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Christchurch Foundation chief executive Amy Carter has plans to grow the fledgling organisation to have a $200m endowment fund.
The Christchurch Foundation was thrust into the limelight when it attracted $6 million in worldwide donations following the mosque attacks. TINA LAW investigates the fledgling foundation and discovers it has a lofty $200m goal.
A fund set up to attract money into Christchurch has cost ratepayers $1.1 million, and by 2023 will have cost $3.5m.
But Mayor Lianne Dalziel says the Christchurch Foundation has already proven its worth by securing $2.75m from the private sector for the city’s new library, T?ranga.
The foundation, oversee by an independent board, has succeeded where the Government failed, says Dalziel.
Government attempts to secure philanthropic funding for big anchor projects like the library, a now defunct art trail and the metro sports centre did not attract a cent and in 2015 those plans were abandoned.
This led Christchurch City Council to begin setting up an independent charitable organisation to bring much-needed private money into city.
Fast forward four years and the city now has the Christchurch Foundation, which launched in earnest last year and has so far secured $3.25m for the city over five years from six businesses.
Amy Carter, the foundation’s chief executive, has big aspirations. “We want to have a $200m endowment fund for Christchurch. Imagine what we could do with that.”
The fund largely relies on people leaving it money in their wills, which makes it difficult to predict when it might reach that target, she says.
There are two main ways people can contribute. The first is via a business partnership scheme, where businesses must contribute a minimum of $50,000 a year for at least five years.
The businesses can decide where they want that money to be spent and it can be on anything, not only council projects. Spark, TSB and Southbase Construction stipulated their money be spent at T?ranga and KPMG decided it wanted to fully fund a “thinker in residence” programme. That programme started last year with Hila Oren?, chief executive of the Tel Aviv Foundation, spending time in Christchurch in September. Four more thinkers are planned over the next four years.
Carter is also about to announce a seventh business partner and has identified a total of 32 businesses that might be willing to part with cash or services to support the city.
“We are all about making it easier for the donor to achieve their dreams for the city. Our opening question is ‘what are your dreams and aspirations for Christchurch’, then we match the donor to the causes aligned to what they’re trying to achieve.”
Another way people are encouraged to donate is via bequests.
People give cash, which is invested through the foundation’s investment manager JBWere. Profits are distributed annually back to the causes stipulated by the donor. The foundation will take 2 per cent of that return as an administration fee.
One of two endowments already secured is from a woman who has chosen to support three women’s health charities following her death.
The woman, who wants to remain anonymous, says her closest family are cousins living in England and she was shocked to discover just how much tax the UK government would take from any bequest she left so she decided to rethink where she left her assets.
She was attracted to the foundation after being concerned about what would happen to her bequest after her death.
“How can the donor be assured that it won’t be frittered away, but used as intended?”
The woman says she was comforted by the level of oversight the foundation will provide to her selected charities following her death.
The second endowment is a “give while you live” donation to the arts where the husband and wife donors want to build up a fund of $100,000.
Once a critical mass of more than $20m in managed funds is reached the foundation will be self sufficient, Carter says.
Until that time, the foundation is reliant on the council to fund its day to day operations.
The council funding will end in June 2023 and Carter says the foundation will need to be stand alone by then.
Carter says her intention is to run the organisation “very lean and mean” and keep overheads low.
Council received advice in February 2017 the foundation would need $900,000 annually to operate, but Carter says she is managing to stay within $600,000.
She is doing that by renting desks at Christchurch NZ’s offices in the BNZ Centre rather than setting up an stand-alone office.
“Subletting is significantly more cost effective.”
Carter, who owns business consultancy Perception, is paid $165,000 a year, plus a car allowance and a car park.
She is unapologetic for being paid well.
“There seems to be preconceptions in New Zealand that if it’s a charity people should work for free, but to get the skill sets and experience to achieve what you want comes with a cost.”
She says she works well over 40 hours a week for the foundation.
“I own Perception so I’ll always work for Perception because that’s my business, that’s my nest egg and I’ll need a job when I don’t work for the foundation.”
Foundation board chairman Humphry Rolleston says Carter has the people and corporate skills needed to establish the foundation in Christchurch and around the world.
“Furthermore she is a huge believer in philanthropy and practises what she preaches.”
Perception has signed up as one of the six business partners and has committed to giving $50,000 a year for 10 years. Carter says the contribution will be a mix of cash and services.
Carter has just employed two new staff members, and says they will also be paid well.
“It’s what they are worth in the market in New Zealand.
“We want to be here forever so we can administer and make their wishes come true forever. Most donors understand we need to have staff to support and administer that.”
Given the foundation’s aspirations, a staff of three is a small team, Carter says, but she believes her model will work.
“I don’t think we should have a heavy overhead structure. That is not smart.”
MAKING A DIFFERENCE
Wellington’s Nikau Foundation employed six staff in the year to September 2018 and spent nearly $340,000 on staff and volunteer costs. Its total expenses were $600,000. The Auckland Foundation spent $370,000 on staff related costs and its expenses were about $545,000 in the year ended March 2018.
The Christchurch Foundation is one of 17 similar organisations across New Zealand. Collectively they have $120m under management and three times that figure is coming in anticipated bequests, Community Foundations of New Zealand executive officer Eleanor Cater says.
They have returned in excess of $20m to communities over the past five years.
“We would say that it’s really important for Christchurch to have taken this step to establish and to start the process of building this philanthropic community asset for the future.”
Cater says it can take about 20 years for a foundation to make a significant difference to the community.
New Zealand’s oldest foundation, Acorn in Tauranga, is 16 years old and returns $1m to the community each year. Its $28m endowment fund is set to grow by a further $240m from gifts in wills.
The world is poised to see the biggest intergenerational wealth transfer in history from the baby boomer generation to the next, she says.
“What a wonderful opportunity this presents for community foundations like the Christchurch Foundation to provide the means for people to be a part of community transformation.”
In a bid to increase donations and build its endowment fund, the Christchurch Foundation is thinking globally.
Carter is travelling to London in July to launch the foundation as a UK charity. A number of causes are heading along too including the Arts Centre, the Cathedral Reinstatement Trust, Scape, Christchurch Symphony Orchestra and the Canterbury Cricket Trust.
“It’s always been the plan to set up in cities where there is a critical mass of Cantabs.”
Creating a charity in the UK means expats can get a tax credit when they donate, something they do not get if they give directly to New Zealand-based charities.
Carter also plans to launch in Australia, the United States and possibly Hong Kong.
“The whole idea is for this big funnel that brings money back and feeds it back to the causes here.”
The foundation has already popped up on the radar of some big international funders including the Rockefeller and Gates foundations after it set up a fund to accept worldwide donations following the March 15 Christchurch mosque shootings. The fund now has more than $6m in it and will be used to support families and Muslim communities impacted by the shootings in the long-term.
Dalziel says having the capacity to immediately set up a fund following a disaster or tragic event is another reason why she wanted to see the foundation created.