While a billion-dollar donation to charity is good news for the beneficiaries, it leads to a lot of work for foundation executives managing those assets.
The Doris Duke Charitable Foundation, New York, received $1.2 billion last year from the estate of Doris Duke, a tobacco heiress. The foundation was created following a court fight over the terms of the will passing on the assets.
Once the smoke on the suits had cleared, a board to oversee the foundation was created in August 1996, a president was hired in February and a chief financial officer was hired this past August.
The foundation's chief financial officer Alan Altschuler previously worked as chairman of the American Diabetes Association. Before that, he worked in different areas of the Prudential Insurance Co., Mr. Altschuler said.
The Doris Duke foundation's assets now are on a course to be 70% invested in equities, including all type of equities, he said. The foundation's assets have been moving into indexed domestic and international equities on a quarterly basis, Mr. Altschuler said.
With 50% of its assets in equities, the foundation's plan is to reach its targeted 70/30 asset mix over the next eight months, he said.
Currently, foundation executives are managing a move into real estate investment trusts and emerging markets equities, Mr. Altschuler said. Foundation executives expect to have the REIT and emerging markets equities allocation in place by the end of the year.
The board next will look at alternative investments like private equity, hedge funds, oil and gas, and real estate, he said. No decisions have been made regarding alternatives, though, he added.
He said foundation officials created an investment strategy for the assets, mostly held in cash and fixed-income securities, with the assistance of its consultant, Cambridge Associates, Boston.
Another foundation will be receiving its own influx of assets, but the reaction will be much different. The estate of David Packard was scheduled to give $4.5 billion worth of Hewlett-Packard Co. stock to the David and Lucile Packard Foundation, said George Vera, director of finance and administration for the foundation. That valuation is as of the end of 1996; since then HP shares have risen in value, he said.
The foundation, which had $2.4 billion in assets at the end of 1996, keeps almost all of its assets in HP stock already, he said.
Mr. Vera said there are no current plans to do anything with those shares other than hold them.
The new shares are expected to be received some time in the first half of 1998, Mr. Vera said.
