Minutes of the BOARD OF TRUSTEES
December 9, 2015
The meeting of the Peninsula Endowment Board of Trustees was held at the offices of Brown Adams, 2600 El Camino Real, Palo Alto on December 9, 2015. The meeting was called to order by President Kohler at 10:17 AM.
Present: Mmes. Dunham, Wilson; Messrs. Fowler, Kohler, and Margulies.
Minutes. The minutes of the September 30, 2015 meeting were unanimously approved.
Update on State and IRS Filings. Based on the letter written to the IRS by Brown Adams, Peninsula Endowment received an abatement of the $18,000+ penalty. In addition, the extension request for the 2015 tax filing was approved. The expectation is that the state and federal returns will be filed by January 15, 2016.
President Kohler is continuing discussion with Venable regarding the finalization of the CA FTB 3500 filing. A final version is expected this week. Venable has agreed to work with Peninsula Endowment in the development of its updated governance documents.
Any correspondence should copy both Fred and Gail to ensure complete documentation records.
Treasurer’s Report. Vanguard distributed the performance report for November 30 via email in advance of the meeting. Marcus Lerman joined the meeting via phone to provide an update from Vanguard. For November U.S. equities were slightly positive, international equities were negative and bonds were slightly negative. For the calendar year U.S. equities are +2.47% and international -2.27%. Going forward, the expectation is for higher levels of volatility.
At this point there is no need to rebalance the portfolio. However, Vanguard’s recommendation is to increase international exposure. For equities this means moving from a 70/30 U.S. to international ratio to a 60/40 U.S. to international ratio for equities.
For fixed income the recommendation is to move from a 80/20 ratio to a 70/30 ratio, both U.S. to international.
The Federal Reserve is expected to raise rates by 25 basis points in the next week. The expectation is for a slow, gradual increase in rates.
To make the recommended change, we need to notify Marcus and an authorized signatory for the account must sign the new schedule. Since the Peninsula Endowment account was opened the cost of the international equity account has dropped by 20 basis points, now 14 basis points, and the international bond account is 19 basis points. We discussed the date for the next meeting with Vanguard. The possibility of a phone conference to review the portfolio was also mentioned.
The cost of the Vanguard account was discussed based on a recommendation from Brown Adams. Currently, the cost of the account is less than 50 basis points. A motion made that the board has reviewed the performance of Vanguard as our money management firm and has decided to continue with Vanguard. The motion was unanimously adopted.
A motion was made to reaffirm our 60/40 equity to fixed income allocation and to follow the Vanguard recommendation to increase both international equities and international bonds by 10%. The motion was unanimously adopted.
After discussion of the date for the next meeting, the date was tentatively set as February 17, 2016.
Web Site Update. There was general agreement that documents should be posted on the site in PDF format. We should also be posting our form 990 on the site. Gail will provide copies of the 990s for posting.
Mission Statement. Ideas were discussed to include in a draft mission statement. The next step is to circulate draft versions of a mission statement for discussion.
Learning Ally Update. Fred shared the update on the College Success program from Learning Ally. Learning Ally would like to present to the board at a future meeting. Rather than having a presentation at the next meeting, it was suggested that people distribute information on organizations for consideration of funding. We will need to make decisions on grants by the end of the fiscal year.
Adjournment. The meeting was adjourned at approximately 12:15 PM.
Respectfully submitted by:
Greg Fowler, Recording Secretary