The Heydon Club, a 100-member social welfare organization dedicated to meeting community needs, donates $40,000 to charity each year, with the bulk of funds being generated annually by a major fundraiser. In 2001, the club created the Heydon Charitable Foundation (HCF), intending that HCF could fill the shortfall should the club find itself unable to generate sufficient funds for its charitable donation in any given year. The HCF Board Members knew that sustainable-retirement withdrawals are often set at 4%, and so they set a goal of $1,000,000 in assets by the end of 2024. Ending assets for 2014 were $280,000 with $40,000 set aside as a rainy-day fund should the club have a bad year. What advice would you give the HCF Board regarding financial planning, goal setting, the charitable structure, and how they should invest the foundation’s assets in order to meet its goals?
This financial planning scenario is an excerpt from the 2015 Gateway to Leadership (GTL) Business Case Study. The 17 students who participated in the GTL summer internship program this year were divided into four teams sponsored by MMI members Albridge Analytics, Charles Schwab, TIAA-CREF, and Wealthcare Capital Management. Each team was tasked with preparing a written proposal and oral presentation for the hypothetical Heydon Club with specific investment advice and recommendations to help meet its financial goals.
In preparing their proposals, the teams held weekly conference calls throughout their two-month internships at their respective host firms. They consulted industry resources and used various financial planning tools, working under the supervision of designated team mentors at their sponsor firms. In addition, Chad Graves and Lily Scott of Morgan Stanley hosted a special webinar on Impact Investing – an important element of the case study – to bring the interns up to speed on that topic.
The teams’ final presentations were reviewed by senior MMI staff and Dennis McLeavey, Professor Emeritus of Finance at the University of Rhode Island, who created the case study. Professor McLeavey praised the quality of the work done by the four teams, saying, “Each of the reports had outstanding features that made the selection extremely difficult.”
- Brinker, ClearBridge, DTCC, Envestnet, Nationwide, NEPC, Northwestern Mutual, Principal, Virtus, Voya, and UNCF (Finance) – for hosting students this summer;
- Wheelhouse Analytics – for providing scholarships for the students to complete the MMI eLearning program;
- Morgan Stanley – for conducting the Impact Investing webinar;
- Albridge Analytics, Charles Schwab, TIAA-CREF, and Wealthcare Capital Management – for sponsoring and mentoring the case study teams; and
- Voya Investment Management – for hosting and photographing the closing conference.
For more information about Gateway to Leadership, or to learn how your firm can get involved, please visit www.GatewayLeaders.org or contact Rob Howe or Sarah Reinhart at (202) 822-4949 or firstname.lastname@example.org.
Image: 2015 GTL Business Case Competition Winners - Team Albridge
(L to R): Simon Reid, Chelsey Henderson, Steve Truong (Team Mentor), Aijah Crockett, Lindsey Crumlin