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News You Can Use

News You Can Use
Issue 109/January 2012

The Powerball Winner: Sharing in Good Fortune

Jennifer FurlaBy Jennifer Furla
Executive Vice President   

Recently, a convenience store customer in Minnesota won the Powerball – at $229 million. While the lucky winner had not yet revealed himself, accompanying the story was the ubiquitous security cam picture of the transaction that suggests it was a 30-something male.  The winner has one year to present him/herself and can take the winnings in installments over a 30-year period, or take a lump sum of $123 million.

As fundraisers, we often dream of finding that lottery winner among our donor prospect pool.  With strong values of giving, I suspect that many of us dream of what we would do if we were to purchase that winning ticket?  In our house, we’ve talked about it as a family.  Give to our favorite causes.  In my case, possibly help complete a campaign goal for a lucky client?

For this week’s winner, $123 million after taxes – even invested in simple CDs at 1.55% – will generate some $600,000-plus per year. 

I met a lottery winner not long ago. Sitting on the wharf outside our hotel for the Giving Institute and International AFP Conference in Baltimore, I struck up a conversation with a gentleman who sidled up to me with his family, all dressed in matching athletic suits. Turns out they were in town for the man to receive medical treatment for a highly complex medical condition at Johns Hopkins University. 

He talked about winning $150 million in the Canadian Lottery.  He was from Ottawa, on the western side of the country and was among the First Nations peoples of Canada – the native, aboriginal peoples, akin to the American Indian.

He talked about how it changed his life and his family’s. In Canada, he said, all winnings are immediately paid out, lump sum and tax free to the winner. He purchased a new home for his family. He paid to fix up the homes of near relatives. Of course, took a couple of once-in-a-lifetime, memory-making trips (to Disneyworld in Orlando, if I recall correctly). His good fortune was paying for the trip and treatment at Johns Hopkins. 

Then there was charity.  He built schools for the children of his Indian Nation and endowed those schools so they could maintain the new buildings and populate them with programs and staff.  He established a Trust that will provide scholarships for the youth of the Nation.  He made a large gift to the Tribal Council to help families in need.

At the hotel, he became interested in another conference that was taking place there – for families of children of autism. “How could he help, he asked?”  He understood what was “enough” for his family and him and wanted to share his good fortune.

I do not know if the connections he made that day resulted in support for the autism group, but can only imagine the number of causes this man and his family have since sought to  help – and will  in the future.  For us in the profession, this lottery winner serves as an example of unselfish philanthropy – love of brother.

As my son would say, “Now, those are real heroes.  People like that.”

The Time is Ripe:
Clean Off The Shelf And Start Planning For Your Senior Living Community

Jean Bacon

By Jean G. Bacon
3B Fund Development Group

Following more than two years of fear, paralysis and “tread water” management, senior living communities may once again be in the position to dip their toes into the development waters.  It may need to be done gingerly, and most certainly will require courage on the part of administrators and boards willing to take risks, but the signs are there and developments are moving again.

The earliest signs of the bond market freeze began to appear in late spring of 2008.  In the intervening three years, many a plan was put on the shelf, gathering dust as leaders struggled to cope with economic realities that were part of the overall recession.

Interest rates were all over the map and very little new construction began.  Sure, there was money out there to be had, but only for those who didn’t need it.  Those who did need financing, found the financial gurus — the bond underwriters and the financial feasibility consultants  – were retrenching and unwilling to invest in expansions.  There was some refinancing of older communities, but this was mostly donein an effort to cut monthly bond payments.

Communities that were fortunate to have a large percentage of “healthy” residents in independent living saw that their census remained relatively stable.  However, new sales were a challenge given the housing crisis and how difficult it was for older people to sell their homes.  Older adults who had always imagined that they would choose to move to a senior living community reversed course.  They sought help in their homes for their health and support needs and settled into a “wait-and-see” mode, continuing to live in the family home with the hope that the economy would turn around.  This same population, unfamiliar with the real costs of in-home healthcare, worried with stock market declines that if they were able to move they lacked the resources to live out their lives in the type of community they’d always wanted. 

In an industry which requires continuous upkeep and updating, it was hard to identify cash for projects that did not immediately show revenue returns.  Given the overall climate and all these conditions, there was no desire to take risks.  This created an interesting dynamic in an industry that had always taken risks to improve products and services for their residents.

And, now, the pendulum is swinging.  The housing crisis is easing and older adults who have adjusted to the “new normal” in resale values are showing signs that they are willing to sell their homes for less than they could have two years ago, especially when they aren’t carrying hefty mortgages. 

Economic indicators are encouraging bond underwriters and financial feasibility consultants to cautiously advise communities to begin planning for the future.  Projects that were in a holding pattern largely since 2009 are now moving forward and new construction is on the horizon.  Management teams and Board members realize that a deteriorating physical plant will not compete successfully in the market place, and if they want to preserve their identity and market share, they are going to need to spend money to update.

For those who are willing to venture into the visioning and planning cycle, the time – and the environment  – may be ripe to clean off that shelf and get those plans that have been gathering dust the past two years into action.  But those same leaders are wise to keep in mind that those are two, maybe three years old, and should ask how the environment has changed and whether those plans may need re-tooling post-recession.  Beyond that, smart senior living leaders will not only ask whether the plans meet current and near-term needs, but will once again start that longer range process of master planning for the resident of tomorrow.


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