Alex Perlman and Molly Dobson represent the Ann Arbor Area Community Foundation's 45-year span. Dobson was a trustee from 1969-1971. Perlman, a Huron High senior, has been a youth council representative on the AAACF board.

“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.

Financial Report

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, an entrepreneur and sophomore at Huron High, spoke at the Ann Arbor Area Community Foundation annual meeting on Tuesday.

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.

Accomplishments, Farewells

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.”

Cheryl Elliott, president and CEO of the Ann Arbor Area Community Foundation.

The Ann Arbor Area Community Foundation held its annual meeting at the Four Points Sheraton.

At the meeting, Project Grow board president, Devon Akmon, announced that Karen Sikkenga, associate director of Matthaei Botanical Gardens, had approached Project Grow with a proposal that the two organizations form a more robust relationship. The exact nature of such a relationship, said Akmon, was being evaluated by an exploratory committee of six people, which included Held and Jones. The evaluation, stressed Akmon, would involve a close assessment of Project Grow as an organization, which would ultimately make it stronger, whether the outcome resulted in a merger, a partnership, or no new relationship with Matthaei, which is part of the University of Michigan.

Reaction among the roughly 20 assembled members to the word “merger” was uniformly negative, with one member saying, “That would make us a part of U of M. So, no, no, no.” Some kind of partnership, however, was something people in the room seemed more prepared to contemplate. And they were keen to see Held and Jones take a role as board members in that contemplation, not just as members of the exploratory committee. With the agreement of Akmon, as well as verbal support from board members Damaris Suffalko and Terre Fisher, a decision was made to expand the number of board members from eight to 10, which reversed a board decision made prior to the annual meeting to fix the number of board slots at eight.

A more robust arrangement between Project Grow and Matthaei would build on collaboration already in place. That collaboration includes Matthaei as a gardening site for Project Grow gardens as well as a combined plant sale in the spring. Matthaei runs the cash register for the combined sale, but separates out proceeds from plants tagged as Project Grow plants, issuing a check to Project Grow.

Asked what motivated Matthaei to seek a more robust relationship with Project Grow, executive director of Project Grow, Melissa Kesterson, attributed it in part to the existing collaboration between the two organizations, noting that Bob Grese, who is director of Matthaei, was a longtime gardener at the Zion Lutheran Church Project Grow site, before construction plans by the church led to its elimination.

Further, said Kesterson, Matthaei saw their overture as a way to offer Project Grow a financial safety net – the city of Ann Arbor restored $7,000 of funding to Project Grow this spring after previously having eliminated it. The city’s contribution represents about 13% of Project Grow’s overall budget of $55,000. And finally, Kesterson said that public gardens represented a part of Matthaei’s vision for its own community outreach, and that  Matthaei did not want to duplicate what Project Grow was already doing.

Mention of the financial safety net prompted a question from one member about whether the financial clout of Matthaei was something that Project Grow needed in order to survive. Kesterson replied, “We’re very healthy. We’re doing great.” Acknowledging that the organization was currently solid, Akmon stressed that the organization’s budget needed to grow.

Akmon said that a time frame for the assessment of the overture from Matthaei will be a matter of a few months.