Groups vie to manage hospital sale proceeds
A high-stakes money management contract is being discussed by the Haywood County Board of Commissioners — one that will decide which of two respected nonprofit organizations will manage up to $20 million for Haywood County.
The funds are proceeds from the sale of Haywood Regional Medical Center. County leaders decided even before the sale the funds would be set aside to address health care concerns in the county. The board realized that a foundation to manage and grow the funds would be in the best interests of Haywood County citizens.
Before Monday's board meeting, commissioners interviewed representatives from the two groups who submitted a proposal to manage the funds — The Community Foundation of Western North Carolina, and Haywood Healthcare Foundation.
Each organization made a presentation to commissioners, County Manager Ira Dove and County Attorney Chip Killian at a special called meeting.
The Community Foundation of Western North Carolina's chief financial officer Graham Keever and vice president of programs Philip Belcher, spoke first.
"We have $250 million in assets under management," said Keever of the prominent funder of nonprofit organizations throughout WNC.
CFWNC officials said that Haywood County's money would stay within Haywood County, but that it could not guarantee a seat to Haywood County on its investments committee, stating that it is "not currently adding members to the committee."
CFWNC does not fundraise. The group manages 1,000 funds, and thus cannot offer specific fundraising support to each fundholder, but does work with individuals who wish to support the funds' purposes.
"Donor interest is central to everything we do," said Belcher. "We work closely with donors to meet their philanthropic goals."
Data from five unnamed funds that CFWNC manages were supplied with its proposal. One such such fund began September 1999 with contributions of just over $7 million and closed September 2016 at $7.5 million, with almost $5 million disbursed in grants in between.
The cost for this management? Based on a $15 million fund, the fee is $100,000 for the first three years. CFWNC uses a consultant, Gerber/Taylor Associates, which is a Securities and Exchange Commission registered investment advisory firm.
To Chairman Swanger's question about citizens' access to audits and financial data, Keever said CFWNC's websites provide that information.
CFWNC facilitates over $14 million in philanthropy annually in Western North Carolina. Nearly $11 million of that is awarded on the advice of donors, and most funds have geographic restrictions. Haywood County's money could stay in Haywood County. CFWNC is the third largest community foundation in North Carolina. CFWNC is located in Asheville and the chairman of its board of directors is A. J. Honecutt, Jr.
Haywood Healthcare Foundation formerly operated as the Haywood Regional Medical Center Foundation but had to dissolve when the hospital was sold to a profit-based company. The foundation has been around since the 1970s when the new hospital in Clyde was built. It is known as a stellar fundraiser and has raised and contributed millions of dollars to the hospital.
When the hospital sale to Duke LifePoint took place in August of 2014, the HRMC Foundation found itself a charity without a cause. It is illegal for a 503(c)(3) nonprofit organization to give money to a for-profit company, and Duke LifePoint is a for-profit hospital.
"We had to make a decision about our future," said Ginger Lang, chairman of HHF. "Our mission has always been to improve the health of Haywood County. That's still our mission and we have expanded it to include unmet healthcare needs in Haywood County."
HHF kept its same board, and many of them attended the meeting Monday to support Lang and HFF's secretary, Waynesville Mayor Gavin Brown, who spoke on their behalf.
Familiar Waynesville philanthropists dotted the commissioners' meeting room in the Historic Courthouse as HFF recounted its local history and new direction.
"This has been a quantum change for us. We'll be here regardless of your decision," Lang told commissioners.
HHF partners with investment consultant Stephens Capital Management, which is registered with the Securities and Exchange Commission. One of Stephens' vice presidents, Jim Holmes, appeared before commissioners Monday. Holmes has homes in Waynesville and Winston-Salem.
"I can be here quickly when you need me," he said.
Holmes came highly recommended by Brown: "I knew him personally from some investments he manages for clients of my law form, and I'm glad he's our consultant. He's successful, his cost is low, and he makes things understandable."
HFF's bylaws stipulate that the foundation is to have a minimum of 20 and a maximum of 24 trustees. Lang explained that two seats are now vacant in case county commissioners choose HFF and want to have two places at its table.
Both Lang and Brown honed in on the foundation's fundraising successes, such as its golf tournaments, casino nights and galas which have brought in many hundreds of thousands of dollars through the years. Most of it went to Haywood Regional Medical Center.
When the board had to change its 'giving' focus two years ago, one of its first initiatives was to work with law enforcement and the county health department to form a drug abuse coalition. In 2014 prescription drug abuse was the county's No. 1 health concern. One in four investigated deaths in Haywood County is reported to be from a prescription drug overdose.
Under its new mission, HFF underwrote 25 small grants in 2015, supporting everything from mental health to dental care. Included in those culturally diverse grants were programs for the mentally and physically challenged. HFF's new logo reads, "New Directions for a Healthier Haywood County."
"We're committed to Haywood County," Brown told commissioners. "We're not going anywhere. We would be amenable to locating our office on county property somewhere if that's something you'd be interested in if you choose us."
The cost for HFF to administer the county's health foundation is negotiable, said Lang. 9 percent of income and interest has been discussed, but nothing is nailed down.
"We appreciate being allowed to talk with you about this opportunity and look forward to further discussion," said Lang. As she left the podium she turned to commissioners and said, "And no matter what decision you make, we love you anyway."
A decision on which group will manage the hospital sale proceeds may be made at the next regular meeting of the board of commissioners scheduled for Nov. 7.