Item 5 - Endowment Campaign Feasibility Study Findings — Poway City Council, October 4, 2022

October 4, 2022, Item #5
DATE:

TO:

FROM:

CONTACT:

SUBJECT:

Summary:

AGENDA REPORT CityofPoway
October 4, 2022
Honorable Mayor and Members of the City Council
Audrey Denham, Director of Community Services~
Audrey Denham, Director of Community Services
(858) 668-4584 or [email protected]
Endowment Campaign Feasibility Study Findings

CITY COUNCIL
Based on direction from the City Council and with generous financial support from the McCarthy Family Foundation in May 2021 the City contracted with Netzel Grigsby Associates (NGA) to conduct an Endowment Campaign Feasibility Study for the Poway Center for the Performing Arts (PCPA). The study was designed to test the possibility of fundraising for an endowment fund to support the PCPA.

With the study complete, the results are now being presented to the City Council.

Recommended Action:

There is no recommended action; this item is to note and file the Endowment Campaign Feasibility Study findings (Attachments A and B).

Discussion:

The City Council recognizes the PCPA as a valuable asset and continues to be committed to operating the facility for residents and user groups to celebrate the arts in Poway. At a workshop in April 2021, City Council provided direction on a multi-faceted strategy to reduce the PCPA General Fund subsidy, while still supporting the arts and ensuring user groups are not priced out of using the facility. One component of that strategy was to enter into an agreement with a professional fundraiser to complete a feasibility study to evaluate the fundraising landscape to ensure fundraising goals for a new endowment and/or capital campaign are realistic and there is sufficient commitment from all stakeholders involved.

The McCarthy Family Foundation, which has supported the PCPA since it was constructed, graciously offered to provide the City with a $1 million grant to assist with completing the feasibility study, as well as provide the seed money to establish a new endowment specifically to support the PCPA.

Initially, the City would receive $30,000 to be used for the feasibility study. Following completion of the study and with a recommendation to pursue an endowment campaign the City would receive the remaining $970,000.
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October 4, 2022, Item #5
The Endowment Campaign Feasibility Study Executive Summary (Attachment A) and Detailed Report (Attachment B) review the study objectives, process, findings, conclusions. and recommendations. At this time, NGA recommends the City not proceed with an endowment campaign. The Attachments provide the reasoning behind NGA's recommendation, as well as steps to be taken should the City pursue an endowment campaign in the future. Since the recommendation is to not pursue an endowment campaign, the City will not receive endowment seed money from the McCarthy Family Foundation. Overall findings show the PCPA is viewed as an asset to the community. There are some suggestions for improving operations. as well as generating more revenue. City staff is actively working on projects that address many of the comments. Current projects include updating the Joint Use Agreement with the Poway Unified School District, which is also on the October 4 City Council agenda for adoption, completing an Operational Analysis and Fee Study, and issuing a request for proposals for a professional mainstage presenter to provide a professional performance series. The City remains dedicated to reducing the PCPA General Fund subsidy without pricing out user groups.

Environmental Review:

This action is not subject to review under the California Environmental Quality Act (CEQA) Guidelines.

Fiscal Impact:

None.

Public Notification:

None.

Attachments:

A. Endowment Campaign Feasibility Study Executive Summary B. Endowment Campaign Feasibility Study Detailed Report Reviewed/Approved By:

Assistant City Manager
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Reviewed By:

Alan Fenstermacher
City Attorney
Approved By:
~~
Chris Hazeltine
City Manager
October 4, 2022, Item #5
City of Poway -Poway Center for the Performing Arts

ENDOWMENT CAMPAIGN FEASIBILITY STUDY EXECUTIVE SUMMARY
Netzel Grigsby Associates, under contract with the City of Poway, conducted an endowment campaign feasibility study from December 2021 through June 2022. The study was designed to test the City of Poway's potential to raise $9.5 million for an endowment fund to support the Poway Center for the Performing Arts (PCPA).

Study Objectives

1. Assess the City of Poway's organizational capacity to conduct an endowment campaign by examining the PCPA's image and the City's management effectiveness.

2. Test the proposed campaign fundraising goal by determining the strength of the case for philanthropic funds and identifying potential for major gifts and campaign leadership.

3. Recommend a plan to enhance overall fundraising and organizational potential.

Study Process
• NGA worked with City staff and the City Council's PCPA Sub-Committee to establish a test goal and develop a case for support that articulates the rationale for the campaign to elicit feedback from interviewees.
• A Study Advisory Task Force, comprising 11 volunteers, reviewed and approved the case for support, identified a list of prospective interviewees believed to be able to assist a campaign effort through a substantial financial or leadership commitment, and received the final report. • With a goal of conducting up to 35 interviews, NGA conducted 30 interviews with 31 individuals. The interviewees are affiliated with the PCPA or the City of Poway as follows (some may be counted more than once):
• 9 Study Advisory Task Force members
• 2 City of Poway councilmembers
8 representatives of corporations or foundations
• 8 representatives of PCPA user groups
• 3 representatives of community or civic service groups • The Study Advisory Task Force made a concerted effort to reach residents of the PCPA's broader service region. Twenty-five (25) interviewees are current Poway residents, and five live in neighboring communities.

ENDOWMENT CAMPAIGN FEASIBILITY STUDY EXECUTIVE SUMMARY PAGE 1 3 of 36 ATTACHMENT A
October 4, 2022, Item #5
Findings & Conclusions

ORGANIZATIONAL CAPACITY
• The Poway Center for the Performing Arts is a valued community asset that provides broad access to arts and culture and enhances the quality of life in Poway. t The majority of interviewees (70%) believe the PCPA plays an important role in supporting and promoting public access to the arts.

Two-thirds of interviewees (67%) attend events at the PCPA once or several times annually. t The venue's strengths include its accessible location, architectural design, program variety, and helpful staff.
• The PCPA is considered underutilized. The City of Poway could take operational measures to realize the PCPA's untapped potential.
t The City is the appropriate entity to own and oversee operations of the PCPA, yet its effectiveness in that role received mixed reviews from interviewees. Underuse as a year round venue, limited marketing and promotion, and deferred maintenance lead some to conclude that the City does not prioritize the PCPA as an asset.

Interviewees offered a variety of options that could enhance the PCPA's impact. They include operating the venue more like a business with a focus on revenue generation and professional management:
• Improve efficiencies to reduce operational costs.
• Realign the subsidized fee structure and raise ticket prices. • Diversify programming.
• Hire professional management staff with experience in the performing arts or outsource operations.
t The public perception that the PCPA and Poway OnStage are a single entity is a common and widespread source of confusion. A marketing effort to establish an identity for the PCPA that is independent of its user groups and raise its visibility is suggested.

FUNDRAISING GOAL
• The prospect of an endowment to support PCPA operations and subsidies has merit, but the City's ability to raise and manage the endowment funds through a fund raising campaign is questioned.
t The public is not broadly aware of how the PCPA is funded or the size of the City's subsidies and annual deficit. Greater financial transparency would strengthen any case for fundraising. t Three-quarters (7 4%) of interviewees believe the City should subsidize user groups to keep fees affordable and community access to the arts available, but not at the current levels.

Interviewees support the parallel effort to restructure current subsidy agreements.

The majority of interviewees (83%) support the concept of an endowment to generate income that would help offset annual operational costs.

ENDOWMENT CAMPAIGN FEASIBILITY STUDY EXECUTIVE SUMMARY
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October 4, 2022, Item #5
t The proposed campaign makes the case for funding the status quo, which is not a compelling motivation for donors. The case explained the City's rationale for the campaign, but failed to present an aspirational vision or express outcomes that will create new benefits and added value as a result of philanthropic funds.
• The City's experience in philanthropic fundraising and management is untested and confidence in its capacity to spearhead a community campaign and manage the funds once raised, is low.
• To instill confidence in donors, interviewees offered suggestions that they think the City should consider in its aim to establish a more sustainable operating model for the PCPA. • Evaluate management operations
• Increase marketing and promotion of the PCPA
• Improve case for fund raising support
• Build corporate partnerships
• Consider a comprehensive fund raising approach
• The tested fundraising goal is not realistic at this time. Relationships with constituents will need to be established and philanthropic potential for major gifts will need to be cultivated. • The majority of respondents indicated a willingness to support the proposed campaign.

Fifteen interviewees offered potential gifts in the low five-figure range or below.

Corporations, especially those in the Poway Business Park, were suggested as potential major gift funding sources; only a few were successfully reached for an interview. • A fundraising organizational structure will need to be created with broad community stakeholder representation. Direct City involvement in fundraising should be minimized.

A structure independent of, but connected to, the City is favored. PCPA user groups, Poway residents, foundations, corporations, and civic groups should be represented and involved. • City Council's endorsement would be important.
• Interviewees as potential campaign leaders did not perceive the proposed campaign to be a priority. A higher level of volunteer leadership is needed to lead and conduct a campaign.

Recommendations
Based on NGA's findings, the City of Poway is not in a position to currently launch a successful endowment campaign. To maximize the benefit of this study, NGA offers the following recommendations.

1. Do not proceed with the proposed endowment campaign at this time. Before pursuing community support, the City needs to instill confidence among the private sector regarding its fiscal responsibility for public funds currently allocated to the PCPA and its dedication to maximizing private philanthropic investment and impact.

2. Complete the concurrent fee studies and operational assessments. Make available the findings, options for restructuring PCPA operations and costs, and the City's action plan to the public, providing full transparency with regard to operational costs and subsidies.

ENDOWMENT CAMPAIGN FEASIBILITY STUDY EXECUTIVE SUMMARY
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October 4, 2022, Item #5

3. Implement a strategic planning initiative for the PCPA that includes a business model, corporate development plan, marketing and communications, and fundraising initiatives. • Form a Strategic Pl,anning Task Force comprising select city staff, council, and PCPA stakeholders to clarify the goals and desired outcomes of the PCPA that will guide operational and future fundraising initiatives.
• Build consensus and generate an aspirational vision for the PCPA's future, establishing an identity for the PCPA as an independent entity, distinct from the City and its user groups. • Establish key goals and a guiding focus for PCPA operations and programming that includes strategies for cultivating key partners, establishing effective communications, maximizing the use of program space, expanding activities and programming, identifying resources, assessing cost structures, and diversifying revenue streams. Key considerations should include:

Investing in professional management resources to ensure the effective and efficient use of programming space, operational practices, community engagement, and finances. • Implementing a corporate development plan to actively engage the business community in promoting the PCPA and cultivate key partnerships with, and access to, local businesses and corporations to pursue fund raising activities and sponsorships in support of the PCPA.

Investing in a broad-based marketing and promotion campaign to raise the profile of the PCPA and its value. As part of this effort, strengthen the City Council's role as ambassadors for the PCPA and regional arts programming, and thoughtfully cultivate relationships with community members and PCPA attendees to clearly promote the value of the PCPA and the City's support of the arts.
• Develop an action plan and timeline to operationalize the strategic goals.

4. Use the strategic plan to guide operational and funding priorities, establish a fundraising infrastructure, and clarify the benefits of philanthropic support. • Identify a dedicated fundraising arm and fund manager for the PCPA. Explore opportunities to form, or partner with, a separate 501(c)(3) nonprofit organization to manage and oversee the fund raising activities of the PCPA. Establishing a nonprofit partner will be critical to current and potential supporters considering philanthropic support. • Reconsider the case for support within a framework that articulates clear and compelling outcomes and an aspirational future for the PCPA that goes.beyond the status quo. Position the PCPA and its future impact worthy of philanthropic support and build confidence that the PCPA, and its programming, will be enhanced as a result of community support.

5. Follow up with volunteers and interviewees to share the outcome of the study. • Meet personally with select interviewees as well as community and business leaders, providing them with an executive summary of the study's findings and recommendations to continue cultivation and engagement efforts.
• Send letters of appreciation to all interviewees thanking them for their participation in the study and articulating the City's plans and the Council's decision. • Include the findings and action plan developed from the fee study and operational assessments.

ENDOWMENT CAMPAIGN FEASIBILITY STUDY EXECUTIVE SUMMARY
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October 4, 2022, Item #5
List of Interviewees
Brad Senter Senior Vice President, UBS Wealth Management Joseph Britton Senior Public Affairs Manager, SDG&E
Dave Brooks Board Member, Rancho Bernardo Community Foundation Craig Brown Community Member
Ginger Couvrette Member, Board of Education, Poway Unified School District Cynthia Elizondo Realtor, Halcyon Real Estate Services
William Engelbrecht Executive, Sempra Energy (Retired)
Ellen Gelwix President-Owner, It's My Party Event Planning (Retired) Dave Grosch Councilmember, City of Poway
Ellen Halamuda Community Member
Rachel McCarthy Henneforth President, The McCarthy Family Foundation Sue Herndon Community Activist (Retired)
Adrienne Wells Holmes Executive Director, Toby Wells Foundation/Partner, Wells Entities James Hyldahl Sr. Vice President of Investments, UBS (Retired) Mary Karscig Former Board President, PCPA Foundation (now Poway OnStage) Todd Kawai Chief Financial Officer, General Atomics Aeronautical Systems Suzanne Kropf Realtor, Berkshire and Hathaway
Dan Krall Financial Professional (Retired)
Barry Leonard Council member, City of Poway
Martha Lyles Director of Development, St. Gabriel Church Leah McBride Senior Loan Officer, Finance of America
Jane D. McCarthy Board Member, McCarthy Family Foundation Kevin McNamara Managing Partner, The Farm in Poway
Ann Murray Executive Director, Fallbrook Music Society
Deborah Schlager Sales, Anthem Electronics (Retired)
Phil Schneider Biotechnology Executive (Retired)
Steve South President and CEO, EDCO Disposal
Steven Stone Broker Associate & Relocation Specialist, Berkshire and Hathaway Neil Tarzy, MD Physician, Family Practice
Joe Terzi President and CEO, San Diego Tourism Authority James Seifert San Diego Gas and Electric/ Consultant (Semi-Retired)

ENDOWMENT CAMPAIGN FEASIBILITY STUDY EXECUTIVE SUMMARY
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October 4, 2022, Item #5
Study Advisory Task Force
Cynthia Elizondo, Chair Realtor, Halcyon Real Estate Services Abby Borretto Community Relationship Advocate
Craig Brown Community Member
Ginger Couvrette Member, Board of Education, Poway Unified School District Dave Grosch Councilmember, City of Poway
Sue Herndon Community Activist (Retired)
Dan Krall Financial Professional (Retired)
Barry Leonard Council member, City of Poway
Rachel McCarthy Henneforth President, The McCarthy Family Foundation Jim Reid VP, Board of Directors, Poway Symphony Orchestra Foundation Kevin McNamara Managing Partner, The Farm in Poway
Audrey Denham Community Services Director, City of Poway Chris Hazeltine City Manager, City of Poway
Wendy Kaserman Assistant City Manager, City of Poway
Belinda Romero Recreation Area Manager, PCPA, City of Poway

ENDOWMENT CAMPAIGN FEASIBILITY STUDY EXECUTIVE SUMMARY
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October 4, 2022, Item #5
City of Poway
Poway Center for the Performing Arts
Endowment Campaign Feasibility Study
September 1, 2022

NETZEL GRIGSBY

ASSOCIATES
Your Vision is Our Mission
Fundraising • Planning • Staffing • Training
9 of36 ATTACHMENT B
October 4, 2022, Item #5
Corporate Office
Mailing Address
P.O. Box 5122
Culver City, CA 90231
310.836.7624
Offices:

Los Angeles
5601 W. Slauson Ave.

Suite 270
Culver City, CA 90230
310.836.7624
Orange County
333 City Boulevard W.

Suite 1700
Orange. CA 92868
714.937.1177
San Diego
402 West Broadway
Suite 400
San Diego. CA 92101
619.595.0020
San Jose
2033 Gateway Place
Suite 500
San Jose. CA 95110
408.451.9906
Santa Barbara
1421 State Street
Suite F
Santa Barbara. CA 93101
805.682.8779
Hawai'i
69-555 Waikoloa Beach
Suite 1204
Waikoloa. HI 96738
808.238.0119
10 of36

NETZEL GRIGSBY ASSOCIATES
Your Vision is Our Mission
September 1. 2022
Wendy Kaserman, Assistant City Manager
Audrey Denham, Director of Community Services
Belinda Romero, Recreation Area Manager
City of Poway
13325 Civic Center Drive
Poway, California 92064
Dear Wendy, Audrey, and Belinda,
We are pleased to submit this full report of the endowment campaign feasibility study contracted between Netzel Grigsby Associates (NGA) and the City of Poway.

The study's objective was to evaluate the City's fund raising potential to launch an endowment campaign to support the Poway Center for the Performing Arts (PCPA).

Feasibility studies uncover the attitudes and opinions held by people whose support can be vital to the success of the planned fundraising campaign. The people selected for personal interviews provided our team with input that was sincere, thoughtful, and constructive. We trust that the City of Poway council members and staff will appreciate the candor of our observations and conclusions, and the potential our recommendations will help the City realize as it pursues a more sustainable operating model for the PCPA.

On behalf of NGA. we express our gratitude to you and the individuals whose opinions and suggestions form the basis of this report. Through their cooperation, this report has been assembled and is now presented to you for your consideration.

Sincerely,
Cody J. Grigsby
Senior Vice President
cc: W. Jay Grigsby
Jeanne E. Schmelzer, CFRE
Yvette Herrera, CFRE
October 4, 2022, Item #5

OF NOTE
This report is an internal planning document. Fundamental to its value is its candor, this report is meant to inform City leadership of opportunities and challenges that may impact fund raising. We intend any statements, favorable or critical, to be guides in strengthening the capacity and fundraising appeal of the City of Poway and the Poway Center for the Performing Arts.

Moreover, this report identifies steps to present a compelling case for fundraising support: it is not itself a presentation of the case and should not be used as a marketing or promotional document designed for a general audience.

ENDOWMENT CAMPAIGN FEASIBILITY STUDY
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October 4, 2022, Item #5
City
of
Poway
-
Poway
Center
for
the
Performing
Arts

ENDOWMENT

CAMPAIGN

FEASIBILITY
STUD
Y
Table
of
Contents
Section
Page
Acknowledgments
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1. Introduction..
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1.1 Study
Objectives
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1.1 Study
Process
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1.1 2.

Findings
&
Conclusions
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2.1 Organizational
Capacity
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2.1 Fund
raising
Goal..
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2.3 3.

Recommendations
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3.1 4.

Appendix.................
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4.1 List
of
Interviewees
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4.2 Study
Advisory
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Force
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4.4 Case
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4.5 Gift
Chart
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Achieve
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Goal
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4.9 ENDOWMENT

CAMPAIGN
FE

ASIBILITY
STUDY
PAGE
ii
12 of
36 October 4, 2022, Item #5
City of Poway -Poway Center for the Performing Arts

ENDOWMENT CAMPAIGN FEASIBILITY STUDY
Acknowledgements
We wish to express our sincere appreciation to the members of the Study Advisory Task Force for their support of the endowment campaign feasibility study:

Cynthia Elizondo, Chair
Abby Borretto
Craig Brown
Ginger Couvrette
Dave Grosch
Sue Herndon
Dan Krall
Barry Leonard
Rachel McCarthy Henneforth
Jim Reid
Kevin McNamara
City of Poway Staff
Audrey Denham
Chris Hazeltine
Wendy Kaserman
Belinda Romero
Special thanks to Audrey Denham, Director of Community Services for the City of Poway, for her facilitation of the study process and for scheduling interviews with Task Force members.

Finally, we thank the interviewees who participated in the study for giving their time and opinions. They graciously made themselves available to us and discussed the proposed project in a helpful and positive manner. The study would not have been possible without their valuable input.

NGA has been privileged to serve the City of Poway. We are confident that these findings and recommendations will serve as valuable tools in advancing plans for sustainable operations of the Poway Center for the Performing Arts.

ENDOWMENT CAMPAIGN FEASIBILITY STUDY
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October 4, 2022, Item #5
City of Poway-Poway Center for the Performing Arts

ENDOWMENT CAMPAIGN FEASIBILITY STUDY
Section 1: Introduction
Netzel Grigsby Associates (NGA), under contract with the City of Poway, conducted an endowment campaign feasibility study from December 2021 through June 2022. The study was designed to test the City of Poway's potential to raise $9.5 million for an endowment fund to support the Poway Center for the Performing Arts (PCPA).

Study Objectives
The feasibility study had three primary objectives:

1. Assess the City of Poway's organizational capacity to conduct a $9.5 million endowment campaign to support the PCPA by examining:
• The image of the PCPA among stakeholders and potential campaign contributors. • Perceptions of PCPA's effectiveness, including the City's management and oversight, and value as a community asset and community-based performing arts venue. • Operational capacity, including strengths and weaknesses.

2. Evaluate the City's case for support and fund raising goal for the proposed campaign by considering:
• The strength of the case for philanthropic funds in support of an endowment. • Potential major contributors to the campaign.
• Potential for other revenue sources, including foundations. • The level and quality of potential volunteer leadership for a campaign. • Pressing community issues and other factors that could impact campaign fundraising.

3. Recommend a plan to enhance overall fundraising and organizational potential.

Study Process

1. NGA worked directly with City of Poway staff Audrey Denham, Community Services Director; Wendy Kaserman, Assistant City Manager; and Belinda Romero, Recreation Area Manager, PCPA, and the City Council's PCPA Subcommittee, Councilmember Dave Grosch and Councilmember Barry Leonard to:
• Establish a test goal. An endowment with a $9.5 million corpus would generate yearly revenue to offset 50% of the City's annual deficit of the PCPA in current dollars. • Develop the proposed case for support, which articulated the need for the campaign and its anticipated outcomes. City staff, councilmembers, select community members and PCPA stakeholders were included in the development of the case for support. The case was reviewed and approved by city staff and City Council's PCPA Subcommittee prior to sharing with volunteers and interviewees.

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October 4, 2022, Item #5
• Recruit a Study Advisory Task Force to guide the process. Eleven volunteers were recruited to review and approve the case for support, identify and facilitate access to priority interviewees, and receive the final study report.
• Create a community survey. The survey tool was developed by NGA However, City staff opted not to move forward after the City Council determined that the PCPA is a valuable asset that the City is committed to operating.

2. To ensure a valid sampling, NGA specified that interviews be conducted with a cross-section of individuals with a vested interest in the PCPA and the arts. The objective was to reach people believed to be influential, held in high regard, and able to assist a campaign effort through a financial or leadership commitment, or both.
• Using the criteria of perceived major gift capacity, interest, and accessibility, the Study Advisory Task Force identified 56 initial interview candidates.

Five candidates declined to be interviewed and five were unavailable during the interview schedule or agreed to be interviewed but were unresponsive to scheduling. Task Force members who were assigned to connect with prospective interview candidates were unable to establish contact with 12 identified candidates.
t Based on the study process, the NGA team found that the City does not have established relationships with constituents who fit the interviewee profile, and limited capacity to and interest in developing these relationships.
• With a goal of conducting up to 35 interviews, NGA conducted 30 interviews with 31 individuals. The interviewees are affiliated with the PCPA or the City of Poway as follows (some may be counted more than once):
9 Study Advisory Task Force members
t 2 City of Poway council members
8 representatives of corporations or foundations: EDCO, General Atomics, The Farm in Poway, McCarthy Family Foundation, Sempra, and Toby Wells Foundation • 8 representatives of PCPA user groups: Poway OnStage, Poway Unified School District, and Poway Symphony Orchestra
3 representatives of community or civic service groups~ Rotary and Kiwanis *Several interviewees suggested interviewing the mayor. However, the City Council established a PCPA subcommittee, and the thoughts and opinions of the mayor and City Council are articulated through the subcommittee. The subcommittee, made up of Councilmembers Dave Grosch and Barry Leonard, were active members of the Task Force and were interviewed during the study.
• An effort was made to interview residents of PCPA's broader service region, beyond Poway. • 25 interviewees are current Poway residents
5 are former Poway residents who now live in neighboring communities of Encinitas, Rancho Bernardo, and Lakeside
t 1 works in Poway and resides in a different county

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PAGE 2.2
October 4, 2022, Item #5

3. Interviews
were
conducted
over
six
weeks
in
May
and
June
2022.

They
ranged
from
25 to
90 minutes,
averaging
50 minutes.

Nineteen
interviews
were
conducted
by
video
conference.
nine
by
phone,
and
two
in
person.

All
were
based
on
a
discussion
guide
used
to
initiate
dialogue
and
record
responses.

Each
interviewee
was
shown
the
following
documents
during
the
interview:
•
Case
for
Support
•
Gift
Chart
to
Achieve
$9
.5
Million
Campaign
Goal
•
Study
Advisory
Task
Force
Roster
The
study
team
of
Cody
Grigsby,
senior
vice
president;
Jeanne
Schmelzer
, CFRE,
executive
vice
president;
Yvette
Herrera,
CFRE,
vice
president;
and
Amy
Epman,
senior
vice
president
and
director
of
special
services
, is
confident
that
this
report
and
its
recommendations
will
help
the
City
of
Poway
determine
its
future
sustainability plans
for
the
PCPA.

ENDOWMENT

CAMPAIGN

FEASIBILITY
STUDY
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2.3 October 4, 2022, Item #5
City of Poway-Poway Center for the Performing Arts

ENDOWMENT CAMPAIGN FEASIBILITY STUDY
Section 2: Findings & Conclusions
Organizational Capacity
An important objective of any study is to evaluate key indicators of an organization's capacity to achieve a successful campaign. Success factors include:

A positive image among those who are closest to the organization and beyond. Perceptions of organizational strength and weakness, whether accurate or not, influence a prospective donor's willingness to consider a gift to the campaign. The degree to which the mission or purpose is viewed as compelling is also important in this regard.

Strong leadership from volunteers and staff. A successful campaign requires leaders with the commitment and ability to assume the responsibility of a campaign. Fund raising potential increases if leadership is well known and highly respected, with the ability and willingness to recruit other influential individuals to participate in the campaign.

Knowledge of current fund raising best practices. Fund raising experience and practice provide a base of committed donors and volunteer leaders trained in proven fundraising practices.

The following are the findings and conclusions underlying NGA's evaluation of the City's current organizational capacity to conduct a successful campaign.

1. The Poway Center for the Performing Arts is a valued community asset that provides broad access to arts and culture and enhances the quality of life in Poway.

The majority of people interviewed for the study (70%) believe that the Poway Center for the Performing Arts plays an important role in supporting and promoting public access to the arts. The City's partnership with the Poway Unified School District, Poway OnStage, and local groups brings greater exposure to the arts for residents and regional visitors. In addition, the PCPA is seen as a place for the community to gather for local Poway events.

How important is PCPA in supporting and promoting public access to performing arts in Poway region?
0% 10% 20% 30% 40% 50% 60% 70% 80%
■ Extremely important ■ Very important II Somewhat important ■ Not so important

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■ Not at all important ■ Did not know/rate
90% 100%
PAGE 2.1
October 4, 2022, Item #5
Two-thirds
of
interviewees
(67%)
said
they
attend
events
at
the
PCPA
once
or
several
times
each
year.

Many respondents
recount
experiences
that
their
children
had
as
student
performers.

Multiple
1 respondents
indicated
that
they
were
either
former
annual ticket
holders
and/or
used
to
attend
the
PCPA more
frequently,
yet
due
to
current
programming
their
attendance
had
declined
.

How
often
do
you
attend
events
or
performances
at
the
PCPA?
■
M
ulti
ple
tim
es
per
yea
r
■
O
nce
a
year
■
Occasio
nally
■
Neve
r
The
venue's
particular
strengths,
according
to
interviewees,
are
its
accessible
location
and
its
architectural
des
ign.

Others
noted
the
PCPA's
size
, the
variety
of
programs
offered
, and
the
friendly
and
helpful
staff
as
benefits
of
the
facility
.
"The
PCPA
is
a
community
gem
. It
adds
to
the
ambience
and
status
of
the
City."
"Nothing
else
nearby
compares
to
the
size
and
quality
of
the
facility
."
"The
location
is
convenient
and
makes
the
arts
accessible
to
the
community,
especially
to
young
people.
"
"If
you
are
a
parent
of
a
PUSD
student,
I'm
sure
you
attend
events
at
the
PCPA."

2. The
PCPA
is
considered
underutilized.

The
City
could
take
operational
measures
to
realize
the
PCPA's
untapped
potential.

Interviewees
in
general
agree
that
the
City
of
Poway
is
the
appropriate
entity
to
own
and
oversee
operations
of
the
PCPA.

Its
effectiveness
in
that
role
received
mixed
opinions
: 23%
approve
of
the
City's
management
of
the
PCPA
while
an
equal
percentage
disapprove
, 27%
claimed
a
neutral
position,
and
27%
could
not
rate
the
City's
oversight
due
to
limited
knowledge
and/or
participation.

While
some
exp
ressed
the
belief
that
the
City
is
"trying
really
hard"
and
"doing
the
best
they
can"
with
the
resources
they
have,
others
conclude
that
the
City
does
not
value
the
PCPA
based
on
the
way
it
manages
and
promotes
the
venue.

Respondents
point
to
the
PCPA's
underutilization
as
a
year-round
venue
, limited
marketing
and
promotion
, and
deferred
maintenance
.

ENDOWMENT

CAMPAIGN
FEA

SIBILITY
STUDY
18 of
36 PAGE

2.2 October 4, 2022, Item #5
How effective is the City's overall management
of PCPA operations?
0% 20% 40% 60% 80% 100%
■ Extremely effective ■ Very effective II Somewhat effective ■ Not so effective ■ Not at all effective ■ Did not know/rate Several respondents believe the City should operate the PCPA more like a business with a focus on increasing revenue generation and hiring professional staff who have experience in theater management. Multiple respondents suggested booking more diverse entertainment with higher-end options and longer runs, increasing ticket prices, and improving concessions. Others believe a marketing effort should focus not only on raising the visibility of the PCPA but establishing an identity for the facility that is independent of its user groups, specifically Poway OnStage. Currently, it is believed that most residents are not aware of the distinctions, which will hamper any future fundraising initiatives.
"The City manages the PCPA like a liability and positions it as a burden." "It goes unused much of the time. A facility like that should never be dark." "I personally found the price of admission offensively low." "They have very limited program offerings that make me say 'I want to go to that!"' "The PCPA should secure stronger acts that appeal to a broader audience and market them."
"They are good people doing a fair job, but the City needs to hire experienced staff who know what can be successful and who know what works."
"With a location next to the school and close affiliation with Poway OnStage, the PCPA lacks an identity of its own. They should promote it more and follow up with attendees and donors."
Fundraising Goal
Another objective of a study is to evaluate factors that impact an organization's ability to achieve its anticipated campaign fundraising goal. Important factors in this regard include:

Key stakeholders' opinions regarding the importance of the proposed project. Fund raising potential increases when prospective donors understand the need for the campaign and view the project as compelling. The strongest case is one that presents an inspiring vision of what the future holds if the project is completed successfully, and a vision that is perceived to be a high priority by a large segment of the community.

ENDOWMENT CAMPAIGN FEASIBILITY STUDY
19 of 36
PAGE 2.3
October 4, 2022, Item #5
•
Pool
of
potential
contributors.

A
successful
campaign
requires
enough
potential
donors
who
will
consider
supporting
the
campaign
at
the
anchor
gift
levels
needed
to
reach
goal-as
indicated
on
the
chart
of
gifts.

Stretch
giving
among
those
closest
to
the
organization
is
extremely
important
because
their
commitment
will
set
the
standard
of
giving
for
others.
•
Pool
of
potential
campaign
leaders.

A
major
campaign
is
an
extraordinary
event
in
the
life
of
any
organization,
requiring
dedicated
volunteer
and
staff
leadership
with
sufficient
strength
to guide
the
campaign
to
success.

Campaign
leaders
must
be
highly
respected,
able
to
inspire
and
motivate
volunteers,
willing
to
make
a
personal
stretch
gift,
and
inclined
to
commit
a
substantial
amount
of
time
to
ensure the
success
of
the
campaign.
•
External
factors
that
might
affect
the
campaign.

It
is
important
to
be
aware
of
both
real
and
perceived
factors
such
as
other
campaigns
or
projects
that
are,
or
will
be,
taking
place,
economic
conditions,
and
trends
in
the
local
community
that
may
impact
the
campaign.

The
following
are
NGA's
findings
and
conclusions
regarding
the
campaign
potential
of
the
City
of
Poway.

1. The
prospect
of
an
endowment
to
support
PCPA
operations
and
subsidies
has
merit,
but
the
City's
ability
to
raise
and
manage
the
endowment
funds
through
a
fundraising
campaign
is
questioned. The
majority
of
interviewees
(83%)
read
the
case
document
that
explains
the
rationale
for
the
City's
proposed
endowment
campaign.

City
staff
worked
with
NGA
to
develop
the
initial
case
for
support,
an
exercise
that
was
new
to
them
and
had
never
been
previously
undertaken.

Task
Force
members
helped
refine
the
document.

Ultimately,
staff
and
Task
Force
members
noted
their
appreciation
for
the
process,
viewing
it
as
a
first
step
in
defining
and
articulating
the
importance
of
the
PCPA
as
a
unique
asset
and
the
major
role
the
City
plays
in
its
ongoing
operations.

Interviewees
appreciated
the
case
as
a
valuable
educational
piece
and
suggested
using
an
adjusted
case
as
a
model
for
future
marketing. Prior
to
the
reading
the
case,
most
interviewees
(83%)
said
they
were
aware
that
the
PCPA's
annual
operating
budget
is
supplemented
by
the
City
of
Poway.

Fewer
(57%)
knew
that
the
PCPA does
not
benefit
from
the
fundraising
activities
of
its
user
groups.

Both
points
of
fact
are
not
well
known
by
the
public,
according
to
interviewees.

Moreover,
many
respondents
who
knew
these
facts
were
not
aware
of
the
magnitude
of
the
City's
subsidies
and
annual
deficit.

Among
the
general
public,
the
perception
that
the
PCPA
and
Poway
OnStage
are
a
single
entity
is
a
common
and
widespread
source
of
confusion
. These
findings
suggest
greater
financial
transparency
would
help
distinguish
the
PCPA
within
the
framework
of
its
own
identity.
"People
think
that
Poway
OnStage
and
PCPA
are
the
same
thing."
"I
knew
ticket
prices
were
subsidized
by
the
City,
but
I did
not
realize
how
much
the
City
was
subsidizing.

This
needs
to
change."
"I
was
surprised
that
Poway
OnStage
funds
do
not
support
the
PCPA
. It
is
really
important
for
people
to
know
that
they
are
separate
and
that
one
does
not
support
the
other."
Interviewees
were
asked
about
their
level
of
agreement
with
the
City
subsidizing
its
user
groups
in
order
to
keep
fees
affordable
and
community
access
to
the
arts
available. Three-quarters
(7
4%)
indicated
support
for
City
subsidies,
but
not
at
the
current
levels.

Interviewees
support
the
parallel

ENDOWMENT

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FEASIBILITY
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2.4 October 4, 2022, Item #5
effort to re-negotiate and restructure the subsidy agreements, suggesting consideration of a sliding scale approach based on the size of an organization's budget. "It is appropriate and necessary for the City to support the arts." "The City should be more intentional about who they subsidize and at what level." "We need more transparency about the numbers. How are the subsidies and costs broken down?"
What is your level of agreement with ...

City's subsidies for PCPA user groups
Endowment to offset PCPA operational costs
0% 20% 40% 60% 80%
■ Strongly agree ■ Agree ill Neutral ■ Disagree ■ Strongly disagree ■ Did not know/rate 100%
The proposed endowment, which would generate income to help offset annual operational costs, received strong support from interviewees as a possible funding strategy. Sixty perce~t (60%) indicated strong agreement with the idea and another 23% expressed agreement. Their enthusiasm for the concept was tempered by two primary factors:
1) Compelling goal and impact: The endowment as proposed would fund the status quo, which is not a compelling motivation for donors. People want to know what will be different and better as a result of this fundraising effort. They also want to know if the proposed goal is enough to make a marked impact in the long term.
2) Likelihood of success: The City leadership's interest and capacity to raise and manage the proposed funds is in question. People want to know how the City, with no expertise in philanthropic fund raising, intends to spearhead a community campaign and how it will invest and use the endowment dollars once raised.
"An endowment is a good idea. It's fiscally responsible." "We should not raise money to keep things going the way that they are. There is no incentive to balance the budget."
"The annual subsidy of the PCPA accounts for less than 1 % of the City's current budget.

Trying to cut this in half is a whole lot of work for very little gain." "There is skepticism regarding the City's leadership and who will be managing the campaign."

ENDOWMENT CAMPAIGN FEASIBILITY STUDY
21 of 36
PAGE 2.5
October 4, 2022, Item #5
To instill confidence in donors, interviewees offered suggestions that they think the City should consider in its aim to establish a more sustainable operating model for the PCPA. Some of the suggestions are already under consideration as a concurrent effort with the study. Others have been mentioned earlier in this report.

Evaluate management operations:
• Improve efficiencies to reduce operational costs
• Realign the subsidized fee structure and raise ticket prices • Diversify programming
• Hire professional management staff with experience in the performing arts or outsource operations
Increase marketing and promotion of the PCPA:
• Create an independent identity for the PCPA as a valued regional community asset • Convey City commitment to advancing a robust performing arts scene • Tell stories to raise awareness and excitement
Improve case for fundraising support:
• Define clear goals for the endowment
• Commit to transparent communication about the current fee structure and financial need • Present an aspirational vision for the PCPA and express anticipated outcomes that will create new benefits and added value
Build partnerships:
• Position fund raising for PCPA as a joint effort between the City and its user groups • Build relationships with business park tenants to build corporate support • Establish or partner with a 501(c)3 to collect charitable contributions Consider a comprehensive fundraising approach:
• Secure anchor gifts through personal, face-to-face solicitations • Hold annual charitable fundraising events, e.g. gala or golf tournament • Create a sustaining membership program
• Pursue corporate sponsorships
• Offer donors naming opportunities

2. The tested fundraising goal is not realistic at this time. Relationships with constituents will need to be established and philanthropic potential for major gifts will need to be cultivated.

The feasibility of the tested $9.5 million goal did not generate consensus among interviewees. One quarter of respondents (24%) believe the goal is realistic, expressing optimism for a challenging stretch goal in a community with capacity. One-third (34%) do not believe the goal is realistic, citing an undeveloped patron base and lack of donor relationships.

ENDOWMENT CAMPAIGN FEASIBILITY STUDY
22 of 36
PAGE 2.6
October 4, 2022, Item #5
How realistic is a $9.5 million endowment campaign goal? 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
■ Highly realistic ■ Realistic II Neutral ■ Unrealistic II Highly unrealistic ■ Did not know/rate The majority of respondents indicated a willingness to support the proposed campaign. Ninety percent (90%) are willing to publicly endorse the project and would consider making a financial contribution to the campaign. In addition, 11 respondents said they would be willing to consider including the PCPA in their estate plan in support of an endowment. Many noted that their decision and ultimate degree of support would depend on a more aspirational case for support and/or on acquiring more information.

Potential Interviewee Campaign Engagement
Endorse Campaign
Make Financial Gift
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
■ Yes ■ Maybe ■ No
Sixteen interviewees offered potential gifts. Apart from one seven-figure gift that was already identified prior to the study, seven were potential five-figure gifts ranging from $10,000 to $50,000 and eight were less than $10,000.

Interviewees also offered other potential funding sources they believe have the capacity to give at major gift and lead gift levels. Corporations, especially those located in the Poway Business Park, were heavily mentioned; only a few were successfully reached for an interview. Other suggested sources were not interviewed; they will need to be qualified, and access identified, before they can be considered viable donor prospects.

ENDOWMENT CAMPAIGN FEASIBILITY STUDY
23 of 36 ·
PAGE 2.7
October 4, 2022, Item #5
Most
interviewees
do
not
believe
that
PCPA
user
groups
and
other
regional
performing
arts
organizations
present
significant
fund
raising
competition
for
an
endowment
campaign
that
was
proposed
to
begin
in
fall
of
2022
and
conclude
in
2024. Despite
growing
economic
concerns
such
as
inflation,
68%
of
respondents
think
now
is
the
right
time
for
the
PCPA
to
undertake
a
campaign
and
applauded
the
City's
efforts
in
exploring
the
opportunity
through
the
feasibility
study.
"You
have
to
start
sometime
. This
needs
to
happen and
I am
glad
they
are
doing
this."
"There
is
other
work
to
be
done
before
a
campaign.

They
need
to
work
on
marketing,
promotion,
and
articulating
value
and
benefit
before
looking
to
fundraise.
"
"When
is
the
right
time?
Might
as
well
be
now."
"They
should
finish
their
other
PCPA
assessments
and
improve
the
financial
condition
first,
raise
prices,
and
establish
some
trust
with
community
members
and
stakeholders."
"It's
absolutely
the
right
time!
Sooner
rather
than
later."

3. A
fundraising
organizational
structure
will
need
to
be
created
with
broad
community
stakeholder
representation.

Direct
involvement
of
City
staff
and
councilmembers
in
fundraising
should
be
minimized. In
addition
to
gift
potential,
the
study
examined
the
ideal
organizational
structure
the
City
should
form
to
raise
funds
on
behalf
of
the
PCPA.

Most
respondents
favor
an
option
independent
of,
but
connected
to,
the
City
of
Poway,
such
as
establishing
a
separate
nonprofit
or
foundation.

Others
suggested
forming
an
arts
commission
or
a
traditional
campaign
committee.

According
to
the
interviewees,
the
fundraising
structure
should
include
stakeholders
representing:
•
User
groups
•
Poway
residents
•
Foundations
•
Corporations
and
small
businesses
•
Chambers
of
commerce
and
other
civic
groups
While
direct
involvement
of
the
City
Council
should
be
limited,
endorsement
would
be
important.

Interviewees
were
asked
to
name
strong
candidates
to
lead
an
endowment
campaign
as
volunteer
ambassadors
and
fundraisers
. Nineteen
specific
individuals
or
couples
were
suggested
for
campaign
chair,
four
mentioned more
than
once
. Among
interviewees,
eight
respondents
(29%)
said
they
would
be
willing
to
serve
in
a
campaign
leadership
position
and
another
nine
(32%)
would
consider
it.

Eleven
(39%)
said
no.

While
some
support
and
interest
was
identified,
the
proposed
campaign
was
not
perceived
as
a
priority
among
interviewees
as
potential
campaign
leaders.

In
NGA's
experience,
a
higher
level
of
volunteer
leadership
is
needed
to
lead
and
conduct
a
campaign.

The
City
would
benefit
from
building
more
organizational
traction
and
forging
relationships
with
key
community
leaders
who
will
open
doors
to
prospective
supporters
and
possible
future
volunteers.

ENDOWMENT

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2.8 October 4, 2022, Item #5
Interviewee
Willingness
to
Provide
Campaign
Volunteer
Leadership
■
Yes
■
Maybe
No

ENDOWMENT

CAMPAIGN

FEASIBILITY
STUDY
PAGE

2.9 25
of
36 October 4, 2022, Item #5
City
of
Poway
-
Poway
Center
for
the
Performing
Arts

ENDOWMENT
CA
MPAIGN

FEASIBILIT
Y
STUD
Y
Section
3: Recommendations
Based
on
NGA
's findings,
the
City
of
Poway
is
not
in
a
position
to
currently
launch
a
successful
endowment
campaign.

To
maximize
the
benefit
of
this
study
, address
any
challenges
that
surfaced,
and
better
position
the
City
of
Poway
and
the
PCPA
for
a
successful
future
fundraising
initiative,
NGA
offers
the
following
recommendations
.

1. Do
not
proceed
with
the
proposed
endowment
campaign
at
this
time.

Before
pursuing
community
support
, the
City
needs
to
instill
confidence
among
the
private
sector
regarding
its
fiscal
responsibility
for
public
funds
that
are
currently
allocated
to
the
PCPA and
its
dedication
to
maximizing
private
philanthropic
investment
and
impact.

2. Complete
the
concurrent
fee
studies
and
operational
assessments.

Make
available
the
findings,
options
for
restructuring
PCPA
operations
and
costs,
and
the
City's
action
plan
to
the
public
,
providing
full
transparency
with
regard
to
operational
costs
and
subsidies.

3. Implement
a
strategic
planning
initiative
for
the
PCPA
that
includes
a
business
model,
corporate
development
plan,
marketing
and
communications,
and
fundraising
initiatives.
•
Form
a Strategic
Planning
Task
Force
comprising
select
city
staff
, council,
and
PCPA
stakeholders
to
clarify
the
goals
and
desired
outcomes
of
the
PCPA
that
will
guide
operational
and
future
fundraising
initiatives.
•
Build
consensus
and
generate
an
aspirational
vision
for
the
PCPA's
future,
establishing
an
identity
for
the
PCPA
as
an
independent
entity
, distinct
from
the
City
and
its user
groups
.
•
Establish
key
goals
and
a
guiding
focus
for
PCPA
operations
and
programming
that
includes
strategies
for
cultivating
key
partners,
establishing
effective
communications,
maximizing
the
use
of
program
space,
expanding
activities
and
programming,
identifying
resources,
assessing
cost
structures,
and
diversifying
revenue
streams.

Key
considerations
should
include:
•
Investing
in
professional
management
resources
for
the
PCPA
that
will
ensure
the
effective
and
efficient
use
of
programming
space
, operational
practices,
community
engagement,
and
finances
.
•
Implementing
a
corporate
development
plan
to
actively
engage
the
business
community
in
promoting
the
PCPA
and
cultivate
key
partnerships
with,
and
access
to
, local
businesses
and
corporations
to
pursue
fund
raising
activities
and
sponsorships
in
support
of
the
PCPA.
•
Investing
in
a
broad-based
marketing
and
promotion
campaign
to
raise
the
profile
of
the
PCPA
and
its
value.

As
part
of
this
effort
, strengthen
the
City
Council's
role
as
ambassadors
for
the
PCPA
and
regional
arts
programming
, and
thoughtfully
cultivate
relationships
with
community
members
and
PCPA
attendees
to
clearly
promote
the
value
of
the
PCPA
and
the
City
's support
of
the
arts
.

Develop
an
action
plan
and
timeline
to
operationalize
the
strategic
goals
.

ENDOWMENT
CA
MP
A
IGN
FE

ASIBILITY
STUDY
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3. 1
October 4, 2022, Item #5

4. Use the strategic plan to guide operational and funding priorities, establish a fund raising infrastructure, and clarify the benefits of philanthropic support. • Identify a dedicated fundraising arm and fund manager for the PCPA. Explore opportunities to form, or partner with, a separate 501(c)(3) nonprofit organization to manage and oversee the fundraising activities of the PCPA. Establishing a nonprofit partner will be critical to current and potential supporters considering philanthropic support. • Reconsider the case for support within a framework that articulates clear and compelling outcomes and an aspirational future for the PCPA that goes beyond the status quo. Position the PCPA and its future impact worthy of philanthropic support and build confidence that the PCPA, and its programming, will be enhanced as a result of community support.

ENDOWMENT CAMPAIGN FEASIBILITY STUDY
27 of 36
PAGE 3.2
October 4, 2022, Item #5
City
of
Poway
-
Poway
Center
for
the
Performing
Arts

ENDOWMENT

CAMPAIGN

FEASIBILITY
STUDY
Section
4:

Appendix

ENDOWMENT

CAMPAIGN

FEASIBILITY
STUDY
28 of
36 PAGE

4.1 October 4, 2022, Item #5
City
of
Poway
-
Poway
Center
for
the
Performing
Arts

ENDOWMENT

CAMPAIGN

FEASIBILIT
Y
STUD
Y
List
of
Interviewees
Brad
Senter
Senior
Vice
President
, UBS
Wealth
Management
Joseph
Britton
Senior
Public
Affairs
Manager,
SDG&E
Dave
Brooks
Board
Member,
Rancho
Bernardo
Community
Foundation
Craig
Brown
Community
Member
Ginger
Couvrette
Member
, Board
of
Education,
Poway
Unified
School
District
Cynthia
Elizondo
Realtor,
Halcyon
Real
Estate
Services
Will
iam
Engelbrecht
Executive,
Sempra
Energy
(Retired)
Ellen
Gelwix
President-Owner,
It's
My
Party
Event
Planning
(Retired)
Dave
Grosch
Councilmember
, City
of
Poway
Ellen
Halamuda
Community
Member
Rachel
McCarthy
Henneforth
President,
The
McCarthy
Family
Foundation
Sue
Herndon
Community
Activ
ist
(Retired)
-----
-
-
-----------
--
Adrienne
Wells
Holmes
Executive
Director
, Toby
Wells
Foundation/Partner,
Wells
Entities
James
Hyldahl
Sr.

Vice
President
of
Investments,
UBS
(Retired)
'-
Mary
Karscig
Former
Board
President,
PCPA
Foundation
(now
Poway
OnStage)
Todd
Kawai
Chief
Financial
Officer,
General
Atomics
Aeronautical
Systems
Suzanne
Kropf
Realtor
, Berkshire
and
Hathaway
Dan
Krall
Financial
Professional
(Retired
)
Barry
Leonard
Council
member,
City
of
Poway
Martha
Lyles
Director
of
Development,
St.

Gabriel
Church
Leah
McBride
Senior
Loan
Officer,
Finance
of
America
Jane
D.

McCarthy
Board
Member
, McCarthy
Family
Foundation
Kevin
McNamara
Managing
Partner
, The
Farm
in
Poway
Ann
Murray
Executive
Director
, Fallbrook
Music
Society

ENDOWMENT

CAMPAIGN
FEA

SIBILITY
STUDY
29 of
36 PAGE

4.2 October 4, 2022, Item #5
Deborah
Schlager
Sales,
Anthem
Electronics
(Retired)
Phil
Schneider
Biotechnology
Executive
(Retired)
Steve
South
President
and
CEO,
EDCO
Disposal
Steven
Stone
Broker
Associate
&
Relocation
Specialist,
Berkshire
and
Hathaway
Neil
Tarzy,
MD
Physician,
Family
Practice
Joe
Terzi
President
and
CEO,
San
Diego
Tourism
Authority
James
Seifert
San
Diego
Gas
and
Electric/
Consultant
(Semi-Retired)

ENDOWMENT

CAMPAIGN

FEASIBILITY
STUDY
30 of
36 PAGE

4.3 October 4, 2022, Item #5
City of Poway -Poway Center for the Performing Arts
Endowment Campaign Feasibility Study
Study Advisory Task Force
Cynthia Elizondo, Chair
Realtor
Halcyon Real Estate Services
Abby Barretto
Community Relationship Advocate
Craig Brown
Community Member
Ginger Couvrette
Board Trustee
Poway Unified School District
Dave Grosch
Council member
City of Poway
Sue Herndon
Retired
Community Activist
Dan Krall
Retired,
Financial Professional
Barry Leonard
Councilmember
City of Poway
Rachel McCarthy Henneforth
President
McCarthy Family Foundation

ENDOWMENT CAMPAIGN FEASIBILITY STUDY
31 of 36
Jim Reid
Vice President, Board of Directors
Poway Symphony Orchestra Foundation
Kevin McNamara
Managing Partner
The Farm in Poway
Staff
Audrey Denham
Community Services Director
City of Poway
Chris Hazeltine
City Manager
City of Poway
Wendy Kaserman
Assistant City Manager
City of Poway
Belinda Romero
Recreation Area Manager
Poway Center for the Performing Arts
City of Poway
PAGE 4.4
October 4, 2022, Item #5

EXECUTIVE

SUMMARY
The
power
of
the
performing
arts
to
create
a sense
of
shared
community
is
evident
in
Poway.

Since
1990,
the
Poway
Center
for
the
Performing
Arts
PCPA-has
been
the
regional
home
for drama,
comedy,
music,
and
dance.

Its
stage
is
shared
by
professional
performers,
community-based
productions,
and
arts
education
programming
that
bring
thousands
of
residents
and
visitors
of
all
ages
together
each
year.

Last
year,
the
City
of
Poway
reaffirmed
its
commitment
to
ensuring
the
PCPA's
future
as
the
heart
and
soul
of
our
community.

As
part
of
a broader
plan
to
create
a sustainable
operating
model
for
the
PCPA,
the
City
is
proposing
a
campaign
to
establish
a
$9.5
million
Poway
Center
for
the
Performing
Arts
Endowment
Fund.

The
McCarthy
Family
Foundation
has
pledged
$1
million
to
seed
the
Endowment
Fund
and
is
funding
a
campaign
feasibility
study.

Power
of
the
Performing
Arts
A
half
hour
from
downtown
San
Diego
,
Poway
prides
itself
on
being
"The
City
in
the
Country.
" Families
are
attracted
to
our
award-winning
schools,
miles
of
parks
and
open
space,
and
safe
neighborhoods,
while
professionals
appreciate
an
easy
commute
and
high
standard
of
living
.

Yet
it is
the
power
of
the
performing
arts
that
knits
a community
together
and
improves
quality
of
life
. Theatre,
music,
and
dance
inspire
creativity
and
self
expression
. Exposure
to
the
arts
is
proven
to
boost
academic
performance
as
well
as
health
outcomes.

The
arts
create
shared
experiences
for
people
with
diverse
backgrounds,
fostering
empathy
and
appreciation
of different
perspectives
and
strengthening
bonds
between
neighbors
. Moreover
, civic
and
cultural
vitality
is
a key
driver
in
a community
's
economic
strength
and
makes
our
region
a more
desirable
place
to
live
.

Our
civic
leaders
recognized
the
countless
benefits
that
the
arts
play
when
they
built
the
Poway
Center
for
the
Performing
Arts
30 years
ago
.

October 4, 2022, Item #5
2021·22 REGIONAL PRESENTERS
American Chinese Culture and Education Foundation
California Ballet/Ballet Foundation of San Diego
Coastal Communities Concert Band
Danclnspiration
Dance & Company
Gujarati Association of San Diego
Metropolitan Educational Theatre (MET2)
Ms. Debbora's Dance
Music and Theatre Troupe
New West Ballet
Poway Symphony Orchestra
Ramona Julian Dance
San Elijo Dance & Music
Scripps Theatre Arts
Step by Step
SoCalDance
Southern California Ballet
The Heart and Soul of Poway
Today, the Poway Center for the Performing Arts enlightens and enriches the community as a venue for world-class
entertainment and cultural events and as a place for inspiring and nurturing the next generation of artists. An architectural gem, the 809-seat theatre was designed to accommodate a diverse blend of professional, educational, and community programming. The City partners with three major user groups:

1. Poway OnStage is a nonprofit organization that stages a professional performance series of unique, one-night-only shows ranging from jazz concerts and Irish dance troupes to magicians and musical theatre. Poway OnStage also
offers an Arts in Education program that give local youth a platform to cultivate critical thinking, teamwork, and creative and social skills, while introducing them to the world of theatre, dance, and music.

2. Poway Unified School District showcases student theatrical, choir, and instrumental performances as well as
community forums and lectures in the PCPA. Located on
the Poway High School campus, the PCPA is also available to students for daytime rehearsals and class events.

3. Regional community groups such as Poway Symphony
Orchestra and Southern California Ballet as well as visiting presenters stage more than 100 concerts, performances,
and recitals at the PCPA each year. Community groups
include nonprofits, schools, and businesses.

As the PCPA's owner and operator, the City is committed to maintaining the highest standards of quality and public access. This starts in advance of each season when Performing Arts Center Division staff partners with user groups to plan a diverse event calendar. Our staff manage professional technical, box office, and front-of-house services and the volunteer usher program ensures audiences have a memorable experience for every performance. And facility maintenance and capital replacement protect the value of the state-of-the art venue as a community point of pride.

October 4, 2022, Item #5
A Sustainable
Future
The
City
of
Poway
is
committed
to
managing
the
PCPA
efficiently,
allocating
direct
funding
annually
to
the
PCPA's
staffing,
general
operations,
and
facility
and
equipment
maintenance.

At
the
same
time,
the
City
ensures
that
quality
arts
experiences
remain
accessible
to
the
entire
community
by
providing
subsidized
fees
of
varying
levels
to
all
user
groups.

In
the
current
fiscal
year,
PCPA
annual
operating
expenses
are
$1,365,000,
which
is
partially
offset
by
$415,000
in
revenue
from
facility
user
fees.

Revenues
from
facility
rentals,
event
service
fees,
and
user
agreement
cost
sharing
do
not
cover
the
growing
annual
operating
deficit,
which
now
totals
approximately
$950,000.

Simply
making
up
the
deficit
by
increasing
rental
fees
will
leave
too
many
arts
organizations
without
a performance
home.

Most
performing
arts
centers
require
a combination
of
earned
and
contributed
income
to
balance
their
budgets,
and
public
support
of
these
venues
is
often
supplemented
by
fundraising
efforts
to
secure
private
and
corporate
donations
to
fund
operations.

The
City
is
building
a
comprehensive
approach,
including
an
endowment,
to
create
a sustainable
operating
model
for
the
PCPA.

To
maximize
earned
income
streams,
Poway
City
staff
are
looking
into
realigning
terms
of
user
agreements, subsidy
allocations,
and
facility
rental
fee
schedules,
evaluating
management
efficiency
for
cost
control,
and
maximizing
use
of
the
venue
year
round
. At
the
same
time,
the
City
and
the
McCarthy
Family
Foundation
authorized
a feasibility
study
to
explore
fundraising
potential
for
the
PCPA.
34 of
36 DID
YOU
KNOW?
•
The
City
of
Poway
has
never
before
pursued
fundraising
on
behalf
of
the
Poway
Center
for
the
Performing
Arts.
•
Poway
OnStage,
previously
known
as
the
PCPA
Foundation,
is
a
separate
nonprofit
organization
that
brings
professional
performances
to
the
PCPA
stage.
•
AU
PCPA
nonprofit
user
groups
will
continue
to
fundraise
independently
to
support
their
own
operations
and
programming.
•
The
proposed
endowment
will
specifically
support
the
costs
of
running
the
PCPA
in
order
to
keep
its
use
affordable
and
accessible
to
community
users.

October 4, 2022, Item #5
Proposed
Endowment
Campaign
City
leaders
are
planning
to
establish
an
Endowment
Fund
that
will
provide
a
perpetual
base
of
financial
support
for
the
PCPA.

With
an
initial
goal
of
reducing
the
annual
subsidy
by
50%,
the
City
aims
to
build
a $9
.5 million
Endowment
Fund
through
private
philanthropy.

With
a
corpus
of
$9.5
million
and
a conservative
5%
annual
rate
of
return,
the
Endowment
Fund
will
generate
$475,000
annually.

The
feasibility
study
and
fundraising
campaign
will
engage
community
and
business
leaders
as
well
as
city
councilmembers
and
staff
to
lead
these
efforts.

Moreover,
the
City
plans
to
partner
with
a community
foundation
to
accept
charitable
donations
and
to
manage
the
Endowment
Fund's
investments.

The
proposed
Endowment
Campaign
will
engage
residents
of
Poway
and
beyond-arts
patrons
and
parents,
regional
corporations
and
local
business
owners,
civic
leaders,
and
foundations-to
support
the
Endowment
Fund
through
outright
gifts
and
pledges
as
well
as
planned
or
deferred
gifts
. Every
dollar
contributed
to
the
Endowment
Fund
will
support
the
Poway
Center
for
the
Performing
Arts
in
perpetuity.

In
an
early
show
of
support,
The
McCarthy
Family
Foundation
has
pledged
$1
million
to
seed
the
Endowment
Fund
and
is
funding
the
feasibility
study
.

Thirty
years
ago,
the
City
of
Poway
invested
in
creating
a vibrant
hub
for
arts
and
culture-the
Poway
Center
for
the
Performing
Arts.

The
generosity
of
the
community
today
will
ensure
that
the
PCPA
continues
to
advance
the
arts
in
Poway
and
nurture
its
civic
heart
and
soul.

October 4, 2022, Item #5
City
of
Poway
-
Poway
Center
for
the
Performing
Arts
Proposed
Endowment
Campaign
Chart
of
Gifts
to
Achieve
$9,500,000
Goal
Gifts
can
be
paid
over
a three
to
five
year
pledge
period
#
of
Gifts
1 1 2 5 15 22 25 45 Many
I
In
the
Range
of
$2,000,000
and
greater
1,000,000
-
1,999,999
500,000
-
999,999
250,000
-
499,999
100,000
-
249,999
50,000
-
99,999
25,000
-
49,999
10,000
-
24,999
Under
$10,000
Will
Produce
$2,000,000 1,000,000 1,000,000 1,250,000 1,500,000 1,100,000 625,000 450,000 575,000
116
total
gifts
of
$10,000
and
greater
GIFT

PAYMENT

INFORMATION
•
Payments
may
be
made
over
a
period
of
three
to
five
years.
•
Payments
may
be
made
via:
t
Cash
or
Check
•
Debit
or
Credit
Card
t
Appreciated
Securities
(including
mutual
funds)
t
Donor
Advised
Funds
(DAF)
Cumulative
Total
$2,000,000 3,000,000 4,000,000 5,250,000 6,750,000 7,850,000 8,475,000 8,925,000 9,500,000 IRA
Mandatory
Distribution
or Rollove
r at
72 years
of
age
•
Planned
or
Deferred
Gifts
t
Real
Estate
•
Gifts
are
tax
deductible
to
the
full
extent
of
federal
&
state
laws
.

ENDOWMENT
CAMP
A
IG
N

FEASIBILITY
STUDY
36 of
36 %
of
Total

21.1% 31.6% 42.1% 55.3% 71.1%
·

82.6% 89.2% 93.9% 100%
PAGE

4.9

Poway City CouncilOctober 4, 2022

Poway City Council
October 4, 2022