NEW HANOVER COUNTY –– The New Hanover Community Endowment Inc. is already investing $1.25 billion it received as part of the February sale of the previously county-owned New Hanover Regional Medical Center to Novant Health.
The day before the one-year sale approval anniversary, endowment president Spence Broadhurst and vice president Hannah Gage shared a range of updates with the New Hanover County Board of Commissioners, which directly appointed five members to the 13-member nonprofit board of directors.
Despite being intertwined with public funds and government appointments, the endowment is not a public entity. County officials took steps to insulate the nonprofit from county government ahead of sale approval to avoid political influence and it being rendered subject to public oversight.
Monday, Broadhurst and Gage gave commissioners a brief but detailed overview of the endowment’s activities in its inaugural year. Below are seven key takeaways:
Grant applications are set to open up next year.
With so much money at play, nonprofits are understandably eager to pitch the endowment on behalf of their cause.
Every year, the board gains access to up to 4% of the endowment’s total market value. This portion will fluctuate (in an upward trajectory, officials hope) annually but will start at about $50 million. Depending on investment strategies, the annual accessible amount could grow. Per the bylaws, the endowment’s value is prohibited from dipping below its initial $1.25 billion infusion.
Grant applications will be welcomed by next fall, according to the endowment’s tentative timeline.
A community advisory group hasn’t been appointed yet, but once it has (planned in March 2022), it will provide the endowment with a set of criteria for grand awardees to meet (May 2022). The endowment will then set the criteria (July 2022), accept applications (September 2022), and make its first grants (November 2022).
A more diverse board has settled in.
Six members were named by the Novant Health successor hospital board –– a board formed post-sale approval by the outgoing NHRMC board of trustees, each of whom were appointed by county commissioners. Two more joined on as “reserved directors,” a condition of N.C. Attorney General Josh Stein’s approval of the sale.
Observing the initial 11-member board was disproportionately male and lacked Hispanic representation, Stein required two more seats on the board with expertise in public health, racial justice, and/or assisting underserved populations. These members are appointed by the 11 members.
“They’re chosen specifically to increase diversity and ensure that underserved communities always have a voice at the table,” Gage said of the seats, filled by Dr. Khadijia Tribie Reid and Dr. Edelmira Segovia. “I think it is safe to say that they have already had a profound impact on the conversation.”
Broadhurst commended the group’s diverse makeup, at 46% female and with one Hispanic member.
“But we’re mostly diverse in our energy. We’re diverse in our ideas, and our perspectives, which has really served us well so far,” he said. “I want to say that every member of our board recognizes the opportunity we’ve been presented and the responsibility that’s in front of us. We consider it an honor.”
The CEO search is on.
A “nationwide exhaustive search” is underway for the endowment’s CEO, Broadhurst told commissioners.
The endowment enlisted the services of BoardWalk Consulting to find its first leader. A job post is still online and a detailed leadership profile solicits experienced candidates ready to engage in the area’s complex and stratified realities.
With just one employee on the foundation so far, the firm described the endowment as “essentially a paper foundation.” The CEO will oversee an undetermined staff size and makeup, the profile states.
A new CEO search and communications committee, chaired by endowment member Stedman Stevens, has already worked through a large group of candidates to narrow the pool. A selection will be made by December, according to the tentative timeline.
This committee also drafted the endowment’s mission, visions, and values statements, in addition to a declaration of commitment. Members spent at least 90 days crafting these guiding principles, Broadhurst said.
Structural tidying up has taken place.
As chair of the governance committee, Gage told commissioners the endowment had strengthened its bylaws and conflict-of-interest policy. (At this point, it is not clear exactly what changes have taken place.)
In June, the Internal Revenue Service approved the endowment for 501(c)(3) status. Before filing its form 990, the endowment established federally required whistleblower and document retention and destruction policies, Gage said.
An investment strategy is shaping up.
Local real estate heavyweight Bill Cameron is chairing the endowment’s investment committee. This committee immediately developed a three-pronged strategy upon receiving the funds:
- Preserved the capital: The endowment invested the proceeds in low-risk, low-cost, and low-return investments.
- Drafted an initial investment policy: The endowment began incrementally investing portions of the proceeds from the low-risk investments into equities, a portion of which into publicly traded index funds, “with the ultimate goal of investing approximately 60% in those type of equities,” Broadhurst explained.
- Engaged an independent advisory investment firm: This firm will help the endowment establish a permanent investment policy to replace the temporary one. It will also help prepare a request for proposals for investment managers to assist the endowment in the future.
A finalized investment policy is anticipated in the next 60 days after which managers will be solicited.
Board members are learning from similar foundations.
This windfall of cash puts the endowment in a life-altering position: Per capita, it could be the largest health legacy foundation in the nation (organizations formed after acquisitions of healthcare systems).
So far, endowment members have engaged in frequent education sessions to learn how to effectively leverage the resources they’ve been tasked to protect, grow, and share.
In its first few months, the board was meeting as often as once a week, given the monumental task ahead, according to the leadership profile document.
Gage told commissioners endowment members have met with similar foundations, including the Duke Endowment, Golden Leaf Foundation, Dogwood Health Trust, Kate B. Reynolds Charitable Trust, Z. Smith Reynolds Foundation, and Blue Cross Blue Shield of North Carolina Foundation.
Of note is the Dogwood Health Trust, formed as a result of the Feb. 2019 sale of Mission Health in Asheville to HCA Healthcare. Roughly 18 months ahead of the New Hanover Community Endowment, Gage said members have relied on their relevant guidance.
“The advice they gave us early on was, ‘Go slow so you can go fast,’” she said. “We’ve heeded that advice.”
A community listening session is planned later this month.
Before the foundation can invite grant applications, it must first hear from the community. Another condition of the attorney general’s approval, the endowment is required to host at least two community “listening sessions” every year.
Stein also required the endowment to create a community advisory committee, “composed of a reasonable cross-section” of the area. This yet-to-be-formed committee will help analyze listening session input and advise grant-making criteria.
The first of two listening sessions is planned later this month. A second, planned on Dec. 1, will take place at 4 p.m. Its location is to be determined.
When: Oct. 26 at 7 p.m.
Where: Wilmington Convention Center
Learn more about the New Hanover Community Endowment on its new website.
Send tips and comments to Johanna F. Still at firstname.lastname@example.org