Providence’s Nonprofits Face Diminished Dexter Donation Fund in 2016
Friday, March 25, 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.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST"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.
"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."
Related Slideshow: See How Much Providence Pays in Pension Fund Fees
Per investment information obtained by GoLocal, the following are the management fees paid by the City of Providence Employees Retirment System (as of April 2013 -- Graham Global funds were moved at the last city Investment commission meeting).
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