AAO Foundation Report
Dr. Terry L. Duncan
What a pleasure it is for me to give an upbeat report regarding the financial status of the Foundation. While the campaign has continued to be successful, the dismal activity of the stock market of the past three years has adversely affected the gifting to orthodontic education. The AAO Foundation, however, has had plenty of company, as all endowment Foundations throughout the country have had to curtail their intended funding purposes. Now that the country is in a recovery mode, your Foundation's portfolio health is also recovering nicely. Early into 2003 the Foundation's funds were valued at a little over $10 million. As of October 30, 2003 that value has risen to $12.8 million. For the 5th year in a row the Foundation has received $2 million in pledges.
The Foundation's assets are currently being overseen by three money management companies. The asset allocation is approximately 60% in growth and value large cap funds and 40% in fixed income investments. The composite return of the portfolio is 8.35% YTD (12/31/02-9/30/03) and 2.96% for the 5 year period of 9/30/98 to 9/30/03. Taking into account that the past 3 years had as much as a -20% return the portfolio has made a significant turn around due to the current market condition.
The Finance and Investment Committee of the Foundation recently was presented a long term wealth management projection by UBS Financial Services, the Foundation's financial advisor. Based on the following assumptions: $12 million of beginning assets, annual pledge redemptions of $1.5 million, 2.5% annual inflation, 7.45% return for the current asset allocation model, 10% annual increase in awards and 5% increase in expenses the projection for the year 2022 is to have assets of $50.5 million and $1.8 million of awards annually.
The SWSO should be extremely proud of its leadership role in gifting
to the Foundation. We are
#1 in goal percentage (138%) and dollars pledged ($3.4 million). We are
#2 in pledges redeemed at $2.1 million. All of our components are at goal
for A CASE FOR THE FUTURE.
The contest between SWSO/MSO/GLAO and the other five constituencies ends in January. The current standings show US with a total of $219,500 pledged and THEM with $245,000 pledged. If any of you have been thinking of increasing your current pledge or want to pledge your first CASE FOR THE FUTURE, this would be an excellent time to do so.
The Foundation Board has set some goals for 2005 that are certainly attainable. The Board is planning to reach $25 million in pledges, 500 Regents and 50 Fellows. To celebrate these accomplishments we are planning a black tie event in San Francisco during the 2005 Annual AAO Session. This 2005 CELEBRATION BY THE BAY will be Saturday evening, May 21, 2005 at the Westin St. Francis Hotel. We are looking forward to an exciting gala similar to the one held at the Annual Session in Chicago in 2000.
I am very privileged to represent the SWSO on the Foundation Board. It is most rewarding to work with people who are so dedicated to seeing that orthodontic education as we know it today will continue to be the best it can be. With your continued support I honestly believe we can make a difference. It would be my pleasure to add your name, at any level, to the list of SWSO pledges.