Written by Don Ratzlaff Tuesday, 03 January 2012 15:08
When Sterling College benefited in September from a $1.3 million endowment from an alumni couple in Tucson, Ariz., the couple’s gift came from MB Foundation, based in Hillsboro.
It turns out the Presbyterian-supported college had recommended the Mennonite Brethren financial institution to be the beneficiary of the couple’s entire estate. MBF then set up the Sterling endowment according to the couple’s wishes.
Being the facilitator for non-Mennonite Brethren charities is becoming an increasingly familiar scenario for MBF.
“I don’t think that will become normal for (Sterling), but when those cases arise we are their recommendation,” said Jon Wiebe, president and chief executive officer.
“I really haven’t pressed the question of why us, but I have heard them say that we have the ability, and also that we are like-minded.”
MBF is providing its services and expertise to a growing number of individuals and partner charities beyond its denominational roots.
In fact, MBF has become one of the largest and most-respected community foundations in the state with $120 million in assets in 2011—far surpassing higher-profile regional agencies such as the Wichita Community Foundation ($45 million) and the Central Kansas Community Foundation ($5 million) based in Newton.
In addition to its current assets, MBF has another $120 million in “gift expectancies” in the pipeline.
“These are gifts we are aware of that will come through MBF someday for the benefit of other charities,” Wiebe said.
A number of those charities, such as Tabor College, are Mennonite Brethren-related. But last year, 40 percent of MBF’s gift distributions went to non-MB charities like Sterling College.
“We’re willing to work with folks of any background,” Wiebe said. “At our last board meeting we approved $3.6 million worth of distributions to 30 charities—which was big for us. Two-thirds of them are non-Mennonite Brethren.
“We’re not avoiding our (MB) core,” he added, “but we feel we have the breadth and strength to do both.”
MB Foundation’s story goes back to 1898, when an endowment fund was established under the management of the denomination’s board of trustees.
But MBF’s more formal beginning was in 1972, when the denomination established a stewardship department to offer services in estate-planning education, life-income agreements, charitable trusts and a variety of gift plans.
The success of that department led to its incorporation in 1990 as Mennonite Brethren Foundation with assets of just under than $20 million. By the time Wiebe came on board six years later, the assets had grown to $30 million. Over Wiebe’s 15 years, those assets have quadrupled.
Even so, Wiebe characterizes MBF’s growth since his arrival as slow and steady.
“Our average growth has been less than 10 percent a year, but we have grown every year that I’ve been here,” he said. “People continue to see the value of what we’re offering.
Keys to growth
One of the keys to MBF’s growth has been better marketing, according to Wiebe.
“The services really haven’t changed, we just keep expanding on them a little bit as time goes on,” he said. “I think mostly the word is getting out better. We’re packaging it better just in the way we design materials.”
Another key factor has been MBF’s shift from marketing to large gatherings of potential clients, such as church conventions, to fostering partnerships with individual charities that could use MBF’s expertise and resources as a tool to achieve their financial goals.
“We’ve really been focusing on trying to partner more with charities because, frankly, the charities we serve are the institutions that donors love and want to support,” Wiebe said.“We’re just a means to an end—we’re not the end.
“We’re better off if we can support a ministry or charity, identify their donors and then work with them to facilitate something.”
A third growth factor, Wiebe said, has been MBF’s increasing emphasis on customer service.
“We think we’re big enough to provide the technical expertise and the tools that people need—access to professional money management and those kinds of things—but small enough to really serve our customers well, to know what their needs are and to be able to answer their questions.”
Broadening the base
MBF clients do not have to be professing Christians or designate their charitable gifts exclusively for Christian causes.
“Giving to the arts, giving to a public university, giving to a community event or purpose—it doesn’t have to be Christian or faith-based per se,” Wiebe said. “It just shouldn’t be in opposition to it.
“If the charity a donor wants to support is in real opposition to what we fundamentally stand for, then we’re not going to be a part of it,” he added. “That’s only come up once in my 15 years.”
Meanwhile, MBF has adopted what Wiebe called “a very strict approach” to the way it invests the assets it has been entrusted to manage.
“We’ve defined what we call ‘morally responsible investment criteria,’” he said. “We’ve chosen to use the word ‘morally’ instead of ‘socially’ because in this day and age they imply different things, although there’s obviously overlap.”
For MBF, that means avoiding companies involved in gaming, alcohol, tobacco, defense, pornography or pharmaceuticals that support abortion.
But Wiebe admitted investment purity is nearly impossible in what he called “a tangled economic and investment world.”
“People, by in large, understand you can’t stay away from this stuff when you invest in mutual funds,” he said. “Unless you carefully read a huge prospectus, you don’t know what their exact holdings are.
“We’ve kind of taken the stand of ‘best efforts’ and avoid certain things as best we can,” he added.
“We feel that’s something we offer that’s a little unique to our constituency, but it’s appropriate given our faith standards and who we are. And we do it in support of the ministries we’re working for.”
Looking to the future
As Wiebe looks to MBF’s future, he anticipates continuing asset growth but knows a lot of variables are at play.
“We have set growth goals, but I’ve hesitated to continue to do so because I think it can push us into making some bad decisions,” he said. “Growth for growth’s sake isn’t necessarily healthy. There are some means we could use to grow assets, but it just wouldn’t make sense right now.”
The national economy is one variable, as the recent economic downturn has demonstrated.
“You could set a great (growth) goal, but if the market goes down 25 percent you’re kind of sunk,” he said.
“The other thing that can happen in our business is that people die—then we distribute a lot of money,” he said. “You can’t always make an equation and say we’re going to grow by X amount. There are too many variables.”
Wiebe does expect growth in other areas of their operation.
“There’s always a focus on growing in our strength of customer services as well as additional tools and techniques, using technology to better serve our customers and finding new avenues for growth. But whether that will result in asset growth, I don’t know.
“I certainly want to grow in the number of customers we’re serving, but we haven’t really set big numbers.”