“This has been a challenging year – you’ll hear that word a lot,” Debbie Beuche told about 300 people who attended Tuesday evening’s annual meeting of the Ann Arbor Area Community Foundation. Beuche, the nonprofit’s board chair, said AAACF gave out $2.2 million in grants and scholarships in 2008 – a year in which their annualized investment return was -31%.
The meeting highlighted AAACF’s accomplishments during 2008, and recognized volunteers who were stepping down from their work with the organization. The event also included a presentation on a project funded by the foundation called The B-Side: The Business Side of Youth, a program to encourage entrepreneurship for youth.
But first, the finances.
Like virtually every organization or individual with investments in the market, AAACF took a beating in 2008. At the end of the year, the nonprofit’s assets totaled $39.7 million – down from $53.2 million at the end of 2007. Despite those results, “they could have been much worse,” David Sarns, the board’s treasurer, announced to the gathering on Tuesday. Their investment strategy aims for broad diversification, he said. According to the AAACF annual report, the group’s target asset allocation is domestic equity (25%), international equity (25%), hedge funds (20%), fixed income (10%), private equity/venture capital (10%) and real assets (10%).
For the first quarter of 2009, returns are down 4.9%, Sarns reported. “We hope for better results in the coming quarters.” He also noted that at the beginning of 2009 AAACF cut its administrative budget – by 12%, according to the annual report – to bring costs more in line with the drop in assets.
The B-Side: The Business Side of Youth
Started in 2007, the B-Side is a program of Eastern Michigan University’s Office of Academic Service-Learning. Jessica “Decky” Alexander, the office’s director, said that B-Side has worked with more than 200 youth, ages 13 to 20, many of whom have started their own businesses: tutoring, designing T-shirts, publishing an e-zine and more. The program “fosters a culture of possibility and tangibility,” she said, “and thus entrepreneurship.”
Malik Redding, a sophomore at Huron High, has been involved in the B-Side for about a year and told the audience on Tuesday that his training has given him the ability to better understand financial statements and speak at public forums like this. His original idea was to open a coffee shop, but instead he decided to start a catering business, called Relax Cafe. He plans to open a food cart in downtown Ann Arbor as well. His longer term goals include going to the University of Michigan Ross School of Business, and expanding his food cart and catering business.
Margaret Rolax, a junior from Pioneer High, started a tutoring business in 2008 through the B-Side, and in March 2009 got a $400 microloan to develop marketing materials. Her business is targeting athletes who need help with their studies, and this coming school year she hopes to expand. She credited the B-Side with helping her develop a business plan.
In addition to the $2.2 million in grants and scholarships awarded in 2008, the AAACF spent the year evaluating how to award a $1 million gift from the Pfizer Foundation, Beuche said at the annual meeting. “We knew that there wasn’t more coming,” she said. “We had to be good stewards.”
Those funds, given by Pfizer early last year as the drug company pulled up stakes from Ann Arbor, were awarded to nonprofits in three areas: Ypsilanti renewal ($101,300 to the Ypsilanti Freighthouse and $300,000 to the Early College Alliance), early childhood development ($196,700 to the Washtenaw Success by 6 program), and arts & culture ($200,000 to the Arts Alliance to help develop a countywide cultural plan). In addition, the AAACF board set aside $200,000 to award in a competitive “Big Ideas” grant process, looking for projects with innovative approaches to community problems. Three project received funding from that earlier this year: 1) Food Gatherers received $92,000 to partner with other agencies to bring healthier food to low-income residents, 2) the Ecology Center got $58,000 for a collaboration to improve energy efficiency in local homes and businesses and to seek renewable energy sources, and 3) Ann Arbor SPARK received $50,000 for economic development through SPARK East in Ypsilanti.
Cheryl Elliott, AAACF president, thanked the more than 325 volunteers involved with the board, the foundation’s affiliate funds, its 32 scholarship programs and its many committees. About 30 of those volunteers were retiring from their work with AAACF, and they were recognized at Tuesday’s event.
The evening also gave a nod to the past and future through a presentation by Molly Dobson, who served as trustee from 1969-1971, and Alex Perlman, a senior at Huron High who’s a youth council representative on the foundation’s board. The two stood together and contrasted the foundation in its early years compared to now. “Color me Generation Methuselah,” quipped Dobson, as she talked about her tenure in the 1960s. In its first year, the foundation made $6,291 in grants and had assets of $59,000. Perlman noted that they’ve come a long way, now giving out more than $2 million in grants. “You’re showing off,” Dobson chided. No, Perlman replied. “We’re just building on the foundation you laid.”