To achieve real change for children, families and communities, we are committed to being responsible stewards of the financial resources with which we are entrusted.
For the 2015-16 fiscal year, the foundation maintained a consistent year-over-year level of cash distributions for charitable activities totaling $399 million, of this $340 million for grant payments and program-related expenses.
During the fiscal year, the financial markets and Kellogg Company stock traded at historic highs. Combined assets of the foundation and trust totaled $9.6 billion on Aug. 31, 2016, an increase of $1.1 billion over the prior fiscal year’s close. Our continued fiscal responsibility and focused management of downside market risk remain central to WKKF’s investment and financial planning strategy.
The trust’s portfolio returned 18.3 percent for the fiscal year. Our Kellogg stock holdings yielded 27.4 percent with a record fiscal year-end close price, and the diversified portfolio returned 5 percent.
The foundation’s portfolio return was 5.9 percent for the fiscal year. The Mission Driven Investments (MDI) portfolio of cash equivalents, fixed income and private equity returned 1.3 percent during this period. Each investment in the MDI portfolio is selected to provide social impact in support of vulnerable children and their families, as well as market-rate returns. Realized benefits validate the foundation’s premise that investments can be leveraged in the portfolio to deliver both social and financial returns.
Another tool the foundation utilizes to support its grantmaking is program-related investments (PRI), which are below market-rate working capital loans to organizations in the United States and Latin America that align with our mission. The MDI and PRI initiatives partner WKKF financial and program staff to cultivate innovative opportunities increasing the foundation’s ability to deliver on its mission and goals.
For the fiscal year, the foundation made new grant commitments of nearly $430 million. Of this total, nearly sixty percent benefited WKKF’s place-based work in priority places of Michigan, Mississippi, New Mexico and New Orleans in the United States, and internationally in Haiti and Mexico. In addition to financial commitments, the foundation maintains seven priority place-based offices with local staff to deepen relationships and expand place-based portfolios. These actions demonstrate the foundation’s commitment to partner in and with communities, for at least a generation, to create conditions which will propel vulnerable children to achieve success.
The foundation’s trustees are provided bimonthly financial statements. Fiscal operating plans prepared by management are reviewed by the budget committee and then forwarded to the full board for approval. Results of the independent accountants’ and the foundation internal audit office’s examinations are reviewed by the full board. Mitchell & Titus, LLP serves as the independent accountants for the foundation and the trust. For tax technical expertise, advisory services and return filings, the foundation and trust use Crowe Horwath, LLP.