A fund for the future, and at work now

Permanent Endowment Fund is a growing force in the improvement of Vineyard lives

By Dan Cabot - December 21, 2006

The Permanent Endowment Fund for Martha's Vineyard (PEF) was created to serve the needs of an Island nobody had yet seen, an Island no one could describe with any confidence, an Island 20 or more years in the future.

Yet the PEF was not a pie-in-the-sky dream. Although always focused on the future, it is already a working, active force in the community today with assets of $5 million. Since its formation in 1983, the fund has already given away more than $1.4 million in grants and scholarships, more than a quarter of a million dollars in 2005 alone, the last year for which complete data are available.

The fund was envisioned in 1982 by Jack Ware and others who wanted to create a way for people to invest in the future of the Island, but not focused on any particular current problem. The philosophy is as true now as it was 24 years ago.

The chairman of the PEF, Debbie Hale, financial administrator for Reynolds, Rappaport & Kaplan, explained that today's needs may or may not be tomorrow's. "We don't know what the issues will be 20 years from now," she said, and gave as an example a fund created a hundred years ago in Tisbury to buy shoes for children who couldn't afford them. Today, most children have shoes, and the administrators of the shoe fund have trouble spending the money. She also mentioned the need 20 years ago to protect open land. "Today, most people would say we're in good shape there."

PEF vice-chairman Jay Talbot told The Times that the PEF doesn't want to be in competition with the worthy causes of the moment, such as the hospital or the YMCA. "Raising endowment is very different from annual fund-raising," he says. "We don't want to crowd other important institutions on the Island." While donations of any size are welcome, and many donors contribute annually, the PEF hopes eventually to attract persons, corporations, or foundations who wish to make an impact further into the future than the next immediate need.

Where does the money come from?

The PEF is an umbrella over a collection of 20 component funds, the largest of which is the unrestricted general discretionary fund, about $1 million. Other funds of various sizes are restricted by the donors to particular kinds of recipients, particularly of scholarships, and together make up more than $2 million in endowments.

Among the 19 smaller, restricted funds, several award scholarships and grants for health-care equipment, programs, and students. Other funds center on the environment, nature conservancy, community service, the elderly, low-income college applicants, and even students planning to become Roman Catholic priests.

In August of this year, after more than two years of negotiations, the Seaman's Friend Society and the PEF reached an agreement to transfer management and control of approximately $1.2 million, or 75 percent, of the assets of the Harriet Norris Goldberg Fund to the PEF. A native Islander, Harriet Norris Goldberg left one-third of her residuary estate as a permanent fund to benefit the ongoing operations of the Seaman's Bethel in Vineyard Haven. In the 19th and early 20th centuries, Vineyard Sound was one of the busiest commercial shipping lanes in the world, and the Bethel provided support for mariners in Island waters.

In a press release, the Boston-based Seaman's Friend Society explained the transfer to the PEF: "While the need for an ongoing presence in the Bethel has disappeared, we believe our assistance on the Vineyard through the Goldberg Fund will allow Seafarer's Friend and the Permanent Endowment Fund to serve the needs of seafarers and of individuals pursuing commercial maritime life. We believe that the Permanent Endowment Fund does an excellent job, and have total confidence in their ability to oversee the fund in the future."

The Goldberg Fund brought the PEF's assets to $5 million.

Then, on Nov. 1 of this year, the Dukes County Savings Bank and the PEF agreed in principle on a plan to transfer approximately $1 million in the bank's charitable foundation to the PEF. When the transfer is accomplished next year, the PEF will have total assets of $6 million.

The PEF also distributes "pass-through" funds, money from donors who ask the PEF to distribute grants or scholarships for them. These funds vary from year to year, but average between $80,000 and $90,000.

Some national foundations may give money only to non-profit organizations. The PEF, as a non-profit, can distribute those funds to individuals in the form of grants and scholarships. An example is the Lumina Foundation, which matches an annual gift from Norris Darrell. The total ($50,000 in 2005) is awarded as scholarships to expand access to college for individuals who are the first in their families to attend college or for whom English is a second language.

As the PEF becomes stronger, it is able to network more and more with other foundations. If the PEF is able to fund only part of a particular proposal through its unrestricted general fund, restricted funds, and pass-through funds, it may be able to identify other sources of funding so that the total need may be met.

Who gets the money?

Although the PEF has more qualified applicants than it can say yes to in any funding cycle, Ms. Hale is concerned that among the wider population of the Island, the PEF is a well-kept secret. "A lot of people on the Island still don't know who we are," she said.

Grants are awarded by the PEF committee each spring and fall. Sixty-five grants in 2005 totaled $179,258 and were for amounts as small as $106 and as large as $77,000. Grants can be for equipment or specific programs, but not for ordinary operating expenses.

The Windemere Nursing and Rehabilitation Center received $1,500 for a defibrillator. Vineyard House was awarded $3,000 to fund a life skills class and a case manager's position. The Oak Bluffs Council on Aging got $2,000 through the South Shore Community Action Council for fuel assistance for five additional families. Smaller amounts went to Hospice, Felix Neck, the All Island Art Show, MV Youth Hockey, the Boys and Girls Club, The Yard, the Chilmark Library, and many others. The hospital benefited from $77,000 from a memorial fund for Tony and Anne Fisher.

There were also 46 scholarships awarded in 2005, totaling $109,150.

Persons interested in applying for a grant or a scholarship may call 508-693-8850 or go on-line to www.permanentendowmv.org.

The fund is changing as well as growing

Just as the original donors were focused on needs as yet unknown, the shape and style of the fund could not have been predicted when Mr. Ware and others began it in 1982. It has continually reinvented itself. Jay Talbot, the present vice-chairman of the PEF, then a brand-new summer resident, first encountered the PEF three years ago as a pro-bono consultant. An employee of the Cleveland Foundation, the second-largest community endowment fund in the country, he knew something about community funds and how they differ from private foundations or corporation charitable foundations. PEF assets were then just over $3 million. He told the trustees that PEF needed to be a fund of $5 million and suggested some ways to get there. They listened, and asked him to stay on as a trustee, which he agreed to do.

Recently the PEF again reached into the Cleveland Foundation for another consultant (again pro bono) about how funds from a community endowment fund should be invested. The PEF and Dukes County Savings Bank are implementing those recommendations.

In the future, as the PEF gains strength from networking with other charitable foundations and a more effective management of its assets, it will be able to show an even stronger prospectus to attract even larger donations and bequests.

Recent articles in The Times have told the story of 37 Edgartown businessmen who invested $10 apiece in 1928, calculating that with compound interest their gesture would be worth $37 million in the year 2219. The forward-thinking donors to the PEF will surpass that figure long before 2219, even though no one now alive can know how the money will be spent a hundred or two hundred years from now.