St. Ann Center for Intergenerational Care in Milwaukee is a nurturing environment for people of all ages—children, adults with severe disabilities, and frail adults. As the nuns who run the center like to say, "The wisdom of the old nurtures the dreams of the young." A few years ago, the sisters embarked on an endowment campaign because of the unreliability of federal funding. Sister Edna Lonergan, president of St. Ann Center, talks to Terry Axelrod, Benevon founder and CEO, about how they have begun bridging the gap.

Terry: Please tell us the name of your organization, your role there, the organization's background, and how you realized that you need an endowment.

Sister Edna: My name is Sister Edna Lonergan and I'm president of St. Ann Center for Intergenerational Care. St. Ann Center is comprised of two facilities. One is for people of all ages and abilities from about six weeks of age up to over 100 years. The other is a facility for people with Alzheimer's disease and profound developmental disabilities. We started back in 1983 as a response to the community of older people who wanted to stay in their own homes and their own familiar neighborhoods instead of being institutionalized. Over the years, we've built on that concept, trying to diversify services comprehensive enough to allow people to stay in their own homes for an indefinite period and not be prematurely institutionalized. It is the mission of the Sisters of St. Francis of Assisi to serve the underserved, but there has been very little state and federal financial support, until most recently, for community-based care, thus the need for an endowment.

Terry: Does your order provide mostly adult day service in other areas of the country also, or is that not the only thing that your order does?

Sister Edna: We've been a teaching order also, particularly for children with special needs. In the past, we also took take care of orphans and troubled children. Adult day services is not the main focus of the order, but it's growing.

Terry: Say a little bit about how you raise your other money and how you're funded in general.

Sister Edna: We have what's called an Adopt-a-Life program people can donate into, but that really doesn't take care of the deficit. Since we subsidize about 80% of our clients, we need about $400,000 a year in addition to the operational income dollars. We raise the money and pay our bills through a condo raffle, a cash raffle, and a house raffle, which nets approximately $600,000 a year.

Terry: Do you receive any money from government funding or any other grants?

Sister Edna: Yes, we receive family care funding for those over sixty who qualify, and then we have Community Options Program (COP) and COP Waiver funding that provides day services for those between the ages of eighteen and sixty.

Terry: OK, so the raffle pays off the operational deficit, and you're left with a surplus of $200,000 that you can begin to invest towards an endowment. How did you identify that you wanted to grow an endowment, who was involved, and then how did you go about it?

Sister Edna: We started an endowment because federal funding is like a yo-yo; sometimes it's there and sometimes it isn't, and it's not reliable. We don't want to have to say no to anyone who comes through our door, so we really need to build about a $10 million endowment so that even if all else fails we never have to turn anyone away.

Terry: How did you pick $10 million?

Sister Edna: That would give us enough interest, without touching the principal, to take care of any deficits we might have. So far we have raised $1 million.

Terry: How has that money come to you?

Sister Edna: Some people donate just to the endowment, so of course we put it in that area. We also have a capital campaign going on right now. Also, we don't touch the interest from the endowment so it continues to grow.

Terry: In addition to your larger campaign that now includes $1 million for endowment, you also put money in from your annual surplus. How is that money invested? Do you have your own investments or do you put your funds into a community foundation?

Sister Edna: We presently have prospects of eliminating the operational deficit. Any surplus money that heretofore satisfied the operational deficit can be added to the endowments. As far as investments, we have about $103,000 in what's called a "OSF" (Order of St. Francis) equity fund and then we have about $400,000 in an "OSF" fixed income account, which is eleven corporations within the Sisters of St. Francis. Several of them are part of this consolidated investment. The investment doesn't give us a higher yield, but it does provide us with a lower management fee. I also like going into this consolidated investment because we only select those investments that are socially responsible. We also have a Schwab investment account and that's about $375,000 or so, and then we have a Catholic equity fund that's about $107,000.

Terry: You've diversified and really looked at being socially responsible where you've invested. What kinds of yield? Are you free to say? We tell people to expect 5%, and some people say that's way too high and others say that's way too low.

Sister Edna: Well, I think 5% is conservative. We've been averaging about 6% the last three-and-a-half years.

Terry: How do you encourage donors to give to endowment?

Sister Edna: They see our history for one thing. They know we have a twenty-one-year history of this, and they see that we haven't touched the principal over the many years.

Terry: So you show them your track record.

Sister Edna: Yes, they see that it's growing and that we're responsible in all our investments. In this day and age, that's pretty good considering the serious declines in the stock market, and so I think for us to hang in there and do as well as we have is remarkable.

Terry: Another concern people often have is that if a donor wants to give to endowment, they won't want to give to the annual giving program. Have you found that to be the case?

Sister Edna: It's true that most donors would prefer giving to the annual appeal rather than to endowment. They like to see their money in action, changing someone's life right now. That's why it's better for us to take any surplus we have from our annual appeal that is not restricted and place it into the endowment.

Terry: Do you have a planned giving program also—bequests and wills and such?

Sister Edna: We have seminars and try and interest people, but we have only received small amounts so far. We just received $25,000 from one donor's will, and I know that we're in several wills for major amounts.

Terry: Will you use that money for endowment if you get big bequests?

Sister Edna: They may stipulate how they want it used, but if they don't, we'll invest it wisely. We try and get as much into the endowment as we can because that really ensures our future.

Terry: One of the things I see you've done so well is that you have involved the community so much in your program that you've built the endowment as naturally as you've grown the rest of your giving programs.

Sister Edna: Yes, and that's why I love your [Benevon] Model—because you have to ask people. If you don't ask, you're not going to get it. You just have to believe in your mission.

Terry: It really does come through. At our 201 Workshop, we have people make a ten-year plan—they have to figure out how they will grow an endowment that's big enough to cover their operating shortfall just in interest—and it's quite an eye-opener when they realize that they can do it by the seventh or eighth year while still growing their individual giving program large enough that they can actually start asking some of their major donors to move towards endowment. It's so attainable, and most people think that they can't do it. They just stay on the treadmill of year-to-year funding.

Sister Edna: That's just it. A big part of raising an endowment is believing that you can. Adult daycares really have to. If they are to survive, they just can't be this little social card-playing club. It's a very important part of our long-term care for our older people. I'm going to be presenting at the Wisconsin Adult Aid Services Association conference, and I'm going to talk about [Benevon] and say that they have to think in terms of participating, strategizing, and focusing on raising money, and you can provide them with the tools to do that.

Terry: Any last thoughts about endowment? Anything I haven't covered?

Sister Edna: If we're going to sit back and do the safe thing, nothing is going to happen. I love the quote, "The ship that's docked is safe, but that's not what a ship is meant to do." We're daycares right now, safely docked, but that's not what we're meant to do. We're really meant to grow and be a vital part of long-term care.

Terry: Thank you so much for your time. I really appreciate you and wish you best of luck.

For more information on St. Ann Center, check out their Web site at http://www.stanncenter.org.