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Endowment Gifts

Youth in Southwest Washington are in Crisis

The numbers of abused, neglected, runaway, foster, and underserved youth between the ages of 12 and 21 increase daily as social structures and family ties fray, weaken, and collapse.  Many of these young people drop out of school without any skills for meaningful employment—or even the most elementary knowledge of how to get along in the world.  Many turn to drugs, alcohol, prostitution, and other crimes.  They often wind up in the foster system, living on the streets, or in detention centers.  The impact on them as people is devastating; without help they are highly unlikely to lead useful and satisfying lives; further, their dysfunction carries on to future generations as they can’t set good examples for their children. 

At any given time, 500 or more youth are at risk in the five-county area surrounding Olympia (Thurston, Grays Harbor, Lewis, Pacific, and Mason counties).  The impact on the general public is also highly detrimental, with increased danger and consequent law-enforcement expenses, increased costs of social services, public health considerations, lack of productivity, and a general decline in the quality of life. 

Yet there are ways to help these young people turn their lives around, ways to help them lead lives that are valuable to them and to society, ways to show them how to raise good families.

Community Youth Services is a Big Part of the Solution

Community Youth Services has served the youth of this region since it was founded in 1970 by civic-minded citizens concerned about the increasing numbers of youths involved in the criminal justice system. 

For nearly 40 years, CYS has grown, changed its name and the wording of its mission, and added new programs to fit changing times, but it continues to support “long-term security, stability, and growth in high-risk youth and families through a continuum of innovative services, community partnerships, and advocacy.”  The more than 3,000 at-risk children, teens, and their families we serve annually often have nowhere else to turn. 
Today, CYS is the largest and most comprehensive nonprofit child welfare organization in southwest Washington and is nationally accredited by the Council on Accreditation for Children and Family Services.  Accreditation assures our community that CYS programs and services meet the highest standards.
 
In addition to its impact on youth in the five-county region, CYS has created programs and influenced legislation that affect youth throughout the state.  

Current programs cover three main areas: 

  1. Youth and Family Support Services (Rosie’s Place, Street Outreach, Independent Living Skills, Family Preservation, Family Reconciliation, Juvenile Diversion, Suicide Prevention, and Readiness to Learn)
  2. Residential Services (R.I.S.E. Transitional Housing, Haven House, Therapeutic Foster Care, and Foster Care Assessment)
  3. Employment Readiness and Job Training (CareerTREK, AmeriCorps/Youth in Service, Foster Care-to-College Mentoring Program, Readiness to Learn, and Washington Reading Corps). 

Community Youth Services' Work Has Only Begun

These programs work toward the vision CYS has of a community where every child grows up in a loving home and supportive neighborhood and is able to achieve his or her full potential. 

CYS undertakes a strategic planning cycle every four years to assess our services, our current environment, our agency and staff strengths, and identify potential areas for improvement.  Our previous strategic plans have helped us focus resources to meet our goals, such as becoming accredited in 1998, purchasing a new headquarters building to expand our operations in 2001, opening our Rosie’s Place drop-in center in 2004, hiring a Human Resource Director in 2004, and creating a 1.5-month operational reserve in 2008.  All of these efforts created a more stable organization, better able to provide effective services for youth.  Goals for our 2009-2011 strategic plan include continuing to expand our continuum of care, diversifying our revenues, improving our organizational effectiveness, implementing several best practices, increasing staff and board longevity and developing an agency-wide quality assurance program. 

The following strategic goals will guide us in fulfilling our vision for the future:

  • Strengthen and expand the CYS Continuum of Care by creating a strong web of services and working to eliminate service gaps for youth within CYS and the community.
  • Dramatically increase and diversify the revenues for CYS by inspiring and cultivating external, non-governmental support that will be considered by donors to be the best investment they can make in our youth and future.
  • Continue to improve Organizational Effectiveness and Efficiency to ensure positive youth outcomes while maintaining and enhancing fiscal responsibility. 
  • Implement Best Practices and core principles of restorative justice, evidence-based approaches, service learning, solution-focused clinical work, positive youth development, and an open environment and create an agency-wide understanding of what those elements mean and each of our roles to improve our practices.
  • Increase Staff and Board Longevity and satisfaction by addressing compensation, professional development, and effectiveness of staff, supervisors, and board members.
  • Develop and implement an Agency-Wide Quality Assurance Program in order to provide a solid foundation for developing, tracking, reporting, and supporting positive outcomes for youth and families.

Why Are Private Gifts Necessary?

Since its beginning, individual donors, local businesses, corporate and private foundations, collaborative community partners, and volunteers have been a source of strength to CYS, providing leadership and advocacy as well as vital gifts and grants.  Historically, however, the majority of CYS’s operating funds have come from government fees for services performed.  Today, though, CYS operates in an environment of decreasing federal, state, and local reimbursements.  Like other charities in our community and across the country, CYS is feeling a budget squeeze as a critical economic downturn eats into government finances and forces cutbacks in money for social services and other causes.  Finances are likely to be even tougher in the future.  If the funding ends or is cut severely, programs and projects can disappear.  We could not only lose desperately needed programs, but also lose knowledgeable, talented, and dedicated members of our team.  This can cause incalculable damage to children and youth who need more help, not curtailed services.

Rationale for an Endowment

Significant private resources will be needed to ensure that CYS can continue providing vital services for future generations of young people in our extended community.  As part of its efforts to ensure that it can carry out its mission despite changes in government policies and the economy, CYS is building its endowment.

An endowment can be thought of as a “savings account” where the principal of the fund is never spent.  Only a portion of the earnings may be withdrawn and used each year, and the rest of the earnings are added back to ensure that the fund retains its value over time.  The endowment can provide a dependable stream of income to augment annual operating revenue. 

Just as with any savings accounts, endowments can be built over time with additional contributions. 

Compound interest allows endowment funds to have a much greater impact over a long period of time than if they were spent all at once. 

The Community Youth Services Board of Directors had the vision to establish CYS’s endowment fund in 1995, allocating part of a generous unrestricted bequest from Mrs. Freda Eckberg, a devoted child advocate and CYS supporter.  Now, as part of its long-range plans, the CYS Board has determined that endowment will be a crucial resource for the future as well as an ongoing reflection of CYS’s fiscal responsibility.  Without an endowment, there is no cushion against fluctuations in operating revenues and annual fundraising.  With an endowment, CYS can be assured that necessary dollars are available to pay for current and new programs, ongoing facility maintenance, and needed expansions.  In bad economic times, endowment income can help keep essential programs going.  In good economic times it can enable CYS to expand its programs and facilities to meet the changing needs of our community.

Annual Gifts vs. Endowment Gifts

CYS will continue to need annual gifts to support ongoing operations, and we are not asking donors to give to the endowment instead of giving to operations each year.  Annual gifts and endowment gifts are two separate opportunities for supporting our work, and we need both.  Most people make annual gifts from income, while making endowment gifts from capital assets.  Some plan to continue making annual gifts as long as they live, but at the same time want to continue supporting CYS after they are gone; a planned gift can establish an endowment that generates the value of that annual gift in perpetuity after the donor is gone. 

How Will Endowment Gifts be Used?

Donors determine whether they want their endowment gifts to be unrestricted or restricted.  The proceeds of unrestricted endowment can be used by CYS wherever the needs are greatest at the time the income is received; it is especially helpful because it is so flexible.  Restricted endowment, on the other hand, is specifically earmarked by donors for particular purposes.

As unrestricted endowment builds, it can generate significant income to support four crucial priorities:

  • Current programs (not sufficiently covered through fees and government revenue) ensuring the highest quality care and enriching the lives of those we serve. 
  • New programs that respond to changing and emerging needs of our extended community.
  • Supporting strategic initiatives, including implementing new evidence-based programs and providing tools for case managers.
  • Maintaining the high-quality condition of all CYS facilities for the benefit of future generations and in respect of the generous investment already made by our supporters.  These facilities currently include the central administrative/multi-service center, Haven House, and a variety of single homes and multi-unit dwellings used for transitional housing.

Donors may restrict their endowment gifts, if large enough, to areas of special interest to them.  CYS will work with donors, as outlined below, to ensure that restricted endowment funds will both support CYS’s ongoing mission and be used as donors intend.

CYS Will Steward the Endowment Wisely

CYS’s accountability and fiscal responsibility accompany caring as hallmarks of its operations.  CYS has always maintained a lean administrative structure in order to keep organizational expenses as low as possible while keeping the quality of services high.  In 38 years of existence CYS has always operated in the black. 

Gifts for endowment (made either during a donor’s lifetime or at death) are prudently invested to provide a never-ending source of money for CYS.  Endowment funds are invested for both income and growth, and only a portion of the total earnings may be withdrawn and used each year, in perpetuity.  Thus the principal gift not only remains untouched, but actually grows to at least keep pace with inflation and to maintain its value over time. 

Because CYS already has an endowment, board-approved investment policies are in place.  While the size of the fund rises and falls to some extent, reflecting general market conditions, our prudent investments are safeguarded from extreme swings.  Further, we allocate funds annually based on a 16-quarter formula that evens out market fluctuations and provides funding both for expenditure and to build the principal.  This helps ensure that the value of endowment funds is not eroded by inflation.
CYS will work with living donors of restricted endowment gifts to document how they wish their gifts used in perpetuity.  Board policy is that unrestricted bequests and other estate gifts of less than $25,000 are placed in the general endowment fund, while unrestricted bequests and other estate gifts of $25,000 or more are placed in separate endowment funds named for the donors.  The Board intends that such named funds will retain the donors’ names in perpetuity.

Gifts of any size will be publicly acknowledged, and named funds ($25,000 or more) will be listed perpetually in annual reports.  Individuals who inform CYS of commitments through their estate plans, large or small, will become members of CYS’s Legacy Circle and will be honored at CYS events and other social gatherings throughout the year.

Named Endowed Funds

“The Endowment” (capital E”) refers to all assets set aside and invested to provide ongoing maintenance for CYS.  “An endowment” refers to any of the individual accounts—unrestricted or restricted, named or unnamed—within The Endowment. 

Special naming opportunities are available at $25,000 and more, and named endowments can be created in several ways.  A named fund can provide a meaningful permanent remembrance to honor a living loved one or memorialize one who has died, or to fulfill one’s own long-term philanthropic goals.  CYS will work with the donor on a brief biography of the person named, so that future generations will know something of the honoree’s life and philosophy.  Such funds will still be meaningful memorials many years into the future.

Donors may restrict the purposes of their named funds to support particular needs or interests, or leave their named funds unrestricted, with the proceeds to be used where the needs are greatest at the time they are available.  Unrestricted gifts are especially helpful, as needs will change in the future.

We encourage donors who wish to create a named endowment but cannot do so immediately to consider a five-year commitment, for example with an outright gift of $5,000 and a pledge of $5,000 a year over the next four years.  Spreading gifts out over more than one year enables supporters to participate at what is, to them, a truly meaningful level.   
 
Named individual endowments can be built to considerably larger sizes over time with additional gifts in any amount, and many larger naming gifts will also include a bequest or other deferred component.  For example, someone might make an outright gift of $50,000 worth of appreciated stock, add to the fund through a charitable trust, and add more through a bequest and memorial gifts. 

How to Give

Individuals may make their gifts to the Endowment in one or more of the following ways:

  • Outright current gifts of cash, appreciated securities, or other appreciated assets, such as real estate, that can be liquidated.  Such gifts will help build the endowment in the near term and set an example for others.  Donors can gain an immediate charitable income tax deduction and also avoid all capital gains taxes on the gift.
  • Charitable trusts and gifts of life insurance.
  • Bequests through wills or living trusts, and gifts from qualified retirement plans.

Donors of gifts of less than $25,000 may give to the CYS general endowment fund or restrict their gifts for any of the three general purposes named above.  A donor does not have to be wealthy to leave a significant bequest after his or her lifetime.  Gifts of every size are vital and can help us move forward together. 

CYS representatives with specialized gift planning knowledge can help individuals or their advisors explore the best ways to give in light of specific philanthropic wishes, assets, types of tax deductions that might fit a given situation, and CYS’s needs.  A carefully structured gift can be meaningful to the donor and have a profound impact on improving the lives of countless young people.

In Closing

As the population of our area increases and the fabric of many families frays, CYS in the future must be able to respond nimbly to shifting needs.  Gifts in support of the endowment will give CYS that ability.  We will thus be able to continue our work of transforming the lives of vulnerable local youth—which leads to a community that is changed for the better.

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