2004 was a very good year.

The year was filled by intensive work within our core functions: total new monies received were $4.7 million, with 33 new funds established and 18 people notifying us that we were included in their estate plans. In 2004 we inaugurated a 4% spending policy for grantmaking, challenging our grantmakers, especially the scholarship administrators, to be even more resourceful and relational. And, the Investment Committee worked carefully to target the Foundation's investment allocation and choices to achieve a rate of return that supports our spending level while building our funds. Our asset level is now $92.1 million!

In addition to the core work of our Committees and staff, special task forces involving Board or staff worked on the Strategic Plan, Investment Best Practices, a Donor Impact Model for donor advised funds, African-American philanthropy, what's next for LEAD and the lessons learned from LEAD 2005, the YAC survey of youth needs, reorganizing the Family Coordinating Council into the Community Coordinating Council with a new director, and several leadership/grantmaking efforts including the beginning work toward increased government cooperation. The special work toward building a vibrant downtown went on all year long on many levels and involving a variety of people, including very importantly, the FCPA Committee, staff and volunteers whose special work last year accomplished the renovation of the third floor Hilt Building, a successful 1 st annual BBQ Fest and 2 nd annual Mayors Gala.

1 - ASSET DEVELOPMENT/DONOR DEVELOPMENT

•  The Foundation investment portfolio total return for 2004 was +11.2%

(+25.6% in 2003, -13.5% in 2002, -6.6% in 2001, -1.5% in 2000)

•  During 2004 gifts were received totaling $4,546,012, compared with $4,098,344 in 2003 . This, however, does not tell the whole story. Two life income arrangements (Charitable Gift Annuities) were created and we received $219,132 in grants for total new monies of $4,765,144. At the end of 2004 , a ssets were at $ 92.1 million. Assets in 2003 were $83.8 million, 2002 were $70.1 million , in 2001 were $79.6 million, in 2000 were $86.7 million and 1999 $87.4 million  

•  Expectancies include 18 notifications with 5 maturing for a total of $1,032,842.

124 people were memorialized with gifts. There were 28 Honorary gifts

•  Received 3,879 individual gifts from 2,304 donors. 694 new donors made their first gift to the Foundation in 2004 totaling $878,602, compared to $458,321 in 2003  

•  33 new named funds were established in 2004 bringing the total to 742 Funds to date!

•  18 new Ambassadors joined us during 2004. Approximately 130 attended the annual Ambassadors' fall dinner in the ballroom at the Muskegon Country Club with James B. Singerling, DEO, Club Manager's Association of America as the guest speaker. The Dinner this year was sponsored by " National City Bank"

•  Hosted annual Organization Endowment Breakfast meeting on March 23 with over 40 in attendance representing some of the major community agencies and organizations •  Hosted the "Smart Women - Smart Planners" Pamela Davidson Seminar on June 16 th at the Michigan Alternative and Renewable Energy Center for over 50 guests. This seminar was sponsored by " UBS Financial Services"

•  Hosted the "Gift Planning Seminar" delivered by Pamela Davidson June 16 th at the Michigan Alternative and Renewable Energy Center (MAREC) for over 50 financial and estate planning advisors. This seminar was sponsored by "Chaddock, Winter and Alberts Insurance Agency"

•  Hosted the Annual Lunch in June with almost 300 in attendance. This year the Annual Lunch was co-sponsored by the Muskegon Chronicle and RC Productions

•  On December 2 nd held a donor reception for about 80 guests on the stage of the Frauenthal stage to brief them on downtown re-development efforts. Chris was joined by Cindy Larsen the President of the Muskegon Area Chamber of Commerce

•  Participated in the Council of Michigan Foundation (CMF) Project Team-Up initiative. In 2004 we continued to work with the community foundations from Grand Rapids , Fremont , Holland/Zeeland, Grand Haven and Greenville under a grant from CMF to collaborate in marketing and promoting the work of community foundations and to advance our brand. Our efforts resulted in joint marketing using the local national public radio stations and print media

•  Team-Up jointly brought Pamela Davidson to west Michigan to provide 10 workshops for donors and advisors in June

•  On November 11 th the Team-Up six foundations hosted more than 250 community leaders at the Meijer Gardens in Grand Rapids to learn about regional development issues from Bill Rustem, President of Public Sector Consultants. The six Foundations also announced a regional challenge grant opportunity for up to $200,000 to assist the West Michigan Trails and Greenways Coalition in completing the 510 mile West Michigan trails and greenways system

•  Continued participating in the Communities of Color grant initiative, another CMF Team-Up effort. Under this initiative we joined community foundations from Albion, Battle Creek , Flint , Grand Rapids and Kalamazoo . The purpose is to leverage the knowledge, experience and resources of our foundations to expand and diversify our donor bases

•  We have used the Communities of Color grant to develop print marketing materials and placement of ads in local newspapers. The grant was used to sponsor events which highlighted the contributions of African American donors and philanthropists in our communities

•  In December a group of community leaders re-established the African American Celebration Fund. This Fund will support programs and projects in the Muskegon region that provide financial support for programs, activities or events which contribute to a better appreciation for, and understanding of, African American heritage and culture. We used the Communities of Color grant to develop marketing materials to promote giving to this Fund

•  The Employee Fund ended 2004 with a Fund balance of $22,005 . Established in 1997 with four employees and zero balance, eight participating employees add more than $1,100 annually to the Fund through payroll deduction. During 2004, the Fund paid for the design and painting of a mural on the wall in the Frauenthal building airshaft that improved a longstanding eye-sore

2 - GRANTMAKING

•  During 2004, a total of $3,401,060 in grants were approved to support a wide variety of community needs and worthy projects in the Muskegon region

•  803 grants were approved in 2004 (675 grants were approved in 2003)

•  926 grants were processed by the Community Foundation in 2004

•  153 grants were denied in 2004

3 - MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY (MSHDA)

•  For the fourth year in a row, the Foundation received a $150,000 MSHDA Economic Development grant to support economic development activities in economically distressed areas of Muskegon . Grants included the following:

•  Downtown Muskegon Development Co. - $30,000 - to support the re-development and marketing of the former Mall property

•  Muskegon Area First - $100,000 (over two-years) - to support downtown re-development efforts

•  Muskegon Family Care - $50,000 - to support construction of the new Muskegon Heights Family Care Clinic

•  365 applications received and processed (375 in 2003)

•  158 high school seniors interviewed over 3 evenings by 61 community volunteers

•  478 students awarded scholarships , including renewals (488 awarded in 2003). This represents commitments over the next four years of $796,100 ($813,270 in 2003)

•  The retention rate for 4 year scholarship awards is 87%. (Of the 55

4-year awards made in 2002, 48 are still active for the 2005/06 school year)

•  The Youth Advisory Council (YAC) approved $58,537 in grants in 2004, increasing the total grants made by this program since inception to nearly $900,000

•  YAC Fund assets grew to $1,634,701 at the end of 2004

•  The Youth Advisory Council awarded a total of $11,500 in Teacher Mini-Grants to Muskegon Area Teachers . This program continues to provide support for Muskegon classroom teachers by funding special projects, programs and classroom enhancements

6 - AFFILIATES

•  Community Foundation for Mason County ( CFMA) has been an affiliate since 1996. In 2004 CFMA:

•  Distributed 69 grants for a total of $258,812 back to the community

•  Received $245,628 in gifts and grants

•  67 people were memorialized with gifts to the Foundation

•  Created 3 new named funds for a total of 66 funds in their Foundation

•  Total assets as of 12/31/04: $3,290,207

•  Reports to the Community mailed to more than 1000 individuals

•  Year-end letter mailed generating $57,090 in gifts

•  Community Foundation for Oceana County ( CFOC ) has been an affiliate since 1989. In 2004 CFOC: •  Distributed 65 grants for a total of $68,361 back to the community

•  Received $129,915 in gifts and grants

•  3 people were memorialized with gifts to the Foundation

•  Created 3 new named funds for a total of 36 funds in their Foundation

•  Total assets as of 12/31/04: $2,581,948

•  Articles to area newspapers highlighting Foundation activities, etc.

•  Annual Report included in a full page ad in Oceana's Herald-Journal

•  Year-end letter mailed to 700 people generating $43,545 in gifts

•  MSHDA Challenge Grant - Homelessness Prevention

PAUL C. JOHNSON FOUNDATION (Supporting Organization)

•  The Paul C. Johnson Foundation continued to provide important leadership and financial support for the re-development of downtown Muskegon and key community projects

•  A portion of the assets of the PCJ Supporting Organization continue to be invested in the Downtown Muskegon Development Corporation (DMDC) as an important time-limited Program Related Investment to support downtown re-development

•  In addition, the Paul C. Johnson Foundation also awarded grants to Hackley Hospital and Hospice of Muskegon/Oceana Counties

•  The most significant news of 2004 has to do with the measurable success of the LEAD 2005 program to date. The following statistics show a significant improvement in both the number of students staying in the Muskegon Public School system and in the successful progress of those students.

•  LEAD 2005 has maintained actively enrolled students over five years at a 23% higher rate than that of the Comparison group (79% vs. 56%)

•  LEAD 2005 has 15% more students on track for graduation (achieved 12 th grade status on time) than the Comparison group (57% vs. 42%)

•  LEAD 2005 has twice as many students as the Comparison group who are enrolled in Alternative Education programs at MTEC (22 vs. 11)

•  The LEAD Partner/Advisory Committee participated in the Access to Democracy Project, and contributed to the Governor's Cherry Commission Report on Higher Education and Economic Growth

•  During 2004, the LEAD Next Steps committee identified the Lessons Learned from LEAD 2005 and created a list of recommendations to be presented to the following groups during 2005:

•  the Muskegon Community

•  Muskegon County School Systems

•  Muskegon Area Intermediate School District

•  Parents of Muskegon County students

•  Colleges and Post-Secondary Institutions

•  COMPASS initiatives resulted in cost savings and efficiencies : oversaw the renovation of the Johnson and Munroe-Bergmann Halls and hallways ; negotiated new maintenance contracts; and improved Front of House operations

•  Offered community driven events including " The Adventures of Tom Sawyer " and " Beauty and the Beast". Also introduced and improved special events including the first annual " BBQ Fest and the Mayor's Charity Gala "

•  Hosted a business and a community open house which provided information about the use of the Center's various space options

•  Developed a new Rental Brochure highlighting space availability and a Development Brochure encouraging giving opportunities to support the FCPA

•  Established and enhanced media partnerships with the Muskegon Chronicle, WGHN, Clear Channel, and Unity Broadcasting

COMMUNITY COORDINATING COUNCIL (CCC)

During 2004, the Foundation continued to provide office space and administrative support for the renamed Community Coordinating Council (CCC) of Muskegon County . The Council provides a forum for 43 human service organizations who deliver a wide range of services to residents of Muskegon County . In addition to hosting monthly meetings of the full Council in the Hilt Building , sub-committees also meet on a variety of topics.

•  Activities and initiatives of the CCC include:

•  Parenting Collaborative - Hero Parties

•  Violence Committee - Bowling for Columbine presentation

•  Risk of Drowning - awareness

•  Children's Action Network - Family Resource Centers

•  2-1-1 information help line

•  Youth Risk Behaviors Survey

•  Homelessness Prevention Challenge Grant

During 2004, The Executive Committee hired a new Coordinator, Jane Drake, completed preliminary planning for refinement of organization structure and initiated discussions on updated core goals and key indicators.

•  The Community Foundation continued its c ommunity leadership role by hosting and facilitating the Muskegon Area Children's Agenda during 2004

•  The Committee met bi-monthly and provided an important discussion forum for children's issues in the community. The Committee continued its focus on providing public policy leadership related to children and family issues. Late in the year, the MACA Committee agreed to provide community leadership for a review of local municipal governance and allocation of community resources

DOWNTOWN LEADERSHIP

  •  The DMDC Project Team was formed to meet weekly in order to move the Downtown work forward

•  Deconstruction of the former Mall was completed!

•  The "Invest in Downtown Muskegon " marketing piece was completed and widely distributed

•  In 2004, a Site Plan for the DMDC former mall property was completed . Building on the work of Imagine Muskegon , the new "vision" includes a traditional main street along Western Avenue (complete with diagonal parking in front of the buildings) and plans for 240 townhouse and loft style residential dwellings to re-establish a vibrant downtown

•  A joint task force of City staff and DMDC Project Team began meeting bi-weekly to create the public infrastructure and financing strategy for the Mall project

•  The City awarded the contract for engineering and surveying the public infrastructure for the Mall project to Fleis and Vandenbrink, using $150,000 in City grant dollars

•  The DMDC established a statement of core values and design principles to guide the development, and created a set of purchase and development terms to guide negotiation with purchasers

•  The Foundation and the Frauenthal provided major leadership, grants, and staff support for Imagine Muskegon , Muskegon Main Street and the Annual Downtown Clean-up day

ENVIRONMENTAL LEADERSHIP

•  The Environmental Endowment Fund grew to $304,285 at the end of calendar year 2004. Efforts continue to build this Fund to a target level of $350,000

•  The Environmental Fund awarded a total of $11,120 in grants to a variety of local and regional environmental projects

•  Foundation staff organized local support for the Urban Centers Task Force of the West Michigan Strategic Alliance . Early in 2005 the task force will release a set of important Planning Principles for West Michigan Urban Centers

•  Provided community leadership in promoting environmental awareness. Provided leadership and support for environmentally oriented graphic arts practices, electronic recycling, printing and distribution of first ever Muskegon County Recycling Guide and completion of a Strategic Plan for the Muskegon County Environmental Coordinating Council

•  Produced 2003 Annual Report with copies distributed to more than 37,500 Muskegon region households as an insert in the Muskegon Chronicle. This new strategy for distribution of the Annual Report has generated many positive comments

•  Published 2 newsletters , highlighting donor news, new funds, highlights of Foundation grantmaking activity - mailed to 6,500 addresses

•  28 articles appeared in area newspapers mentioning CFMC's impact on the community. 38 articles mentioned CFMC in some capacity. 114 articles focused on the Frauenthal and 40 articles mentioned the Frauenthal. There were 82 Advertisement ads and 41 Client Ads for the Frauenthal

•  Ran a Year-End Ad in the Muskegon Chronicle on December 8, 2004 promoting the Foundation and " Thanking the Community" for a year of great support

•  Weekly emailed Gift Law newsletter to approximately 100 Financial Advisors and Estate Planners . The newsletter has a hot link directly to CFMC web page

•  Year-end appeal letters mailed to 5,200 names and 400 advisors generating gifts totaling $68,020

•  The Community Foundation and Frauenthal web sites saw additional improvements in 2004 with enhancements including new links pages and detailed information added to both sites. Additional features including downloadable documents and applications were added to make the web site more interactive

•  Staff continued to provide community leadership and representation in support of the West Michigan Strategic Alliance (WMSA) a broad-based regional effort that continues to develop a long term vision for the lakeshore region including Allegan , Kent , Muskegon , Newaygo and Ottawa Counties . Topics including urban revitalization, metropolitan inter-governmental cooperation and environmental planning are key focus areas of WMSA