Providence's Nonprofits Face Diminished Dexter Donation Fund in 2016

GoLocalProv News Team and Kate Nagle

Providence's Nonprofits Face Diminished Dexter Donation Fund in 2016

Providence nonprofits are due to face a substantially smaller pool of money available through the city's Dexter Donation fund in 2016 due to poor fund performance -- and while Providence Mayor Jorge Elorza officially chairs the commission, Deputy Chief of Staff (and Miss Rhode Island USA) Teresa Agonia has overseen the management of the multi-million dollar trust since being appointed by Elorza as his designee in 2015. 

The Dexter Donation trust was established in 1824 under the will of Ebenezer Knight Dexter "to ameliorate the condition of the poor, and to contribute to their comfort and relief" -- and gave out over $230,000 to city nonprofits each of the last two years.

However, due to the fund's sub-par performance this past year, City Treasurer Jim Lombardi is saying he won't let the fund's principal balance be raided -- and does not predict the level of giving to exceed $100,000.

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"The income from the trust is distributed to eligible non-profit organizations by a Board of Commissioners elected by residents of the City of Providence in accordance with the will of Ebenezer Knight Dexter," writes the City on its website. "In 2012 92 local non-profit organizations were awarded grants from the Dexter Donation."

Meeting Minutes, Emails Disclose Financial Issues

Minutes from the recent March 4 "Commission of Dexter Donation" meeting show the members discussed the market conditions (that resulted in year-to-date returns for the fund being down over 5%) and acknowledged that in order to serve the community, they would have to from appearances "dip into the fund," this year.

Read minutes HERE

Theresa Agonia chairs the Commission of Dexter Donations.
"But I think if it’s the industry standard or the best practices to do 3 to 5%, I think we should stay within that for this year, about $100,000.00, which means that, unfortunately, a lot of the places we usually fund will either get less or not get funded at all, but I think it’s still important to, with the intent of what the Dexter Commission is really tasked with doing is supporting people, I think it’s worth at least opening the application process even if it is a lot less money than what we are used to," said Agonia. "It’s better than nothing and I think that will just have to be the message for this year. So, then with that opinion, would I need a motion to, I think two months is what we did last year, I think that makes sense. Two months from today would be May 6th for the application deadline, so would I need a motion to accept May 6th as the deadline?"

Agonia sent an email on March 14 to an undisclosed list warning them of the realities during this year. 

"i wanted to let you know that this year the Commission will be able to give out less grants than in years [past]. Unfortunately the market did not produce as much funds as in years past, which will significantly reduce our ability to award grants. In the spirit of Ebenezer Knight Dexter’s mission, we wanted to make it a priority to do what we could this year despite the less funding," said Agonia in the email.

Lombardi said that he would be advocating for a "prudent' disbursement this year. 

"Unfortunately the trust was flat," said Lombardi of the most recent performance. "The term 'income' I see to be not necessarily the direct income, but the income over the last few years.  If the rate of return was 8 percent before, we probably still [disbursed] 5 [percent] at that time.  So we're looking to distribute income based on 'prudent person' rule -- again, this year we had no income."

"Wainwright is our investor. As the trustee, we don't want to dip into the corpus to go against the intent of the trust -- and we want to make sure its preserved for the future," said Lombardi. "It's my opinion that we should be able to distribute on something [this year] based on earnings made in the past that weren't distributed."

See How Much Providence Pays in Pension Fund Fees

Manager: Halpern Denny III

Manager Effective Fee: 0.0%

Asset Class: Private Equity

Assignment: Private Equity

Market Value: $188,318

% of Total Fund: 0.1%

 

Note: Fund is in liquidation.

Manager: William Blair VII

Manager Effective Fee: 0.0%

Asset Class: Private Equity

Assignment: Private Equity

Market Value: $434,649

% of Total Fund: 0.2%

 

Note: No further management fee is charged in 2013 other than a $2000 charge anticipated from January 2013 to mid March 2013. Fund is in liquidation.

Manager: SSgA Russell 2000 Growth

Manager Effective Fee: 0.08%

Asset Class: Equity Managers

Assignment: Small Growth (Index)

Market Value: $10,415,062

% of Total Fund: 3.9%

 

Note: Subject to $10,000 min annual fee.

Manager: SSgA Russell 1000 Growth

Manager Effective Fee: 0.08%

Asset Class: Equity Managers

Assignment: Large Growth (Index)

Market Value: $6,811,160

% of Total Fund: 2.6%

Note: Subject to $10,000 min annual fee

Manager: Vanguard MG ETF

Manager Effective Fee: 0.10%

Asset Class: Equity Managers

Assignment: Mid Growth

Market Value: $7,635,410

% of Total Fund: 2.9%

Manager: Invesco Venture Fund III

Manager Effective Fee: 0.25%

Asset Class: Private Equity

Assignment: Venture Fund of Funds

Market Value: $1,627,627

% of Total Fund: 0.6%

Note: Fee reduced to 0.25% in Q4-2013.

Manager: Columbia (Fleet)

Manager Effective Fee: 0.30%

Asset Class: Cash

Assignment: Large Value

Market Value: $397,606

% of Total Fund: 0.1%

Note: Subject to $15,000 min annual fee.

Manager: Columbia (ValuePath)

Manager Effective Fee: 0.37%

Asset Class: Equity Managers

Assignment: Large Value

Market Value: $20,453,356

% of Total Fund: 7.7%

Note: Columbia (Value Path): 0.40% on first $10m/0.35% on next $15m/0.30% on next $75m/0.25% on remainder.

Manager: Mellon (Prov Group)

Manager Effective Fee: 0.50%

Asset Class: Equity Managers

Assignment: Large Growth

Market Value: $6,641,213

% of Total Fund: 2.5%

Manager: Renaissance Installation Equity Fund

Manager Effective Fee: 0.50%

Asset Class: Hedge Funds

Assignment: Long/Short Equity

Market Value: $34,779,679

% of Total Fund: 13.0%

Note: Additional performance fee of 10%.

Manager: Q-BLK (Quellos) Strategic

Manager Effective Fee: 0.50% Min

Asset Class: Hedge Funds

Assignment: Fund of Funds

Market Value: $11,120,033

% of Total Fund: 4.2%

Note: The quarterly advisory fee paid to the Investment Manager is 0.1250% (0.50% per annum) of the Fund’s net assets on a quarterly basis when the Fund’s quarterly return is equal to or less than the return on the 90-day US Treasury bills plus 1.25%. The advisory fee will ratably increase, depending on the Fund’s performance, up to a maximum of 0.6250% per quarter (2.50% per annum).

 

Manager: Rogge Global Partners

Manager Effective Fee: 0.65%

Asset Class: Fixed Income

Assignment: Foreign Bonds

Market Value: $14,033,078

% of Total Fund: 5.3%

 

Manager: Boston Partners MV

Manager Effective Fee: 0.70%

Asset Class: Equity Managers

Assignment: Mid Value

Market Value: $24,556,046

% of Total Fund: 9.2%

Note: Boston Partners-MV: 0.70% on first $25m/0.60% on remainder.

Manager: Brandes

Manager Effective Fee: 0.74%

Asset Class: Equity Managers

Assignment: Foreign Equity

Market Value: $39,824,387

% of Total Fund: 14.9%

Note: Brandes Partners: 0.95% on first $10m/0.80% on next $10m/0.60% on next $30m/0.50% on remainder.

Manager: Boston Partners SV

Manager Effective Fee: 0.99%

Asset Class: Equity Managers

Assignment: Small Value

Market Value: $25,886,408

% of Total Fund: 9.7%

Note: Boston Partners-SV: 1% on first $25m/0.80% on remainder.

Manager: Point Judith II

Manager Effective Fee: 1.50%

Asset Class: Private Equity

Assignment: Private Equity

Market Value: $1,174,791

% of Total Fund: 0.4%

Note: Management fee is charged on committed capital and is equal to 2.5% during the first six years of the fund; 1.5% for the next two years and 1.0% thereafter. Point Judith also charges a performance fee of 20%.

Manager: Graham Global II*

Manager Effective Fee: 3.0%

Asset Class: Hedge Funds

Assignment: Global Macro

Market Value: $5,426,857

% of Total Fund: 2.0%

Note: Additional performance fee of 25%

 

 

 

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