Good Lives Here 2016 Annual Report

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Letter from the Trustees

Good Lives Here

Those words capture the essence of the Otto Bremer Trust and the commitment to investing for impact that has been at the core of our work for more than 70 years.

Good Lives Here expresses our view of the region we serve: Minnesota, North Dakota, and western Wisconsin. This is the region that was home to the young German immigrant Otto Bremer and came to represent his land of opportunity. Throughout his life, he was well aware of the challenges faced by individuals and communities in the Upper Midwest as he himself had experienced many. But he believed that combining finance and philanthropy would provide invaluable resources to the region that was his new home.

As Trustees, we appreciate the extraordinary legacy put in place by Otto Bremer. It is our job to see that the Otto Bremer Trust continues investing for impact through our evolving efforts in the region.

Our updated mission statement — investing in people, places, and opportunities in the upper midwest — guides our work.

These investments and their returns take many forms. Through our grants to nonprofit organizations, we look for social returns. Our talented philanthropy team, now organized as dedicated regional resources, works closely with communities to identify needs and opportunities and guide these investments, most often in the form of grants.

Of course, to provide the resources to do this work on a large scale for the long-term we must also pursue investments with purely financial returns. We manage our assets prudently in light of our structure and have been able to grow significantly over time.

It is a third area of investing that gives us opportunities to leverage our impact; we call these hybrid investments. Through these investments we pursue a combination of financial and social returns. Most notably, the Otto Bremer Trust is a bank holding company that owns 92 percent of Bremer Bank, a nearly $12 billion financial institution with operations throughout the three-state region. Bremer Bank plays an important role in community health with committed local employees who provide superior banking services to businesses and individuals in their communities. Our strategic investment in Bremer Bank has resulted in returns that are both financial and social and contribute to a better way of life in the region. We further leverage this approach by making program-related investments in a variety of organizations. This is an expanding focus that is important to support hybrid returns.

While “impact investing” has become a popular term in philanthropy circles, the Otto Bremer Trust has been investing for impact throughout our history, being a responsive, mission-driven organization that has invested more than $600 million in grants and program-related investments to hundreds of organizations throughout the Upper Midwest. We will continue to invest in the region as we always have but now with an expanded commitment to new and dynamic opportunities.

More than 80 years ago during the Great Depression, Otto Bremer invested in small “countryside banks” and the communities where they were located, providing resources to keep them viable. He believed people and communities could survive and flourish if they had access to resources, both financial and social, at critical times. His commitment to helping people and places thrive is the cornerstone of the Otto Bremer Trust’s investment philosophy. Otto recognized then, as we do today, that Good Lives Here.

S. Brian Lipschultz Co-CEO & Trustee

Charlotte S. Johnson Co-CEO & Trustee

Daniel C. Reardon Co-CEO & Trustee

Continuing the Legacy

The Otto Bremer Trust, based in St. Paul, Minnesota, is now one of the nation’s largest charitable trusts. Created in 1944 by banker and community leader Otto Bremer, the Trust was established to perpetuate his life’s work of serving as a financial resource to communities in the Upper Midwest. Otto’s holdings in “countryside banks” have evolved into Bremer Bank, a $12 billion regional financial services company, as well as a portfolio of other investments. From those modest begin­nings, OBT has made over $600 million in grants and pro­gram-related investments to organizations in Minnesota, North Dakota, and western Wisconsin.

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TOTAL ASSETS

$1,027,379,982

TOTAL AMOUNT GIVEN THROUGH GRANTS & PRIs

$47,314,055

ORGANIZATIONS

600+

COMMUNITIES IMPACTED

162

GRANTS AND PRIs

The Otto Bremer Trust’s mission is to invest in people, places, and opportunities in the Upper Midwest. In 2016, more than 600 organizations across the region benefitted from the $47 million in OBT grants and program-related investments.

Below is a regional breakout of where those investments were made. Nearly 70 percent of these awards went to communities in the greater Bremer region; the balance went to organizations in the Twin Cities metropolitan area.

Investments Overview

Twin Cities Metropolitan Area

  • $20,082,917
  • 274 GRANTS AND PRIs

Western North Dakota

  • $2,269,489
  • 36 GRANTS

Red River Region

  • $4,635,555
  • 70 GRANTS AND PRIs

Central and northern minnesota

  • $2,948,884
  • 57 GRANTS

Western and South central minnesota

  • $2,991,456
  • 63 GRANTS

Southeastern Minnesota

  • $2,126,649
  • 33 GRANTS

Western Wisconsin

  • $4,221,590
  • 93 GRANTS AND PRIs

North Dakota statewide

  • $1,123,451
  • 19 GRANTS

Minnesota Statewide

  • $6,914,064
  • 74 GRANTS AND PRIs

Investing for Impact
with a Mission-Driven Approach

The Otto Bremer Trust is a unique organization spanning banking, investments, and philanthropy. Each serves a specific purpose, and they all work together to deliver impact to the communities we serve. As we invest, we look for a variety of returns—social, financial, and a hybrid of both.

Social Return

We carefully review and partner with organizations with a proven track record, or those showing great promise, to ensure our grant investments work harder, achieve more, and make a greater difference in communities throughout the Upper Midwest.

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Hybrid Return

Every investment serves a purpose, and we refer to those that meet both social and financial objectives as delivering hybrid returns. These can range from program-related investments with like-minded organizations, our 92 percent ownership of Bremer Bank, or participation in other mission-driven initiatives.

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Financial Return

Investments that generate a financial return provide a steady revenue stream to support the mission of the Otto Bremer Trust. By prudently managing a diverse portfolio of assets, we’re able to grow the funds available to be reinvested in the community to generate even more good.

Learn More

2016 Financial Overview

For the year ended December 31, 2016.

End-of-Year Market Value of Assets

  • Cash $25,247
  • Investments
    • Fixed income 58,657,427
    • Corporate stock 959,759,790
    • Other 6,016,973
  • Other assets
    • Fixed assets 2,726,265
    • Accrued receivables 194,280
  • Total assets $1,027,379,982

Revenue and Expenses

  • Revenue
    • Interest from investments $49,240
    • Dividends from investments 47,708,676
    • Net gain on sale of investments 1,382,462
    • Other income 2,871,534
  • Total revenue $52,011,912
  • Expenses and disbursements
    • Operations and administration $5,109,364
    • Taxes 508,547
    • Grants and program-related investments 47,314,055
  • Total expenses and disbursements $52,931,966
  • Excess revenue over expenses $(920,054)

Assets

  • 2016 $1,027,379,982
  • 2015 906,202,779
  • 2014 945,257,043
  • 2013 898,842,764
  • 2012 795,565,635
  • 2011 761,102,155

Grants/PRIs

  • 2016 $47,314,055
  • 2015 45,131,785
  • 2014 42,296,824
  • 2013 38,321,048
  • 2012 36,229,373
  • 2011 30,567,764

Good Lives Here

This is how strategic investments change lives—one story at a time.

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