Future of hospital foundation funds to be decided
Two organizations hoping to manage an estimated $20 million in restricted funds resulting from the sale of Haywood Regional Medical Center to Duke LifePoint in 2014 made their case Oct. 17 to the Haywood County Board of Commissioners.
Because Duke LifePoint is not a charitable organization, its purchase of HRMC ended the ability of the Haywood Regional Medical Foundation to fundraise for the hospital.
In the past, such funds had been used to conduct renovations at the hospital as well as minister to the greater health needs of Haywood County by purchasing things like defibrillators for the police department.
But now, commissioners are faced with managing a large amount of money while at the same time hoping that the sale of the hospital will benefit county residents.
Led by Haywood County Manager Ira Dove, county commissioners at the meeting questioned the Asheville-based Community Foundation of Western North Carolina and the Haywood Healthcare Foundation on matters of fund management, grant making, governance and cost.
The Community Foundation of Western North Carolina is an Asheville-based nonprofit that manages more than $250 million in charitable assets across an 18-county area in Western North Carolina. CFO Graham Keever told commissioners that the foundation has “a significant amount of experience” dealing with funds like this one, and Vice President of Programming Philip Belcher stressed investing in line with donor intent — in this case, to improve public health in Haywood County.
The Clyde-based Haywood Healthcare Foundation was founded in 1978 and serves Haywood County exclusively. With 21 trustees from across the county, the foundation focuses on grants, scholarships, educational programs and leadership opportunities designed to improve the health of the county as a whole. Foundation Chair Ginger Lang emphasized the personal relationships the foundation has built over the past 38 years.
Both groups admitted during questioning that the most significant challenge in managing the fund would come from external sources — CFWNC cited projections of a “challenging” economic climate over the next five to seven years, and HHF mentioned the federal deficit and unfunded pension liabilities that tend to stress investment markets.
Those factors may impact the yet-to-be-created fund agreement, which governs the use of the money and could take a variety of paths. Commissioners could decide to construct an endowment in perpetuity, which would cover that cost of giving and maintain or grow the fund each year by fundraising, or structure the operation as a “sunset” fund, designed to spend all of the money over a set period of time until closing down.
Both organizations have a complicated fee structure that is tiered and involves a percentage rate of compensation based on the size of the fund and the amount of active or passive management thereof; for a $15 million fund, CFWNC would probably earn around $100,000 a year initially, whereas HHF would likely come in slightly cheaper.
True numbers won’t be known until a fund agreement is completed, but perhaps the biggest differences in the two groups lies in the their fundraising and oversight activities.
Keever said that the CFWNC doesn’t fundraise, but it does work closely with commissioners to facilitate that process; likewise, the CFWNC also won’t allow commissioners to appoint members to the board overseeing the fund, citing what they called industry best practices.
The HHF actively fundraises, holding successful events like golf tournaments, a 5K, galas and a casino night each year, and has already reserved two seats on the foundation’s board of trustees for commissioners.
Commission Chairman Mark Swanger said they’d take under advisement the groups’ answers and vote on the matter, possibly as early as early November.
The Haywood Community Health Foundation and the Asheville-based Community Foundation of Western North Carolina were the only two groups that responded to the county’s request for proposals.