Established in 1941, the international non-profit foundation was established when Howard Heinz (son of the founders of the H. J. Heinz Company) bequeathed his residual estate to the Howard Heinz Endowment for philanthropic purposes. His original donation was worth about $5 Million in 1941, but since then has grown into a diversified portfolio of $1.7 Billion. The entire net worth is made up of 288 different investments, overseen by 128 different managers.
The Heinz Endowments focuses its activities primarily on the southwestern Pennsylvania region, addressing many challenges that are shared by communities across the United States. Their funding priorities focus on non-profits that support creativity, learning, and sustainability. The organization has a requirement to distribute 5% of their assets annually, which equates to about $80 million.
About The Heinz Endowments
In 2013, the organization’s Finance & Administration department was in the midst of a watershed moment. Edward Kolano has just joined the endowment as Vice President of Finance & Administration and its Chief Financial Officer. Kolano previously worked for a private equity firm and quickly recognized the endowment’s processes were antiquated; draining their financial and human resources.
The realization came after asking one simple question, “How much cash do we have in our account? The short answer: they didn’t know. The team could produce last month’s bank reconciliation. Or they could wait until the current month’s statement came in the mail; a week after month-end. The organization typically had $25 to $50 million in cash on hand, so getting deeper insights, in a more timely manner, was never prioritized. Kolano was eager to have his team provide a more valued role within the organization. Other critical gaps were:
- No insights into operating cash: Cash management and processing were outsourced, costing the endowment over $300,000 a year in custody fees.
- Antiquated processes: Internal books were kept on a cost basis only. So the team spent multiple days at month’s end reviewing 15 to 20 custody statements and recording all of the transactions.
- A lack of centralization: The team was using multiple systems, endless spreadsheets, and even paper documents to inefficiently run the day-to-day.
Kolano began the process of reviewing tools that could solve all the organization’s challenges while laying a bedrock of operational efficiencies for future growth. He talked to other foundations, organizations, researched other systems and came to the conclusion that Multiview was the best fit.
Michele Sullenger, Controller & Director of Benefits/Payroll, was hired in 2013 to lead the transformation from outdated practices to modern processes. She had used Multiview in her previous role and was excited at the opportunity of starting with a clean slate, “My role from day one, was to implement Multiview and basically redesign the jobs of everyone who worked there”.
The integration of Multiview into the endowment’s operations was broken down into a three-stage process. The first part involved adding every asset into the software. Sullenger says they used Multiview’s business event workflow to process cash and pay operating expenses. This transformed the Treasury assistant’s role went from telling someone else to do what to do, to actually doing it herself.
All paper tracking was eliminated, with all the documents being scanned and kept electronically within Multiview. And the marathon of monthly bank reconciliations became a few minutes each day. “So every day we knew how much money was in our account”, says Sullenger, “ And we could better put that to use in an investment”.
The second phase involved creating a valuation process for the endowment. No one at the organization had gone through this exercise before, so they turned to Multiview’s implementation team to help. They worked directly with Multiview’s team to help create all the correct accounting entries. Seven months into the implementation, they had valued two-thirds of their portfolio, they had moved all the investment cash themselves (amounting to 400 transactions a year at $300 million) and for the first time ever in the endowment’s history, they produced monthly financial statements in-house. They accomplished all this with a staff of three people.
The third phase of onboarding Multiview involved adding another person (derived from all the custody fee savings) who focused on the endowments’ private equity portfolio. Sullenger says this allowed them to become faster and more efficient. They continue to tweak the system today, finding new ways to optimize and streamline things. Recently the team wanted a way to hold all cash duties in one account. Multiview wrote an interface to facilitate this. Sullenger says one of the biggest wins has been producing their own set of GAAP financial statements without any reliance on any third party.
In the five years since working with Multiview, Heinz Endowments says they have gained greater organizational independence. They no longer rely on third parties and house everything within the same system. They are also continuing to work with Multiview on finding new ways to improve the technology; such as cash forecasting, liquidity management, and PRI Tracking. And the ultimate goal of providing more value to the organization has been achieved, “We can answer questions, we can generate our own opinion on performance, and we have a whole new level of insight into our portfolio”, says Sullenger.
To view Michele’s keynote at IMUG 2019, click here.
Founded in 1990, Multiview builds powerful financial and operational management software for companies across a multitude of industries. The organization’s flagship offering, Multiview ERP, is used across client organizations who benefit from the powerful integrated modules combined with sophisticated real-time reporting. Headquartered in Ottawa, Canada, Multiview maintains sales and support operations throughout North America.