1. Purpose of This Document This set of slides is intended to provide community foundations with a template for presenting the findings of their activity-based costing analysis Foundations can use any or all of these slides as appropriate To use these slides, foundations must: Enter the results of their activity-based costing analysis in relevant slides Update the peer foundation data on appropriate slides based on current benchmarking data available on the CF Insights database (www.cfinsights.org) (NOTE: this data is available to members of CF Insights only)www.cfinsights.org Need help analyzing the data or putting together presentation materials? Contact info@cfinsights.org for information on pricing.info@cfinsights.org Helpful Tips when deciding what to include/exclude : Who is your audience? A Finance Committee may want the nitty gritty details on all products while the Board may be more interested in very high level findings and a few key recommendations. Where can you drill down? Determine key decisions your foundation is considering. For instance, are you looking to evaluate the viability of certain products? Do you want to consider investing further in certain areas? Was there anything that surprised you? For instance, did you expect DAFs would be generating a big surplus, but the foundation is subsidizing them? How do the data explain the results (perhaps the effective fee and/or average fund size are low)? Where would peer comparison data be helpful? The CF Insights database can help put some of your data into context (note that not all data sampled here is available for all community foundations). Contact info@cfinsights.org for assistance.info@cfinsights.org

2. cfinsights.org Activity-Based Costing Analysis Presentation of Results YOUR COMMUNITY FOUNDATION NAME DATE SHARING KNOWLEDGE. GROWING IMPACT.

3. © CF Insights 20123 AGENDA I.Methodology II.Sample Slides for Overview and High-Level Findings III.Sample Slides for Peer Data IV.Sample Slides for Discussion

4. Methodology © CF Insights 20124 Community Foundations Can Build Transparency Into the Costs and Revenues Associated with their Products by Asking New Questions How much cost is associated with each Foundation product? Which products make money and which do we subsidize? Are our subsidies consistent with our mission and strategic priorities? What determines cost for each of our products? Activity-Based Costing can help you determine answers to these questions

5. Methodology © CF Insights 20125 The Cost-Revenue Study Uses Activity-Based Costing to Assess the True Cost of a Foundation’s Products and Services Activity-Based Costing (ABC) allows organizations to determine the actual cost associated with each product or service Cost data is gathered and traced to specific activities, then costs are allocated to products or services based on their utilization of activities Staff costs are assigned to activities and products based on reported time, weighted by individual salaries, including taxes and benefits Expense 1 Expense 3Expense 4 Expense 2 Activity 1Activity 2Activity 3 Product 1Product 2 Costs are assigned to activities… …then allocated based on utilization of activities

6. Methodology Cost Matrix DAFDiscretionaryScholarshipsAgency Fee for Service Planned Giving Supporting Orgs. Initiatives Community Leadership and Services … Acquiring or Establishing a New Fund or Gift $Y Maintaining Funds $Y Making Grants $Y Providing Non-Grant Services to the Community $Y Other Staff Activities $Y 100% of the Foundation’s Staff Time, Cost and Other Expenses Were Assigned to a Matrix of Products and Activities The model uses a set of standardized rules for allocating activity time to products where staff were unable to do so 16 Products >100 Activities 6 © CF Insights 2012

7. Methodology - Products Used in the Analysis Product Description Unrestricted Funds that meet community needs as they arise through the Foundation’s Grants Program and are typically held in perpetuity, producing an annual income Field of InterestFunds allowing donors to support a broad area of concern Designated Funds created to ensure ongoing assistance to specific non-profit and charitable organizations, monitored to ensure that they fulfill purposes that donors intended to support Geographic AffiliatesSpecific fund names Agency Funds Endowment funds established by individual non-profit organizations to be held and managed by the CF. The CF makes regular reports and distributions to the organization. ScholarshipFunds providing an annual income to be distributed in the form of scholarships Donor Advised Funds / Endowed Funds held by the CF where the donor has specified that the fund’s income or assets be used for the benefit of one or more specific public charities or areas of interest, subject to spending policy Donor Advised Funds/ Non-Endowed Funds held by the CF where the donor has specified that the fund’s income or assets be used for the benefit of one or more specific public charities or areas of interest Fee for ServiceFunds which require a significantly customized set of services, including committee work, event planning Supporting Orgs.Specific fund names Fiscal SponsorshipsSpecific fund names Other Special Initiatives Specific Initiative names Community Leadership Activities specific to each foundation, typically resulting from its mission driven priorities. Examples include: activities that support the growth of philanthropy in the community, providing technical assistance to non-profits, convening funders through grant writing workshops and local presentations. Planned GivingCharitable trusts including Charitable Remainder Trusts and Charitable Lead Trusts Fundraising for Operations Fundraising activities to support the foundation's operations. © CF Insights 20127 Sample product list and definitions - Update to include your products and product definitions

8. © CF Insights 20128 AGENDA I.Methodology II.Sample Slides for High-Level Findings III.Sample Slides for Peer Data IV.Sample Slides for Discussion

9. High Level Findings © CF Insights 2012 9 % of Total Assets, Revenues and Costs by Product $800M $10M Total DAFs represent 21% of costs Total DAFs represent 26% of revenues Total DAFs represent 43% of assets Update with your products and data

10. High Level Findings © CF Insights 201210 2011 Costs & Revenues ($M) Operating Budget Only Costs and Revenues by Product Category Update with your products and data

11. © CF Insights 201211 High Level Findings Cross-subsidizing is not unusual in a community foundation business model and it is important to be intentional about where investments are made Surplus, Subsidy and Investment for Each Product Surplus Subsidy Investment 2011 Surplus/Subsidy/Investment by Product ($k) Operating Budget Only

12. –Number of products, and asset concentration in each product –Degree of customization allowed or encouraged by the Foundation –Endowment or grantmaking emphasis of each fund - or rate of pass through –Average fund size in each product category –Pricing discounts from published pricing and matching pricing to underlying cost drivers –Revenue diversification beyond asset-based fees © CF Insights 201212 A NUMBER OF INTERRELATED FACTORS INFLUENCE THE SUSTAINABILITY OF THE PRODUCTS PROVIDED BY COMMUNITY FOUNDATIONS High Level Findings

13. Surplus Products Product 1Product 2Product 3Product 4Product 5 Total Surplus Generated Total Assets % of Assets % Total Revenues % Total Costs Average Fund Size Breakeven Fund Size Breakeven Fee (Costs as % Assets) Effective Fee (Revenue as % Assets) © CF Insights 2012 Details for Products that Generate a Surplus 13 Update with data from your products that generate a surplus

14. Product Investments Product 1Product 2Product 3Product 4Product 5Product 6Product 7Product 8 Total Surplus/ Investment Total Assets % of Assets % Total Revenues % Total Costs Average Fund Size Breakeven Fund Size Breakeven Fee (Costs as % Assets) Effective Fee (Revenue as % Assets) © CF Insights 2012 Details for Products That Require a Subsidy/Investment 14 High Level Findings Update with data from your products that require a subsidy/investment

15. © CF Insights 201215 AGENDA I.Methodology II.Sample Slides for High-Level Findings III.Sample Slides for Peer Data IV.Sample Slides for Discussion

16. Sample Peer Comparison Data © CF Insights 201216 Peer Data Can Help Put Your Foundation’s Findings Into Context Members of CF Insights can access a variety of financial and operating metrics for hundreds of peer community foundations at www.cfinsights.org, including details on:www.cfinsights.org Assets, Gifts, and Grants Product Mix Staffing Operating Expenses Geographic Indicators Additionally, numerous community foundations have completed the Activity-Based Costing analysis. Surplus/Subsidy and cost data by product for these foundations can also be accessed at www.cfinsights.org www.cfinsights.org Need assistance accessing the data or looking for more detailed Activity-Based Costing data from peers? Contact info@cfinsights.orginfo@cfinsights.org We’ve included some sample slides in this section that may help you assess your performance in comparison to peers. This is not an exhaustive representation of all the data available to members! Interested in learning about the benefits of becoming a CF Insights member? Contact info@cfinsights.org or visit www.cfinsights.org info@cfinsights.orgwww.cfinsights.org

17. Sample Peer Comparison Data © CF Insights 201217 Assets by Product Among Peers Peer 1 Sample CF Peer 2Peer 3 CF Insights members can access this data in the CF Insights Database Peer 4

18. Sample Peer Comparison Data © CF Insights 201218 Percent of Total Cost by Product Among Peers Peer 1Sample CFPeer 2Peer 3Peer 4 CF Insights members can access this data in the CF Insights Database

19. Sample Peer Comparison Data © CF Insights 201219 Percent of Total Costs by Activity - DAFs Peer 1 Sample CF Peer 2Peer 3Peer 4 CF Insights members can access this data in the CF Insights Database Peer 1

20. Sample Peer Comparison Data © CF Insights 201220 Total Surplus/Subsidy - DAFs Peer 1 Sample CF Peer 2Peer 3Peer 4 CF Insights members can access this data in the CF Insights Database

21. Sample Peer Comparison Data © CF Insights 201221 Operating Budget Total Asset Size ($M) $140$52$91$97$103 CF Insights members can access this data in the CF Insights Database

22. 22 Costs as % of Assets Traditional Percent of Assets Fee at 1.0% Sample Peer Comparison Data © CF Insights 2011 Costs as % of Assets (Breakeven Fee for Products) Would this data be helpful to you? Contact info@cfinsights.org for access info@cfinsights.org

23. © CF Insights 201223 Revenue as % of Assets Fee Revenue as % of Assets (Effective Fee) Traditional Percent of Assets Fee at 1.0% Sample Peer Comparison Data Would this data be helpful to you? Contact info@cfinsights.org for access info@cfinsights.org

24. © CF Insights 201224 Revenue Mix Sample Peer Comparison Data Would this data be helpful to you? Contact info@cfinsights.org for access info@cfinsights.org

25. © CF Insights 201225 Leadership Funding Would this data be helpful to you? Contact info@cfinsights.org for access info@cfinsights.org Community Leadership and Initiatives Revenue Sources Percent of Total Revenue for Leadership

26. © CF Insights 201226 AGENDA I.Methodology II.Sample Slides for High-Level Findings III.Sample Slides for Peer Data IV.Sample Slides for Discussion

27. Discussion Tool © CF Insights 201227 Informed by a New Set of Facts, the Foundation Can Engage in Productive Board/Staff Dialogue and Make Intentional Strategic Choices Are our operations aligned with our mission and strategy? To improve sustainability, achieve impact, and promote philanthropy going forward, what changes should we make in our: Product portfolio? Processes? Policies? Pricing? Revenue sources? How do we prioritize investment of resources? –Which fee based products will we subsidize, if any? –How should we trade off subsidizing certain fee-based products versus community leadership activities? How do we develop and evaluate new product/service introductions? Questions

28. Discussion Tool This business model analysis provides key information on products’ sustainability, community investment and opportunities for change Before determining any changes to these products’ fees, costs or policies, however, the Foundation must step back and review how each product plays a role in achieving its strategic priorities 28 What are our strategic priorities? What mix of products aligns with our strategic priorities? –Within fee based products –Fee based vs. community leadership products? How do we position priority products for growth? What operational changes do we make by product: –Price –Policy –Processes –Revenue sources? Before Determining Changes To Make Based on This Data, the Foundation Should Step Back and Consider Its Strategy © CF Insights 2012

29. Discussion Tool Product Emphasis Revenue Adjustments Opportunities to Reduce/ Redirect Costs Fee Based Products Unrestricted Field of Interest Designated Geographic Affiliates Agency Funds Scholarship Donor Advised Funds / Endowed Donor Advised Funds/ Non-Endowed Fee for Service Planned Giving Fundraising Funds Supporting Orgs. Leadership Initiatives Community Leadership Strategy Should Guide Prioritization and Adjustment of Products © CF Insights 201229 Update with your Products