Winter 2012 - Ensuring the Future of Dance - San Francisco Ballet

WINTER 2012
SPRING 2007
SAN FRANCISCO BALLET ENDOWMENT
ENSURING THE FUTURE OF DANCE
Legacy News
San Francisco Ballet Tina in LeBlanc Wheeldon’s in Tomasson/Possokhov’s Number Nine. (© Erik Don Tomasson) Quixote. (© Erik Tomasson)
2005 Don Ouixote
Helgi Tomasson

San Francisco Ballet in Tomasson’s Romeo & Juliet (© Erik Tomasson)
San Francisco Ballet Endowment Report
The San Francisco Ballet Endowment Foundation was
established in 1980 upon receipt of two gifts totaling just
under $30,000 and restricted for scholarships at the San
Francisco Ballet School. The Foundation received $1.2
million from an estate over the following two years and
in 1981 made its first distribution to the San Francisco
Ballet Association: $50,000, which represented almost
one percent of the Association’s operating budget of
$5.4 million. Since then, strong investment returns and
contributions, primarily from estates and from donors
to the Preserving a San Francisco Jewel Campaign and
Performing at the Pinnacle Campaign, have grown the
Foundation’s assets significantly and increased the
importance of the endowment to the Ballet’s revenue
stream.
The Foundation is incorporated as a separate nonprofit
public benefit corporation for the purpose of holding
and managing endowment funds for the benefit of the
San Francisco Ballet Association. It seeks to provide the
Ballet with a reliable source of support while protecting
its investments against inflation and wide swings in the
capital markets. A Board of Directors provides oversight
of the Foundation’s assets, which are managed by
professional managers or held in direct mutual funds.
The Directors are advised by Hall Capital Partners on the
Foundation’s investment strategies, manager selection,
and long-range planning.
Investment Performance
The Foundation relies on a total return strategy in which
investment returns are achieved through both capital
appreciation (realized and unrealized) and current
yield (interest and dividends). The Foundation targets
a diversified asset allocation that places emphasis on
investments in equities, fixed income, and alternative
investment strategies in a 40-20-40 percent ratio to
achieve its long-term rate-of-return objectives within
prudent risk constraints. The Foundation’s investments
continued to rebound with the market, increasing by 11
percent in FY2011. Below is a summary review of the
investment performance for FY11.
(in thousands)
Opening balance as of July 1, 2010 $77,933
Gifts and Pledge Payments to
Endowment Foundation in FY2011 1,731
Investment Returns/Reinvested Gains 12,255
Transfer to San Francisco Ballet Association (4,075)
Reclassification of Unrestricted Artist Reserve
Fund Assets to Association* (456)
Administrative Expenses, including Investment
Management Fees (495)
Closing balance as of June 30, 2011 $86,893
*The Artist Reserve Fund (ARF) provides grants to assist current and
former Company members with educational costs and thus helps ensure
a smooth transition from life as a professional dancer. Most assets in
the ARF have been contributed by SF Ballet and by donated services
by the Company and have, prior to FY2011, been invested alongside
assets designated to the endowment. The ARF’s assets, which are not
designated for the endowment, are now invested by the Association.
Donations to the endowment to support the ARF remain invested within
the Foundation and will continue to support dancers.

The asset allocation of the endowment changed slightly
during the fiscal year in order to minimize risk and further
diversify the portfolio, as noted in the following table.
Alternative assets include limited partnership investments
in hedge funds. Global equity includes funds that are
invested in both domestic and foreign assets. The Ballet’s
investment performance was comparable to that of
benchmark indices.
Beginning of FY2011 End of FY2011
Real Assets 0% 2.4%
Alternative Assets 33.2% 30.8%
Equity – Foreign 12.2% 13.9%
Equity – Domestic 15.7% 17.1%
Equity – Global 12.4% 9.6%
Fixed Income 23.7% 22.6%
Balanced (Equity
and Fixed Income) 1.2% 1.3%
Cash and
Equivalents 1.5% 2.3%
The remainder of the assets is from gifts that were
designated to support specific needs of SF Ballet; each
year the transfer from those gifts is applied only for the use
stipulated by the donor.
New Productions and
Artistic Innovation
28.7%
SF Ballet Orchestra
and Music
.2%
Touring
6.7%
SF Ballet School
7.9%
FY2011 Transfer
Center for Dance
Education
2.5%
Company and Artistic
Excellence
.1%
Undesignated and
Miscellaneous
53.9%
Impact of Endowment on SF Ballet Association
Each spring, the Foundation transfers to the Association
an amount equal to five percent of the average value of the
endowment as determined on March 31 of the previous three
years. Because annual investment performance varies from
year to year, using a multi-year average helps to minimize
fluctuations in the amount transferred to the Association. In
FY2011, the transfer of nearly $4.1 million represented 9.8
percent of the Association’s overall income.
Assets transferred to the Association support a variety of
SF Ballet needs in accordance with the instructions placed
on each endowment gift by the donor. Approximately
half of the Foundation’s assets are from gifts that were
left undesignated by the donor, thus allowing the annual
transfer to be used where most needed by SF Ballet.
Budget of SF Ballet Association
The charts on the following page show the Association’s
sources of revenue and corresponding expenses during
FY2011. The interest rate swap (shown as an expense)
is used by the Ballet to limit its exposure to fluctuations
in interest rates paid on debt service from its tax-exempt
bond issuances.
The past three years have been challenging financially for
San Francisco Ballet Association, as they have been for
everyone. With the generous support of our community,
we have been able to financially stabilize the Association
while sustaining our position as one of the world’s leading
ballet companies. In FY2011 SF Ballet Association had an
operating change in unrestricted net assets of approximately
$660,000, exclusive of depreciation and debt service.
Value of Endowment Foundation Assets by Month
$100
$95
In Millions
$90
$85
$80
$75
$70
Jul ‘10
Aug ‘10
Sep ‘10
Oct ‘10
Nov ‘10
Dec ‘10
Jan ‘11
Feb ‘11
Mar ‘11
Apr ‘11
May ‘11
Jun ‘11
Market Value at the End of the Month

FY 2011 Expenses
FY 2011 Income
Company &
Ballet Productions
61.5%
Touring Expenses
1.2%
Center for Dance
Education
1.2%
School &
Student Housing
7.6%
Ticket Revenue
42.9%
Contributed
Revenue
39.7%
Interest Rate
Swap
0.2%
Debt Service
4.5%
Administration
& Support
23.8%
Transfer from
Endowment
9.8%
Miscellaneous
Touring Revenue
2.0%
.7%
School & Student
Housing Fees
4.8%
FY2012 UPDATE
In fall 2011, SF Ballet was engaged at the Segerstrom
Center for the Arts in Orange County as part of the
Center’s special 25th Anniversary Season celebration.
The Company performed two programs including a mixedrepertory
program featuring Wayne McGregor’s Chroma,
Choreographer in Residence Yuri Posskhov’s RAkU, and
Symphony in C by George Balanchine as well as Artistic
Director & Principal Choreographer Helgi Tomasson’s fulllength
production of Romeo & Juliet.
Ticket sales continue to rebound with the improving economy.
At the end of November, we were $267,732 ahead of the
same time last season in overall sales; Nutcracker sales were
up $165,405 and repertory revenue was up $102,327. We
are currently on track with the annual fund goal.
SF Ballet’s critically acclaimed full-length production of
The Little Mermaid by John Neumeier was recorded during
the 2011 season for future television broadcast and DVD
release. It’s initial United States air date was on PBS’s
Great Performances in December 2011. The film has
already been shown on NHK, the Japanese broadcaster,
NDR/ARTE in Germany and is scheduled for broadcast
throughout Europe and Asia in 2012.
The Board of Trustees completed a rigorous long-range
planning process last year. Implementation of new plans and
policies that have been set forth by the new five-year plan
are underway. The document outlines the Ballet’s strategic
plan for fiscal years 2012 through 2016, with a primary
focus on the balance of creativity with sustainability and
sound fiscal management.
A complete set of audited consolidated financial statements
of the SF Ballet Association and Endowment Foundation
for FY2011 can be found on the Ballet’s website at
www.sfballet.org/about/annual_audit.
Sarah Van Patten
in Tomasson’s The
Fifth Season (©
Erik Tomasson)

From the Planned Giving Desk
© Chris Hardy
Elizabeth Lani,
Planned Giving Manager
Having been with the Ballet for just
over three years in the role of major
gifts officer, I have been touched
by the passion and commitment
of San Francisco Ballet patrons.
It is inspiring to work with this
wonderful group of people who
are so devoted to the art form—
subscribers, donors, and legacy benefactors who share
the joy of dance. A world class company such as SF Ballet
would not be at the height of artistic accomplishment and
acclaim that it enjoys today without the long-term loyalty
and enthusiasm of such incredible supporters.
It is my great pleasure to continue working with this
dedicated group of patrons in my new role as SF Ballet’s
planned giving manager. (Allison Groves, who served in
the position for over a decade, is continuing at SF Ballet
as development and campaign operations manager.) I am
excited for the chance to work with members of the Legacy
Circle—forward thinking people whose plans ensure a
solid future for the Ballet. The Legacy Circle is SF Ballet’s
opportunity to show its appreciation to patrons who include
gift provisions for the institution in their estate planning.
Most estate gifts are received after a person has passed
away, so the Legacy Circle offers a way to say “thank you”
now. We offer an annual luncheon to celebrate the group
and invite members to exclusive “behind the scenes” events
such as rehearsals.
You do not need to share the details of your gift plans to
join the Legacy Circle. The Ballet does not ask for any
paperwork, as we recognize that most people want their
plans to remain private. Nor is there a minimum gift amount
required to participate. Gifts of all sizes are welcome and
play an important role in the strength of the Ballet. And
depending on your personal interest, you may designate it
for San Francisco Ballet’s general purposes or to support
a particular need such as new works, the Ballet School,
touring, or community education and outreach programs.
If you have included a gift to SF Ballet in your plans, please
let me know! I would be grateful for the chance to thank
you. And if you have not yet included SF Ballet in your
plans, please consider it. I would be honored to discuss the
various options with you and help determine how a gift can
fulfill your personal and philanthropic goals while building
the future of dance. I welcome inquiries at 415.865.6623
or elani@sfballet.org.
Sarah Van Patten and Tiit Helimets in Balanchine’s The Four Temperaments
(Choreography by George Balanchine © The Balanchine Trust; Photo © Chris Hardy)
Board of Directors of the San Francisco Ballet Endowment Foundation
James D. Marver,
President
John S. Osterweis,
President Emeritus
Hank J. Holland,
Vice President
Thomas E. Horn,
Treasurer
Kim Ondreck Carim*,
Chief Financial Officer
Jennifer French Kovacevich*,
Secretary
Elizabeth Lani*,
Assistant Secretary
Richard C. Barker
Susan S. Briggs
J. Stuart Francis
Chris Hellman
George B. James
Carole Obley
Robert M. Smelick
Patricia A. TeRoller
(1935-2011)
* Non-Director

New President of the SF Ballet
Endowment Foundation: Jim Marver
What first got you interested in
ballet?
I was originally exposed to dance
and ballet in college in England. I
fell in love with the art form—the
gracefulness, the athleticism, and
the music. Later, while attending
graduate school at UC Berkeley, I
signed up with San Francisco Ballet
as a volunteer usher. As a student,
it was the only way I could afford to attend performances.
It was amazing. I got to see everything.
What made you decide to join the Legacy Circle?
The more I became involved with fundraising—as co-chair
of the Performing at the Pinnacle Capital Campaign and as
chair of the Development Committee—and the more I gave
personally and financially to both, the more I understood
the needs of the organization. This just naturally leads one
to think about the legacy one wants to leave. Ultimately,
you want to do what you can to help the institutions that
you believe in and that you want to thrive. For me, it was an
easy and natural decision to join the Legacy Circle.
What are the objectives of the San Francisco Endowment
Foundation, and how did the economic downturn affect
the endowment?
The Endowment Foundation was established in 1980 as a
separate charitable organization for the purpose of holding
and managing endowment funds for the benefit of the San
Francisco Ballet Association.
We take a long-term view of the Ballet, the economy, and
the stock market. Many of our investments are illiquid
which allows the portfolio managers to invest in assets that
will grow over time and have a better chance of weathering
short-term market fluctuations. As for all investors, the
depressed stock market has had an impact, but our
substantial diversification has tempered it. We don’t believe
that the current state of the market will have long-term
deleterious effects.
How does the Endowment Foundation Board work
with Hall Capital Management on making investment
decisions?
We have had the good fortune of working with Hall for
six years. We receive very senior attention and have the
benefit of their excellent research on many investment
instruments, including alternative investments. Based
on our current and future cash needs and expectations
of inflows, Hall recommends ranges of asset allocations.
The Endowment Foundation Board takes that input and
determines target allocations. Within these allocations, the
Endowment Foundation Board outlines specific goals and
then works with Hall Capital to decide which investments
to pursue. Ultimately it is the board’s decision as to which
investments to make.
On taking the helm as President of the San Francisco
Endowment Foundation:
After 17 years on the SF Ballet Association Board and 14
years on the Endowment Foundation Board, my transition
to President feels pretty natural. However, following in the
footsteps of John Osterweis and his incredible stewardship
of the Endowment Foundation over the past many years is
daunting. I’m sincerely flattered to have this opportunity to
serve the Endowment Foundation and the Association.
Leadership Transition: John Osterweis Becomes
the New Chair of the SF Ballet Association Board
of Trustees
After serving nearly 25 years as president of the
Endowment Foundation Board, John Osterweis was
recently elected chair of the SF Ballet Association Board
for fiscal years 2012-2014. During his tenure as president
of the Endowment Foundation Board, the endowment
has grown through estate gifts, fundraising and strong
investment performance. We are extremely grateful to
John for his exceptional leadership and dedication to the
Ballet. In recognition of his service with the Endowment
Foundation, the Board of Directors elected John President
Emeritus.
Sofiane Sylve and Vito Mazzeo in Balanchine’s Symphony In C (© Erik Tomasson)

Patricia A. TeRoller 1935-2011
Patricia TeRoller, whose life-long support of San Francisco
Ballet left an indelible legacy on the institution, died in
September at the age of 75. Known to everyone as ‘Pat,’
she studied at the SF Ballet School and danced with the
Company as a young woman, performing many featured
roles. She would go on to be a member of the SF Ballet
Association board for 38 years as well as a member of the
SF Ballet Endowment Foundation board, serving as board
secretary for over 30 years.
“Pat was truly devoted to the Ballet and remained a
steady and hard-working presence through the years,”
says Artistic Director & Principal Choreographer Helgi
Tomasson. She was eager to roll up her sleeves and do
whatever was needed. During the early days of limited staff
and funding, she would help out by processing gifts and
stuffing envelopes. More recently, she served as chair of
the Legacy Circle and regularly visited SF Ballet’s home,
the Chris Hellman Center for Dance, to work with staff
on Legacy Circle events and to watch the Company in
rehearsal. Like others deeply involved in the institution’s
history, she constantly marveled at the incredible heights
to which the Company has soared under Helgi Tomasson’s
leadership and artistic vision.
But Pat’s primary focus was on the School, and it was
during her tenure as chair of the School Committee that
the School secured a residence for students. It was an
achievement of which she had dreamed for years. Once
Jim Herbert (then Board chair) negotiated the acquisition
of the residence, Pat led the effort to obtain and arrange
furnishings for 16 bedrooms and common areas to create
a comfortable home, ultimately hosting a barbeque to
welcome the first group of residents in 2003. Tomasson
notes that “Pat always believed a residence was needed in
order to attract the highest quality dancers to the School.
She was instrumental in preparing it for students and
dedicated to its success. It has been of tremendous value
to the institution.” Many students who have lived there
are now members of the Company or have joined other
professional ballet companies.
In addition to her love for dance, Pat pursued her other
passion of sailing, having raced and cruised boats for many
years with her late husband and former SF Ballet Guild
President Derk TeRoller. She held the distinction of being
named the first woman Port Captain at the San Francisco
Yacht Club. In 1988 she was voted Yachtswoman of the
Year and served as the Club’s first female Board Secretary.
Recalling Pat’s exceptional service to SF Ballet, John
Osterweis, chair of the SF Ballet Association Board and
president emeritus of the Endowment Foundation, says “I
have known Pat and worked with her on the Ballet board for
25 years. She was a quiet force within the Ballet and had
an instinct about what needed to be done, what we needed
to do to keep things going. She did so much personally for
the Company and the School. She will be dearly missed.”
Earlier this year, the executive committee of the SF
Ballet board began the process to nominate Pat for the
Lew Christensen Medal—SF Ballet’s highest honor—in
recognition of her generosity, service, and leadership. Sadly,
Pat’s unexpected death occurred only days before the
committee met and confirmed her nomination. The full board
voted to bestow the medal on her at its September meeting.
Pat’s dedication to SF Ballet will endure long into the
future: Her estate plans include a gift to the SF Ballet
Endowment Foundation to create the TeRoller Fund for
New Productions. The TeRoller Fund will provide ongoing
support to help grow the Company’s repertory and ensure
that SF Ballet can maintain its commitment to expanding
the art form for years to come. This year, the fund will
support the world premiere by Choreographer-in-Residence
Yuri Possokhov.
Vanessa Zahorian and Joan Boada in Tomasson’s Trio (© Erik Tomasson)

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Yuan Yuan Tan in Possokhov’s RAkU. (© Erik Tomasson)
WHAT’S INSIDE
San Francisco Ballet Endowment
Foundation Annual Report