Endowment

The North Shore Art League “Art Raises the Spirit” Endowment Campaign
FAQ (Frequently Asked Questions)

For 84 consecutive years the North Shore Art League (headquartered in the historic Winnetka Community House) has been a leader in education, funding, and awareness of Visual Arts in and around Chicago. As an arts supporter you know that much work remains. Our members clamor for greater exposure to fine art and artists; school and public funding for the arts has been cut; and talented artists can not afford quality instruction and materials. Consequently, The North Shore Art League is launching its ‘Art Raises the Spirit’ Campaign to provide the stable funding source to achieve the collective goals of its Board, alumni, and prominent Faculty.

 

North Shore Art League Endowment Campaign Essentials

 

What is an endowment?

An endowment is a collection of donations that is invested in perpetuity and has specific rules about how it can be used. The rules are established in the Bylaws (include link to pdf on website here—PDF has not been provided). For this endowment, one of the rules is that only the interest income generated by the endowment can be spent by the North Shore Art League Board – the principal is invested and protected. The endowment fund is professionally managed and independent from the North Shore Art League operations, but is overseen by a common Board. The biggest benefit of an endowment gift (compared to an Annual Fund donation) is that the endowment donations are a gift that keeps on giving. For instance for every $10,000 donated to the endowment campaign, we would earn perhaps $500-1,000 in interest income to use each year without reducing the initial gift. Endowment investment income will provide a stable funding source for such purposes as scholarships, awards, and facilities upgrades, or other directed purposes according to the endowment Bylaws.

 

How does this differ from the Annual Fund?

The Annual Fund will continue to be an essential portion of our overall operating budget. It currently accounts for more than 10% of our ‘income’ each year. Donations to the Annual Fund are unrestricted and used for a variety of operational and cash flow needs throughout the year. The Endowment Campaign is a once in a generation effort to allow us to get ahead of our funding needs once and for all. For 84 years we have raised just enough money to cover our expenses each year – and much of our scarce and talented board member time goes to raising money each year. We hope that each of you will continue to give to the annual fund but to separately consider a onetime donation to the Endowment. Note, the Endowment Campaign will run for three years (until New Years Eve 2010) and your pledge amount to the Endowment can be split across tax years if that is helpful to you and your family.

 

Is this really new, haven’t we had endowments in the past?

The North Shore Art League has received and managed endowed gifts during its history. For instance, we have received generous donations and commitments to provide and fund annual awards to New Trier art students. What is different going forward is that now we will have a combined pool of invested funds – some directed to certain activities, and others unrestricted. Collectively, these gifts in their entirety will make up The North Shore Art League Endowment. For investment purposes, the individual endowment gifts (unless specifically directed otherwise) will be pooled into a single fund and professionally managed. Pooling endowment gifts allows the North Shore Art League to achieve greater diversity in its investments, lower its investment costs, and attain the maximum return on donors' gifts.

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Why does NSAL need an endowment? Why now?

For 84 years the North Shore Art League has raised just enough money each year to cover its annual operating costs. Often, important educational and scholarship programs were put on hold or shelved because we could not know ahead of time whether we could afford to do them. Funding for the arts continues to drop in our state and community and our costs (especially rent) continue to rise. Without an Endowment we will continue to have to raise prices on classes or conduct ever more fundraising each year to cover costs. The amount and duration of time that the board spends on fundraising already diverts from our core mission. The Endowment allows us to plan more strategically, focus scarce board member time on the goals of our constituents, and permanently secure our studio and facility needs.

But why now? -- Because we are ready. We have a strong, talented, and enthusiastic board. Our membership and financial position are at some of the highest levels in our history. We are bursting with plans that will continue to help us fulfill our mission. Donors are asking to help in larger and more complex ways (e.g. bequests, scholarships, multi-year gifts, appreciated securities) than we can typically handle.

 

How much are we trying to raise?

We won’t be publishing a target but we have a few goals in mind. A simple wish would be to generate enough interest each year that we could cover our studio costs. In order to generate $50,000 a year to cover rent we would need approximately $1,000,000 in investments earning 5% in an average year (less of course in a good investing year). Additionally we would like to free up the board member talent and funds to be able to launch programs like a quarterly lecture series, or an artist-in-residence program. These could be restricted endowed gifts where the gift amount self-funds the expenses associated with a particular program over time. Each of these might be a $50-100,000 endowed item. We have a great need in the community for our services and consequently we have big plans. The campaign will run for 3 years -- until December of 2010. We will know much more about realistic targets after the first few months of the campaign. But, to keep it in perspective, any endowment size is better than what we have now.

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How much do I need to give?

Only you and your family can determine what amount is right for you to donate. Whatever dollar amount you can give is helpful. Since this is a once in a generation request, we do hope that you can stretch a bit more than usual. We have specifically not set a target dollar amount because of the diverse backgrounds of our membership and patrons. Our Board has already made significant contributions to launch the endowment and we are well underway. Any contribution will be of great value.

 

Who will know what I give?

Your donation is private and can be completely anonymous if you choose. Only our bank and the Investment Committee see the incoming pledges and donations. The Investment Committee will report to the Board on no less than a quarterly basis regarding aggregate (not individual) donations, investment allocations, and returns. Some donations will be tied to specific named endowed items or may have a condition that requires broader Endowment Committee and Board review, but your privacy is maintained subject to your wishes. All donors will be recognized as founding contributors on our permanent Endowment Campaign board to celebrate your commitment and generosity. We’ll also recognize levels of giving in others ways but don’t have all the details worked out yet.

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Why the North Shore Art League Need versus Other Worthy Causes?

It seems every year there are more people and organizations which need our scarce time, attention, and resources.

Each of us spends time and money on the things that we believe matter: universities, churches and synagogues, worthy charities, schools, family members, or folks simply in need of help.Even in the field of giving to the Arts there are numerous choices – all of which have their role. We know you can’t give to all that you’d like so please consider the North Shore Art League because:

  • In a world that seems less humane every day the NSAL puts humanity and arts back into the community.
  • Our classes have profound impact on dozens of people every day and more than 1,000 students per year.

For 84 consecutive years the NSAL has:

  • Lit fires in bright-eyed children and guided their first journey into fine art
  • Created thousands of artists in all phases of their lives
  • Provided friendship and comfort to artists who otherwise painted alone
  • Curated superb fine art into provocative shows
  • Revived the passion of long repressed artists
  • Run a world-class print room --
  • Seen our award-winning faculty, and alumni emerge on the world stage
  • And we are still just getting started.

Gifts from members, alumni, and friends will enable the North Shore Art League to reach out and influence more young artists, offer scholarships to excellent or needy students, attract outstanding faculty, make essential equipment available to the local community, enhance the facilities — small things in the big picture, but indispensable to what is needed of us.

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What options do I have for designating my gift?

Your most versatile option is to provide an ‘unrestricted’ gift to the endowment, because the president and Board will direct the interest earned on this money to the areas of greatest need. You can also have a meaningful impact on programs throughout the NSAL by tailoring your gifts to a particular area of interest, such as a type of class, portion of our NSAL space, faculty member, lecture series, or project.

 

How is an endowment established?

Planning an endowment gift can be a creative, challenging, and rewarding process. Once you choose to make a gift to North Shore Art League, your personal giving program can be structured to fit your needs and financial goals. North Shore Art League endowment leads can help you choose the most beneficial gift asset and the best method for transferring it to the NSAL to achieve your giving objectives. A minimum of $20,000 can establish a separate directed endowment at the North Shore Art League through any outright giving method using cash, securities, or personal and real property. Other minimums may apply, depending on the project. Gifts of a life estate or life insurance are other possibilities. Endowment agreements, signed by the donor and North Shore Art League, delegate to the NSAL the responsibility to administer the funds according to the donor's wishes in perpetuity.

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What options do I have for creating a named endowment?

Named Faculty positions, scholarships, and facilities are a few of the opportunities that North Shore Art League provides for donors to associate their name or someone else's with North Shore Art League. Many of the named opportunities have minimum permanent or annual funding requirement to ensure that income will be adequate to achieve the donor's intent, both now and in the future. We can provide you with a list of available naming opportunities, or you can discuss with us your requirements and we can create an opportunity for you.

Examples:

Faculty:

  • $50,000: The [Donor Name Here] ‘Artist-in-Residence’ Program – This program would provide the funds to allow for NSAL to attract and house a named artist to spend dedicated time instructing and/or lecturing at NSAL. This program would remain flexible to the needs of the artist. For example this endowed program could pay for transportation, housing, materials, and a stipend to an important artist to return to our studio for a weeklong program of lectures, juried events, and instruction.
  • $50,000: The [Donor Name Here] Faculty Position – much like in academia, this endowed faculty position would to help attract and retain the best instructors available.

Facilities:

  • $100,000: The [Donor Name Here] Art Studio -- Our lovely and unique skylit studio is one of the great art spaces to create. It could be named in the honor of the donor or their loved ones. NSAL provides signage and biography of donor and the naming rights apply to the main studio regardless of the ultimate North Shore Art League location.

Branding:

  • A variety of naming rights are available for the annual shows and other events. For instance at $50,000: The [Donor Name Here] Annual Members Show? Donor receives prominent naming rights and signage in 5 locations, all lead-in advertising, etc.

For any additional information regarding the NSAL endowment Campaign please contact the North Shore Art League and ask for Arnim Whisler.

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What options are available if you want to make a charitable gift?

There are many ways you can make a gift to the charity of your choice. Here are some of the options you have:

  • Outright gifts. You can simply write a check or give cash to an IRS recognized charity and take a tax deduction if you itemize deductions on your income tax return and keep receipts. You will need a receipt from the charity for gifts of $250 or more.
  • Will or trust bequests. You can create a bequest by including a charitable gift provision in your will or trust document. Upon your death, your estate may receive an estate tax charitable deduction for the value of the bequest.
    Sample language for Last Will and Testament
    “I hereby give to the North Shore Art League, an Illinois not-for-profit corporation, with its principal place of business at Winnetka, IL:
    The sum of $________________ [amount]
    AND/OR The following described property: ________________ [description]
    AND/OR ____% [percent] of the residue of my estate
    to be used for ________________ [stated purpose] by the North Shore Art League.”
  • Beneficiary designation gifts. You can name an IRS recognized charity as the beneficiary of your life insurance, annuity, trust, IRA or other legal contract. Your estate may receive an estate tax charitable deduction for the value of your assets transferred to the charities after you die.
  • Life insurance gifts. You can purchase and gift a new contract to a charity, or gift an existing contract. The contract's value and premiums, gifted to the charity, may qualify you for an income tax deduction. Upon your death, the insurance proceeds go to the charity.
  • Investment gifts. You can transfer your ownership of an investment (i.e., land, a mutual fund, a stock, etc.) to the IRS recognized charity you choose. Generally you can receive a charitable income tax deduction for the gift you've made while you're living if you itemize deductions on your income tax return. You may be able to reduce or eliminate significant capital gains and estate taxation through this type of gift as well.
  • Gift annuity. You can transfer money or property to a selected charity in exchange for a fixed income for your and/or a survivor's lifetime. Generally, you can receive a charitable income tax deduction for the difference between the market value of the gift and the value of the retained annuity.
  • Traditional IRA gift. With preplanning, funds in a traditional IRA can be given at your death to an IRS recognized charity through your IRA beneficiary designation. The IRA funds pass to your designated charity after death, escaping the income taxes due on the remaining funds. And your estate can generally receive a charitable estate tax deduction as well.
  • Zero estate tax gift. Your will or trust can be designed to pass along the maximum amount of estate assets possible to your children after death, estate tax free, through a family testamentary bequest. Typically the amount is equal to the current applicable estate tax exclusion amount. The remaining estate assets then are transferred to an IRS recognized charity through a charitable bequest, also estate tax free. This plan may result in a zero estate tax due on your estate.
  • Charitable remainder trust. You can gift money or property to an irrevocable charitable remainder trust in exchange for an income during your life and/or the life of your survivor. After death, any remainder value in the charitable remainder trust passes directly to the charity or charities you've selected. You may defer, reduce or eliminate capital gains tax otherwise due on sale of the assets. You also may receive an immediate charitable income tax deduction on the remainder interest of the property that passes to charity. Finally, the assets in the charitable remainder trust may escape some estate tax after your death as well.
  • Wealth replacement. Life insurance can be used to replace the value of the gift to charity. You purchase life insurance on your life equal to the value of property you plan to gift. At death, the insurance proceeds pass to your heirs income tax free. If a family member or an irrevocable life insurance trust purchases the insurance, then the proceeds may be estate tax free as well.
  • Wealth replacement trust, also called an irrevocable life insurance trust (ILIT). This irrevocable, living trust is created outside the donor's estate and is set up to own life insurance on the donor. The amount of life insurance the trust owns usually is less than or equal to the amount of property you plan to give to a charitable cause. Upon your death, your heirs, who usually are the trust beneficiaries, can receive the insurance proceeds from the trust both income and estate tax free.
  • Donor-Advised Fund, administered by a community foundation, allows you to play an active role in the grant-making process, while foundation staff perform the administrative chores. You (or a person you designate) recommend grants from the fund to the charities of your choice—at any time.

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What tax benefits can I receive from an endowment?

Specific tax and financial benefits that you can receive as a result of your gift depend on what type of asset you give and how you transfer it to the NSAL. You may be able to receive federal and state income tax benefits, avoid or reduce capital gains tax liability, and qualify for estate or gift tax deductions. Several types of gifts can provide tax benefits while offering a lifetime income to you and your heirs. We recommend you consult with your attorney or accountant for advice on the legal and tax implications of any gift you might make.

 

Investment Principles

North Shore Art League has three investment objectives:

  • Preservation of capital;
  • Protection of capital from inflation; and
  • Enhancement of capital through market appreciation.

A statement of investment policy approved by the NSAL’s Board of Trustees defines how North Shore Art League may invest the endowment funds. Emphasizing long-term growth, North Shore Art League invests the majority of its endowment funds in equities and the remainder in bonds and alternative investments. The Endowment will be managed by a 3 or 5 person appointed Investment Committee that serves as a subcommittee to the Board.

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How does North Shore Art League maximize the value of donors' gifts?

Strategic management of endowments increases the value of donors' actual contributions, generating more income for the supported programs and providing the NSAL greater financial stability and leverage. Intelligent asset allocation, professional and skillful investment management, and prudent spending policies will result in steady growth of the North Shore Art League Endowment.

 

What Happens in the End?

There is no end. While the formal Endowment Campaign will end in 3 years (New Years Eve 2010) we expect the Endowment Funds to help us literally forever. The income from your gift now is a gift every year in perpetuity.

 

What happens if NSAL Ceases to Operate?

While we don’t expect that to happen (84 continuous years!) we have included in the Bylaws a clause that mandates that any Endowment assets would be donated to a similar organization with similar rules.

 

How Can I get More Information?

Contact the North Shore Art League office at 847.446.2870 to get a list of current Endowment Committee members who will assist you in finding answers to your questions.

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The above answers are for general informational purposes only. The official Bylaws that govern the operation of the Endowment Fund and the Investment Policy can be provided upon written request.
The North Shore Art League is a 501(c)3 not-for-profit, tax-exempt organization and your contributions may be tax deductible to the extent allowed by law. Our tax exempt number is: E9944-3880-02.

 

Current Investment Committee Members 2008/2009

Dr. Richard V.L. Cooper, Managing Director – Houlihan Lokey.

Dr. Richard V.L. Cooper is a managing director at Houlihan Lokey and is responsible for Houlihan Lokey’s Business Analytics & Transfer Pricing practice. He has more than 25 years of professional consulting experience in a comprehensive range of business, economic, and tax issues, including strategic and market planning, supply chain management, and especially transfer pricing. He pioneered the development of Tax Effective Supply Chain Management, which continues to serve as one of the primary ways of integrating tax planning with business operations.

Dr. Cooper is a nationally and internationally known expert in Transfer Pricing and has been named regularly in the Expert Guides published by the International Tax Review/Legal Media Group as “one of the world’s leading transfer pricing advisors.” He has directed more than 300 transfer pricing projects covering a broad range of transfer pricing issues and situations, including the sale of tangible property, transfer of intangibles, royalties, cost sharing, performance of services, contract manufacturing, contract R&D, leasing, and inter-company loans and advances.

In addition to transfer pricing, Dr. Cooper has conducted and/or directed more than 100 client projects in corporate strategy, market planning, supply chain optimization, and regulatory analysis.

Dr. Cooper has served as an expert witness before U.S. Tax Court, Congressional Committees, the U.S. International Trade Commission, and courts of law. He is a member of many international business organizations and was appointed to the Industry Sector Advisory Committee on Trade in Services by the U.S. Secretary of Commerce. He has taught economics, econometrics, and international business and tax courses at both the undergraduate and graduate levels at UCLA, UCSB, Georgetown University, the University of Hawaii, and the Rand Graduate Institute. He is a frequent speaker on transfer pricing and business strategy, having given more than 250 speeches and presentations around the world on these and related topics.

Prior to joining Houlihan Lokey, Dr. Cooper was a partner at Ernst & Young, where he was Managing Partner of E&Y’s Economics & Business Analytics practice and, before that, Co-Chair of the firm’s Transfer Pricing practice. Before joining Ernst & Young in 1990, he was a partner at Cooper & Lybrand, where he headed C&L’s Economics & International Trade Services practice. Dr. Cooper spent the first eight years of his professional career at the Rand Corporation.

Dr. Cooper is Treasurer of the Village of Kenilworth, Treasurer of the Kenilworth Police Pension Fund, and a member of the Board of Visitors for the Economics Department at UCLA.

Dr. Cooper earned his B.A. and M.A. degrees, both in Economics, from UCLA in 1967 and his Ph.D. degree, also in Economics, from the University of Chicago in 1971.

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Arnim E. Whisler 3rd, North Shore Art League Endowment Chair

Arnim Whisler is the Fundraising Chairperson and an Executive board member of the North Shore Art League. As Fundraising Chair he is an appointed board member to the Endowment Investment Committee.

Arnim worked for and was a Global Managing Partner with Accenture (previously Andersen Consulting and Arthur Andersen) for 20 years (1985-2005). He held a variety of leadership roles. In his last role he was responsible for constructing and executing joint-ventures and large complex deals. During his time in this role he closed, transitioned, and managed a portfolio of more than $1.5 Billion in multi-year outsourcing deals. He was also the Global Communications Industry Strategist and was responsible for developing Accenture’s Communications Industry thought leadership and perspectives. Prior to these roles, Arnim was Global Managing Partner of the Communications, Media, and High Technology management consulting practice where he worked with numerous global clients. Arnim had many distinctions in his career including live appearances on CNN, numerous international speeches, articles, and interviews, and he is a published author. He was the youngest partner ever made in the Strategy practice and among the youngest Global Managing Partners at the firm.

Since 2006, Arnim has launched and is currently running a portfolio of his own companies (including Sisyphus Group LLC, ExquisiteandRare.com, Exquisite Homes, Women’s Premiership Soccer, LLC) and is actively evaluating, investing in, and managing other privately held entities.

Arnim earned his BS in Computer Science/Industrial Management (minor in Russian language) from Purdue University and an MBA from the University of Chicago (Finance/International Business).

 

Mark Fuller 3rd, Partner William Blair and Company Principal, William Blair & Company since 1983.

Mark began his career with IBM Corporation upon graduation from Northwestern University in 1979. He worked in technology sales at IBM until 1981. Mark matriculated to Northwestern’s Kellogg School of Management in 1981 and successfully graduated in 1983 with an M.B.A. in finance.

Mark joined William Blair & Company in 1983. He started in the Institutional Equity business, delivering research and investment advice to other investment advisors. After moving to Investment Management in 1990, Mark has had various responsibilities, including stints as portfolio manager for the Small Cap Growth team, co-manager of the William Blair Small Cap Growth Fund, and co-manager of the William Blair Growth Fund. He is currently co-manager of the William Blair Tax Managed Growth Fund and is co-manager of the Tax Efficient Growth team. Mark also works directly with a select number of families and institutions in a wealth advisory and portfolio manager role.

Mark is currently president of the board of trustees of the Kenilworth Union Church and a board member of the Golden Apple Foundation and the Springboard Foundation. Mark also serves as a member of the finance/investment committee for the Golden Apple Foundation.

 

 

 

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