EckelmeyerLuella ElliottJoe & Terese FarkasDavid & Debbie FergusonGlynnDevins AdvertisingKern HamiltonJean Hammond & Michael KrasnerHansen, Hunter & Company, P.C.Rachel HaynesIrwin.Pancake ArchitectsJames E. Roberts-ObayashiDorothy D. JohnsonRon & Kay KallanderKerman Telephone CompanyKlink Farms, Inc.James & Florence LambertRuth LaughlinLockton InsuranceDouglas & Linda Loorz

Merrill LynchLydia Lee MoorePlymouth Village ResidentsAssociationAncel & Florian RomeroRoyal Realtors and Loan ServicesBritt & Janet SaterleeSeniority, Inc.Al SlutmanHarely & Johnnie SowellDoris SpoorJohn & Thelma TaylorTerraces of Phoenix GroupItsuo & Marian Uenaka

$501 - $2,000

Susan AckermanGalen & Gloria AdamEnitan AdesanyaADTCKathleen AlbrektsonJames & Margie AllenAllen Temple Church Deacon BoardAllen Temple Church Deaconess BoardAllen Temple Sunday School Class #9Allen Temple Trustee Board

The Foundation wishes to recognize the generosity of those who have designed their giving with ABHOW residents in mind. Wecan never say “Thank you” enough to those who give to others who are in need.We recognize these individuals and companies that have contributed to thegrowth of the Foundation and our mission during the fiscal year 2007.


2007 Donors(continued)

$501 - $2,000 (continued)

Carolyn AlstromAnonymousATHEDCOBenjamin BakkegardCornelius & Joyce BarentsErnest BarnesVirginia BarryNancy BeitzDiana BellJean BellBellflower Friendship Manor BoardMary Jane BenderLouis & Yoshiko BinickWilliam & Laura BirminghamKatherine BowenAda Marie BowersHelen BrazilPauline BridenbaughShirley BringDavid BrockBroward BrothersK. BrownleeDr. Stephen BunchRuth BunemanRobin BushellBill CassonMartha ClydeIdaleen ConklinEarl & Helen ConnolleyCP Bannor Funeral HomeAlbert CunninghamSarah CunninghamRobert & Dorothy DallyBarbara DeWolfElizabeth Doyle

Drawer Box SpecialtiesThelma DryDouglas EadieCharlotte Crabtree EberhardChalres & Frances EgoMargaret FordKenneth FosterAnn FreidellGerald & Miriam FriedlandChas & Bettye Jo FurbyHenrietta GeibLiliane GeisselerGoldfarb & Lipman LLPNeila GregoryRobert & Geneva GrossMadieu HackettLorraine S. HansenHardison, Komatsu, Ivelich & TuckerMary HarrisonCordia HarveyCleo HastingsLillian HaughtHoyt & Martha HickmanRuth & James HoggLloyd HowardVirginia HunterAlice HutchinsFrederick & Dorothy IrwinDon & Vi JacksonMr. & Mrs. Ivor JamesKaren JenneyFrank & Sandy JenningsLacy & Jaimie JohnsonDonald JonesJudson Terraces Board of DirectorsHoward & June Kambach

Eva KasparianMr. & Mrs. Benjamin KehMurry KernBarbara & William KlindtC. Imogene KnightMark & Charline KuntzLa Salle BankEdgar LaVequeHoward LawrenceEdith & Robert LefeberRobert & Chieko LefeberJean Thompson LeonardFlorence LightfootDaroly LloydBob & Ethel LoweJohn & Ruth LylesBetsy MacCrackenMarie MarleyMark MassieAlvin McLeanD.A. & S.C. MellichampMiddle Earth Investment, Inc.Johndalene & Edwin MitchellA.J. MooreThomas & Toni MorganMoss Adams LLPMargaret MullenRobert Ian MurrayWilliam NeffJean NelsonSheila NortonCranie OgataPhillip & Norma OlavarriThomas & Rita OsborneHarriet OyenJean Parret


2007 Donors(continued)

$501 - $2,000 (continued)

Clare PeltonFrank & Vera PerryIsabelle PhillipsE. Anne PidgeonAlice Jean PowerRobert PriceRuth PriestRealPage, Inc.June RectorGeorge RidayJane RieffelRichard & Mary Jeanne RosenquistRoundhill Country ClubSan Joaquin Gardens ResidentCouncilDr. Richard ScottEleanor & G. Neale Shaner

Julie & Sam ShanksTory ShermanLemoin & Melba SkilesJane SmithDean & Lois SmithConway & Marjorie SnyderDavid SonsAnna St. JohnRandy StamperRonald & Winifred StephanyCharles StephensonRhoda StewartSummit BuildersStanley & Ardys SutphinKeli SwalesTemple Westlake NeighborhoodDevelopment Corp.Richard & Lois Thomas

Herman ThorntonLaurel ThorntonTitus-Water Corp.Shy TravainiMarcia VaileJohn Van AkenBoyd & Maxine WalkerWalker Realty GroupMargaret WeitkampJoyce WestDel Jeanne WestMarion WhitsellCharles & Audrey WilkinsonAgnes WishekWoodruff Sawyer & CompanyTomoye June Fujita YamasakiLois YoungMatthew & Linda Zale


Board and Staff

Board Members

Frank JenningsBoard Chair

Lou Binick

Stephen Elliott

Linda Zale

Enitan Adesanya

Joe AndersonEx Officio/Senior Vice President

David B. FergusonEx Officio/President

Leonard KellyVice President

Suzette LuerDevelopment Coordinator

Foundation Staff President EmeritusDr. Richard E. Ice

AuditorsMoss Adams LLP,San Francisco

American Baptist Homes Foundation of the West

6120 Stoneridge Mall Road, Suite 300Pleasanton, CA 94588800.222.2469 ext. 7151

www.abhow.com/foundation

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