BOARD OF TRUSTEES
February 10, 2010
The annual meeting of the Peninsula Endowment Board of Trustees was held in the Community room of the Northern California Unit RFB&D, 2445 Faber Place, Palo Alto on February 10, 2010. The meeting was called to order by President Westman at 11 am.
Present: Mmes.Bitting, Dunham, Tedrow and Westman; Messrs. Fowler, Hamel, Kohler and Waud.
Minutes of the meeting held November 13, 2009, were approved.
Officers and Trustees were elected to serve a one year term 2010 – 2011:
President Ray Westman
Vice-President Anne Dunham
Treasurer Steve Hamel
Secretary Virginia Tedrow
Members at Large: JoAnn Bitting,Ben Waud, Fred Kohler-NC Unit Chair
Treasurer Hamel reported the total value of the Endowment portfolio as of 2-9-2010 was $3,589,523 with 83% of Endowment assets in cash. The investment in equities has more than doubled since last November and now represents 15% of the portfolio. This brings us closer to our goal of 30% equities by 5/31/2010. Additional purchases of bonds would be needed in order to reach the 10% end of year target set out in the five year plan and they will be added when returns rise. Trustees voiced approval of Hamel’s practice of mailing financial materials in advance of meetings. Hamel described the five year plan as speculative but useful as a means of tracking the Endowment’s future progress. He foresees its asset base continuing to erode for the next two to three years as trustees pass out more money than is generated by investment activities. Consequently, the guideline for disbursement has been lowered to 4% of the total amount of the Endowment’s asset base until return-on-assets improve. Trustees have committed the Endowment to support the Northern California Unit with a $12,000 a month contribution to be paid on a quarterly basis. This is an unrestricted contribution and represents the sole disbursement to the unit by the Endowment . The lease for the new studio facility at 2445 Faber in Palo Alto was executed by RFB&D in Princeton on behalf of the NCU and has a five year term with a renewal option and escalator clauses. The monthly rent is about $9,000 or slightly more than $3.00 a square foot, commensurate with office rents in Palo Alto.
Trustees thanked Mrs. Dunham for her work in creating the first Endowment website and complimented her on its attractiveness and clarity.
Mrs. Bitting, a member of the Hdq Audit Committee, proposed a discussion of the Endowment’s mission and investment strategy. She distributed talking points which had evolved from questions raised by trustees Dunham, Fowler, Kohler and herself. Significant changes which may affect the Endowment’s operation were described. There are now over a million 501©(3) groups or one for every 300 people in the US with a growing IRS scrutiny. Ongoing changes At RFB&D with increasing centralization; there are now 20 studios, down from 30. Learning disabled are now 78% of current borrowers. The national organization gets most of its support from the government, a declining source. The Endowment’s yearly contribution to the Northern California Unit is now close to 40% of its annual budget. Given the speed of technology, can RFB&D keep up? What is the Endowment’s mission, its investment strategy. Bitting feels both should be revisited along with a review of legacy Capital Management’s cost and effectiveness. Mrs. Westman and the board agreed that trustees Bitting, Dunham, Fowler and Kohler should examine the issues raised and bring ideas to the next meeting.
NC Unit Chair Kohler distributed a Unit information flyer prepared by Trish Bubenik, Northern California Area Director. He reported a very successful studio Open House in January attended by 80 people; another is scheduled for February. The capital campaign goal includes funding of 7 new recording booths, 5 of which have been purchased and installed. One recording booth at the old studio was relatively new and moved to the new studio. As of this date secured funding for the Move to the Future campaign totals $145,000 of the original $200,000 budget. In implementing centralization, checks go to HDQ for deposit; there is no local bank account. Separate financial books and transactions for all Units are maintained at and by Hdq. Mrs. Dunham pointed out that the need to reduce administrative costs has made mergers and centralization commonplace. In mid- and southern California the number of studios has been consolidated from 5 to 3. Hdq expects the NC Unit to grow and prosper. The Record-a-Thon is scheduled for the week of April 19. The board reviewed but made no decision whether a special meeting by phone would be needed in spring to discuss the fiscal 2011 commitment to the Northern California RFB&D Unit. There was no Legacy portfolio review
Meeting adjourned at 1:20 pm.
Virginia V. Tedrow, Secretary