3-19-2013 Approved Minutes
Excelsior Foundation
The Excelsior Rotary Foundation Board of Trustees Meeting of March 19, 2013
The Meeting was Called to Order (1.0) by Chair Don Draayer at 12:50PM at Bay View Event Center on Tuesday, March 19, 2013. In attendance were trustees Don Draayer (Chair), Randy Schumacher (Treasurer), Trustees Dave Peterka, President Tim Litfin and Steve Frazier (Secretary).
Action on Minutes (2.0) was discussed and Dave Peterka moved and was seconded by Chair Don Draayer to accept the minutes of January 22, 2013 as written and the motion was accepted unanimously. The Minutes of the Special Meeting of February 19, 2013 were then discussed and Chair Draayer moved and seconded by Secretary Frazier to accept the minutes as written and the motion carried unanimously.
The Treasurer’s Report (3.0) The Treasurer’s Report began with a review of the Fund analysis Report (3.1) by Treasurer Schumacher. Schumacher indicated that the Fund Analysis Report for March did not include the North Star Investment Analysis Report update and that line item #114 had been corrected and paid for the Area 12 Grant for year two of the four year granting process to the Wayzata Club. Chair Draayer outlined the Area 12 Plan to give Treasurer Schumacher a fuller understanding of the four year commitment and how the funding process worked. Schumacher suggested that Investment Reports should be reported out twice a year on the Fund Analysis Sheet because of monthly fluctuation and that the Foundation could save a modest service charge for printed reports by reviewing the investments on-line. After some discussion it was decided by consensus that Chair Draayer and Treasurer Schumacher would utilize on-line reports rather than the more costly paper reports from NorthStar/CRI Securities on behalf of the Foundation.
The Treasurers Report (3.1) continued with a review of the Profit and Loss Statement and Balance Sheet Reports. Schumacher indicated that he is still working with the transition of the manual justification to Quick Books for the Club and the Foundation. Currently there is $14,237.93 in Checking and $34,220.47 in Savings of the Foundation. The Trustees discussed several of the entries in the P&L Expenses (i.e., Academic Scholarships, Polio Plus and STRIVE) as to their placement in the expense category in terms of the amounts, what they included and which items should come out of Foundation Funds. Treasurer Schumacher will confer with former Treasurer Dean Friesen to clarify the expenses as he continues the justification process to Quick Books and report back at the next meeting of the Foundation on May 28, 2013.
Next and continuing the Treasurer’s Report (3.2) the trustees deliberated and took action on six requests from the Rotary Club Board of Directors for Charity Expenditures (3.2):
Proposal #1: Fund “BEE” Project from Endowment Fund Earnings PROPOSAL #1: On March 19, 2013, Frazier moved, Peterka seconded that the Honey Bee Project that was presented by Abby Gordon to the full Rotary Club meeting on March 5, 2013, that was subsequently recommended and forwarded by the Rotary Club Board/President to The Excelsior Rotary Foundation for funding in the amount of $400.00 for this charitable project, that a Foundation check be drawn for this amount and be paid to the Honey Bee Project in care of Abby Gordon, 17404 Bridgewater Circle, Minnetonka, MN 55345, and that this payment be withdrawn from the investment earnings in the LEE PARIS ENDOWMENT FUND and after discussion the motion carried unanimously.
Proposal #2: Fund Romanian Orphanage Van Project from Endowment Earnings PROPOSAL #2: On March 19, 2013, Draayer moved, Peterka seconded that The Excelsior Rotary Foundation draft a $2,000 check to the Romanian Orphanage Van Project in care of Lawrence L. Brustad, President, Westonka Rotary, PO Box 264 Mound, MN 55364 which fulfills the Excelsior Rotary Club and the Excelsior Rotary Foundation’s obligation’s to that club for a charitable project under the Rotary Consortium 12 Agreement of 2010-2011 and that this payment be recorded under the LEE PARIS ENDOWMENT FUND, Year 3 of 4 and after discussion the motion carried unanimously.
Proposal #3: Fund Starkey (hearing aid) Project in Chimbote, Peru PROPOSAL #3: On March 19, 2013, Frazier moved, Draayer seconded that in January, 2013, the Excelsior Rotary Club Board/President did forward a proposal to the Excelsior Rotary Foundation to fund $2000.00 to the charitable Starkey (hearing aid) Project in Chimbote, Peru, in care of Rotarian Jerry Brecke, who due to exigencies of the timeline prior to travel departure did take his own $2000 for this purpose, that on Monday, March 4, 2013 the Foundation received documentation from Orlando Bermudez Garcia who wrote to Jerry Brecke (with copy to Earl Milbrath (emibrath@traveladvisorsintl.com) , “I received $2000.00 dollars that are being used in translation costs and trips to other cities, and certain other expenditure in Chimbote,” (document herewith attached), that Jerry Brecke be reimbursed $2,000.00 for his loan to this charitable project, and that this amount be recorded as an expenditure from the ANNUAL FUND for the Presidential Year of Tim Litfin and after discussion the motion carried unanimously.
Proposal #4: Fund Elementary School Dictionary Project from Sherwood Grant PROPOSAL #4: On March 19, 2013, Frazier moved, Draayer seconded that in March, 2013, the Excelsior Rotary Club Board/President did forward a proposal to the Excelsior Rotary Foundation to fund $2,042.87 to the charitable Elementary School Dictionary Project for the 2013 school year, that documentation for associated expenses has been received in the amount of $2,042.87, that The Excelsior Rotary Foundation pay for such dictionary project expenses from the Foundation’s ANNUAL FUND, out of the Sherwood Grant for Education Fund, and that three checks be to these payees: $1632.00 to The Dictionary Project, P.O. Box 1845, Charleston, S.C. 29402 (Receipts Included); $313.09 to Ron Hughes for Rotary Labels (Receipts Included); and $97.78 to Karen Frazier ($97.78 for Rotary Labels - Receipt Included) and after discussion the motion carried unanimously. (Note: The Trustees discussed programs that have received funding that are near or now at the three year guideline and that will be needed to be treated as exceptions if continued funding is requested and include, ICA, Dictionary Project, Kids Against Hunger, STRIVE, and the scholarship program. )
Proposal #5: Fund Resource West (Back To School Project) from Sherwood Grant PROPOSAL #5: On March 19, 2013, Peterka moved, Draayer seconded that in March, 2013, the Excelsior Rotary Club Board/President did forward a proposal to the Excelsior Rotary Foundation to fund $2000.00 the charitable Resource West (Back to School Project), that a check for that amount be drawn from the Foundation’s ANNUAL FUND, out of the Sherwood Grant for Education Fund, and that the check be sent to the Resource West organization made out to Resource West, Hopkins, 915 Main Street, Hopkins, MN 55343 and after discussion the motion carried unanimously.
Proposal #6: Fund the Costa Rica Leaf Eating Ant Project through Seeds of Change at Minnetonka High school. PROPOSAL #6: On March 19, 2013, Draayer moved, Frazier seconded that in March, 2013, the Excelsior Rotary Club Board/President did forward a proposal to the Excelsior Rotary Foundation to fund $1,250.00 for the charitable Seeds of Change Matching Grant Program that the Foundation would match individual student’s sale of coffee up to $500/student but not to exceed the $1,250.00 allocated and that amount be drawn from the Foundation’s ENDOWMENT FUND, and after discussion the motion carried unanimously. (Note – The Excelsior Rotary Club will also be doing a parallel matching grant for $1250.00)
Upon passage of the six funding requests the Trustees signed the master copy of the funding sheet authorizing the funding allocations for Treasurer Schmacher and for the IRS if ever needed.
The Treasurers Report (3.3) continued with Chair Draayer presenting former Treasurer Dean Friesen’s report on Operational Expenses for Jim Olds and that will go to the Old’s estate. Draayer noted that in November, 2012, Jim Olds recommended that $500.00 be held in escrow for his Foundation Treasurer’s expenses, but that no receipts were forthcoming during his illness. In his last days, Jim turned over a folder of receipts to Interim Treasurer Dean Friesen who totaled expenses around $104.00 plus a few cents more and judged that that they should be charged to the Rotary Club budget, not the Foundation budget; thus, the $500.00 that has been authorized for Foundation operating expenses is now null and void.
Old Business (4.0) consisted of a progress report by Secretary Steve Frazier on the Posting of Foundation Minutes and other important Foundation Documents of the Excelsior Rotary Website. Frazier distributed a handout of approximately 40 documents that have now been entered into the Excelsior Rotary Website in the Documents section. All the documents are housed under the “Excelsior Rotary Foundation” folder and contain important historical documents of the Foundation, subfolders for each previous year’s minutes, and the current individual policies of the Foundation by number and title. Frazier also noted that the current year’s minutes are located under the Home Page banner of the Foundation and that the Minutes for 2012-2013 will be added to the Club Documents section at the end of the Rotary year as of July 1, 2013. Frazier explained that this is a continuous process and that additional documents may be added and revisions to policies updated upon approval of the Trustees.
New Business (5.0) consisted of the second reading and passage of Policy #7 on Record Management, Storage and Accessibility (5.1.1). Chair Draayer noted that this policy meets best practices and provides for transparency of the Foundation and meets the requirements of the IRS for legal record retention. Draayer went on to reference the concerns shared by the Foundations Legal Advisor, Gary Thompson that were incorporated into Draft #4 of this policy and especially section 8 on Compliance as well as a schedule of retention and review. The Trustees discussed what documents should be kept in the printed and electronic records and Chair Draayer indicated that he keeps a complete electronic record of all documents and correspondence relating to the Foundation. There being no further discussion Schumacher moved and was seconded by Frazier to adopt Policy #7 on Records Management, Storage, and Accessibility and the motion passed unanimously.
Next the Trustees considered the amended version of Policy #3 (Draft #1): Structure of Foundation Funds and Associated Funds (5.1.2). The amended sections on page 4 were in sections 1.3.6.1, 1.3.6.2 and1.3.6.3 relating to investment fees being paid out of interest and dividends on investments but not deducted out of Capital Gains and the treatment of remaining interest and dividends split 50% back into the fund 50% of the funds being placed in a bank account for charitable grants. After additional clarification and discussion Peterka moved and Frazier seconded the motion to accept the second reading of amended Policy #3 on the Structure of Foundation Funds and Associated Funds. Chair Draayer called for the vote and the motion passed with Draayer, Peterka and Frazier voting in the affirmative and Schumacher abstaining from the vote. Chair Draayer directed the Secretary to post policies #3 and #7 in the Adopted Policies of the Foundation.
The next order of New Business 5.2 was to address an inquiry by member John Marty about Lee Paris’ intentions for the bequest of $75,000 he made to the Rotary Club of Excelsior. The recollection of Marty was that the funds were to be used for large projects. The Trustees reviewed the bequest from Lee Paris (found in Policy #3, Section 1.3.2 - p.3) and the formation of the Lee Paris Endowment as part of the Foundation. The directive from Lee Paris refers to funds being used in “urgencies” by unanimous action of the Board and/or income from the bequest being used for “ordinary operating expenses and charitable contributions”. Upon the formation of the Foundation and subsequent creation of the Lee Paris Endowment Fund it was deemed prudent to invest the corpus (i.e., the principal) of the $75,000 bequest and use the interest from the corpus for re-investment and charitable grants. The conclusion of the Trustees was that many members may have opinions about what Lee Paris intended his bequest to be used for but his directive does not support John Marty’s recollection and that the current use of the bequest in the Lee Paris Unrestricted Endowment Fund is a prudent use of his bequest.
The final item for consideration under New Business (5.3) was to Review the “Packet Explaining Rotary and Steps to Access Rotary Dollars for Humanitarian Causes”. Chair Draayer gave Treasurer Schumacher credit for two ideas coming out of their joint orientation meeting the previous week:
1) Develop and have everyone (non-Rotarians and Rotarians) utilize a packet containing PROPOSAL EXPENSE REQUEST FORM which would be accompanied by three explanatory sheets: WHAT is Rotary (good PR sheet); BUDGETARY OVERVIEW SHEET distinguishing Rotary Club Budget and Foundation Budget; and a sheet showing HOW CHARITABLE FUNDING REQUESTS are processed.
2) Utilize a liaison person from the Rotary Club Board to attend Foundation Board meetings to learn how the Foundation functions and to be of assistance to persons who write proposals for first and step consideration by the Rotary Club Board and what third step considerations are followed by the Foundation Board of Trustees. Secretary Frazier suggested that it might be helpful have the Foundation Chair attend the Club Board Meeting to help clarify Foundation issues that arise at the Board Meetings. Trustee Peterka suggested that the Chair of the Foundation and the President are too busy to attend each other’s meetings but that the President-Elect should attend the Foundation’s Meetings as part of their training to become President and can become aware of the Foundations practices and gain necessary experience in preparation for their Presidency. There was unanimous consensus for both ideas. Chair Draayer said he will share both Idea #1 and Idea #2 with President Litfin and President-Elect Molly Swenson, draft language to this end for consideration by both the Rotary Club Board and Foundation Board regarding content for Idea#1 suggest assigning the President-elect as Liaison to the Foundation.
There being no further discussion Peterka moved and was seconded by Schumacher for Adjournment (6.0) and the motion passed unanimously at 3:15PM with the next scheduled meeting to be held on Tuesday, May 28, 2013 at Bayview Event Center at 1:00PM.
Respectfully Submitted by Foundation Secretary Steve Frazier.