Minutes in Chronological Order

Date: 16 Sep 98

  • Members Present:
  • Dana Brabson - President
  • John Brabson - Secretary
  • Meg Brabson
  • Russ Lemcke (as advisor)
  • Ben Brabson
  • Cyn Brabson (as advisor)
  • Dana started off the meeting with a fairly lengthy overview of the history and provisions of the Brabson Library and Education Fund ("the Foundation") as well as the two Brabson CLATs (Charitable Lead Annuity Trusts). Herewith a not-very-well-ordered collection of his comments.
  • The Foundation was started perhaps 15 years ago with an initial $600,000 contribution from Dad. That corpus has been increased by an additional contribution of $1.5M from Mom's estate (representing about 15% of that estate). The Foundation is a fully qualified charitable Foundation; anyone can make donations to it as they would to any other charitable cause (similar tax consequences).
  • The Foundation board originally consisted of Mom and Dad and Dana. The plan was that upon the loss of Mom and Dad, that Dana, Ben, and John would sit on the board. Meg was to be represented by her son, John. As of 1 Jul 98, the board consists of Mom and Dad, all four members of the second generation, and John Becker.
  • The Foundation is currently managed by Nations Bank (Barbara Coney is our contact). Nations Bank is now BankAmerica. Dad's philosophy was to buy an investment and never sell. Dana has been slowly moving the foundation away from that. Dana has talked with other banks, and, in comparison, Nations Bank seems to be doing pretty well, so at the moment, and especially as long as either Mom or Dad are alive in Orlando, there seems to be no need to relocate the assets. Dana has the power to relocate the Foundation if that ever appears necessary.
  • Per IRS rules for a charitable foundation, it must donate 5% of its worth to charities every year. Up until this year there was been very little to distribute from the Foundation - perhaps $50,000. Mom and Dad have distributed that $10,000 here and $10,000 there. The original philosophy behind the Foundation was that it was created to preserve Dad's memory.
  • This year after Meg's wedding, Dana talked with John Fuller who suggested that Stony Brook (that's a riparian preserve near Foxboro which has been for decades a special cause for the Bristols) would be a good place for the distribution this year. Dana agreed, so the $50,000 distribution went to finish a building there (admin and meeting rooms?) as well as to fund some scholarships. This decision was made before the formation of the larger board.
  • There are also two CLATs. One CLAT will go into force when Mom dies, the second when Dad dies. The assets of the CLATs are fully available to Mom and Dad until they die. Both CLATs contribute 5% per year of their INITIAL values to the Foundation. This is about $300,000 per year from each CLAT.
  • [Unrelated to the Foundation, but out of Mom's and Dad's estate, an "equalizer" trust was established to include those members of the second and third generations who were not around when the first irrevocable trusts were formed. These new members include; Rex, Jessica, Ellen, and George. The intent of this trust was to equalize the income to each child and grandchild as much as was reasonable. Establishing this trust drew down Dad's assets to almost 0; they are now growing back. Nations Bank distributes the income from each trust every year. These distributions have been pretty small compared with the corpus of the trusts because of Dad's very conservative investing philosophy.]
  • Discussion proceeded to the mechanics of the Foundation.
  • Dana observed that he has been trying to move Nations Bank if the direction of "modestly aggressive" investing. All agreed that this was about the right level of risk. Dana thought this meant that the assets of the trust would grow by about 5 to 10% per year (recall that we are required by the IRS to give away 5% per year, so 5% growth produces only break-even). Dana is pleased with the progress so far; his goal is to maximize the benefits to the family over time.
  • What charities to support was discussed at some length. It was observed that we should consider giving a significant sum each year to charities or foundations which can leverage its usefulness. The consensus was that it is better to teach a man how to fish than to give him a fish.
  • Dana observed that Mom is being inundated with charitable requests. Dana sat down with her and went through her 1997 donations. (A copy of these donations was given to Barbara who actually executed the checks?) The total of the donations was approximately $180,000.
  • Dana and Dad agree that the Foundation should restrict its giving to things which are educational. Evangelistic giving is praiseworthy, but should not come from the Foundation. Mom will continue to give to charities which are more evangelistic in nature from her own funds.
  • Russ suggested that we employ an education portfolio consultant. Such a consultant (Prime-Buckles, for example) could suggest specific funds to invest in given equity/bond/etc. ratios. Russ observed that such advice might run on the order of $5,000 per annum.
  • Action Items:
  • John. Set up the dates for the next meeting of the Board. It was suggested that Spring Break would be a good time. John and Ellen are planning on being in Orlando from 13 Mar through 19 Mar.
  • John. Send Dana's CLAT/Trusts spreadsheet to everyone.
  • John. Send the letters which go with Dana's spreadsheets to Russ and Meg.

John M. Brabson

DATE:27 April 2002

  • We met at the Treasure Island Hotel in Las Vegas, NV. Members present. Dana Brabson, Meg Becker, John Brabson; Steve Brabson for Ben Brabson. Absent: John Becker.
  • Bank America people. John Fulgham, Jesica Reuss, Diane Summers
  • Old Business. Diane Summers

Updated numbers

Excess carry forward, $68,000, from past three years. Five year look back window. There is a five year window (probably a moving window)

Separating CLATS into GST and non-exempt CLATS. These must draw proportionately from the assets.

CLAT can transfer stock to Foundation; does not need to sell in CLAT and buy in Foundation.

  • New Business. Jessica Ruess (CFA)

Background. Analyst. (BS, MS)

B of A. Role as an advisor, more conservative. “Prudent Man Rule.” At 90% equities, we are beyond the Prudent Rule used by most Foundations, etc.

Recommend: Quarterly Conference Call?

Tentative Decision: 75% Equities. Decision considered final for this meeting.

Recommend broadening asset allocation.

Outside money managers? For Small Caps ~ 7%. For Mid Caps ~ 14%

Index funds? Mutual Funds? For international ~10% (Brandis (sp?))

Current Portfolio.

  • largely individual stocks
  • not so much emphasis on growth vs value

PC Link Communication – information will be sent out.

  • Beginning of Closed Meeting
  • Minutes of 5 May 2001 Meeting.
  • Minutes were approved as submitted (with one editorial change).
  • Residual question regarding the 1985 GDB Trust, Section 6. Was this issue resolved? It is our will that distributions cease when all of the money is withdrawn, and that the distribution be reduced proportionally when a portion of the money is withdrawn.
  • Council on Family Foundations. Meg will pursue membership. We also authorize two people to attend the conference in San Jose, February 2003.
  • Gateway Criteria.

Proposal must be in the hands of the Board members at least two weeks in advance of the decision meeting.

Basic Information. Name, etc.

Executive Summary – one page.

Discussion of how the proposal addresses the Mission and Objectives of the Foundation. At some point, we feel that we should have a brochure that describes both our Mission and our evaluation criteria.

How funds will be spent, and associated time line.

Advocate on the Board.

  • White Paper process.

John will prepare a detailed description. However, the basic idea is this. As a precursor to a proposal, a candidate will submit a 2-page (maximum) white paper. This will be distributed to Board members and an advocate will be sought among the Board members. If an advocate can be found, then that person may contact the candidate, and invite submission of a formal proposal. The idea is that proposals would not be solicited (or perhaps even accepted) until after and initial expression of interest by the Board.

  • WonderLab

hiatus not bad

develop programs rather than infrastructure

  • East Mountain

more ideas on “research” ideas, rather than infrastructure

we appreciate the learning that comes from student involvement in many aspects of construction.

we favor programs, rather than bricks & mortar

  • YEA

Request proposal for inner city program.

Assuming that we like it in a phone pole of members, will find at $5K/year as program money (not endowment money).

  • Mountain Road School

Outside scope of our educational interests.

We applaud what you are doing, and wish you the best, but ...

  • Slate of Officers.

Keep same officers! Moved, seconded, and adopted by aclamation.

  • New Board Member.

Moved, seconded and adopted that Andrew Brabson be elected to a two year term as a replacement for departing Member, John Becker.

  • Adjournment at 1735.

DATE:05 April 2003

  • Meeting

We met informally for breakfast at 0800. Then we adjourned to WonderLab for our formal agenda.

Present: All Board Members, Dana, Ben, Meg, John, Andrew

  • Call to BoA

Annual input into the BLEF, $398,189.

BoA people on line:

  • John Fulgham
  • Jessica Reuss
  • Diane Summers

We are not required to spend anything this year beyond the amount committed last year: $85 K.

148,500 = 5% of current market value

2,970,089 Current Market Value. Error in book. 4 outside money managers were inadvertently omitted. Diversification helped last year. Two of the 4 managers outperformed indexes.

BoA Chicago Office, specializes in Foundations

Guidestar.org. Source of information.

Re: EBB CLAT. 95% Equity. No clear view expressed to the Bank. Suggestion, add some fixed. (More conservative)

In all portfolios, moved to diversify asset allocation into mid-cap, foreign, etc. But, remained in equities. Felt to be the sense of the Board.

30% fixed, 70% is the general advise.

Add short-term fixed. 1 – 3 years. (~3%) Funds, rather than individual bonds. Short term are defined as 2-year maturity or less. Intermediate term are defined as 5 – 6 year. (~4 – 5%) Not long-term, because of low interest rates.

BLEF is large enough to have individual bonds, etc.? Rather than going to Funds? No double dipping? No cost in going in and out of funds. 3 individual bonds represent 3 concentrated risk positions. Eventually, move to individual bonds. Thought process, start with Funds, and then move gradually into individual fixed instruments.

Core portfolio, now balanced between value vs growth. Were over weighted toward growth. Recommend balanced for the time being. Don’t make a “style” change at present.

Active management by BoA? Jessica would be the person who would talk to us routinely.

John F. feels frustrated with level of communication. Wants to be more proactive. (I admit that he has mentioned this before.) Would like to have a single person to contact on a regular basis. John B. is the best candidate. We identified John B.

  • Julia Memorial Fund. Lynn Lewis. Music School, Developmental Office

$120K given by BLEF. Did not go to matching fund, as expected.

About $100K corpus at present. Managed by IU Foundation.

Honorary fraternity still has a fundraiser in name of Julia each year, ~$250.

$20K in memorial fund allows $900 award each year for Marching band honoree.

  • BLEF from Florida

General consensus of Board. Every year, BoA says the “right” words. This is no longer adequate. There is a general feeling of dissatisfaction. This seems to stem from the lack of frequent contacts of the sort:

  • “We would like to suggest that you consider doing the following ...”
  • “We think there is an opportunity here ...”
  • “Have you thought about the following ...”

At this point, there is no obvious reason to move the legal entity from Florida.

There is a strong sentiment to move the assets to Albuquerque. Face to face contact is a major reason.

It is less clear where in Albuquerque we should be.

We have in hand information from Albuquerque Trust Companies. We can use this information for inviting these companies to make formal proposals to us.

Should we move everything? There are personal accounts that may be impacted by a move.

Plan

We will look into moving the 85 trust. Apparently, there are no specific provisions in the trust that identify the process for moving it. This is apparently interpreted as meaning that it will be difficult to move this trust. The lawyers are looking into this. All others have provisions and appear to be movable.

Select 3 – 5 organizations to make formal proposals

Evaluate formal proposals

Develop a plan for moving, and submit to Board for approval.

Action for bank. By “natural” processes, reallocate assets to move toward about 70% equities.

  • Election of Officers

President, Meg

VP and Bank Liaison, John

Secretary, Ben

Treasurer, Andrew

  • Board members keep copies of receipts. Treasurer will make copies and save them in an appropriate medium. (Perhaps, CD’s)
  • Report on Council on Foundations

Handbook is excellent

We are small by comparison with many foundations. $10M is average.

Other: Council on Family Foundations, Council on Small Foundations

  • Need for Retreat

13 – 20 July 2003.

Facilitated

  • Decisions on Grant Proposals

WonderLab. Consider 10K this year, 40K next year.

East Mountain HS. About ¼ of much larger funding initiatives. Seems like a Charter school. – 21K

Falmouth Historical – 15K with 14K next year

WonderLab – 10K with 40K next year

Cape Symphony – 7K

UNM – 10K

  • The formal part of the meeting adjourned at 1730 hours. Informal discussions continued throughout the evening and into Sunday morning.

Date: 14-18 July 03

  • Falmouth, MA at the home of Meg and Russ
  • Present: Dana Brabson, Bennet Brabson, Meg Becker, John Brabson, Andrew Brabson.
  • [As a side note, my written notes contain a lot more detail than I have included here. For future generations, the notes include comments about our parents, their gifting, etc.]
  • The 5-day long meeting was convened so the Board could agree on a list of Values, write a Vision Statement, and draft a Mission Statement for the Brabson Library and Educational Foundation. To facilitate this process, a strategic planner had been hired by Meg to mediate the meetings on Monday afternoon, all day Tuesday, and Wednesday morning.
  • The Monday morning meeting was convened by President Meg Becker at 1020 on 14 Jul 03.
  • The morning meeting was a planning meeting to simply list the issues that should be addressed during the week. This list contained the following items:
  • Write a Values Statement – mediated
  • Write a Mission Statement – mediated
  • Establish Goals for the Foundation – mediated
  • Write Action Plans for each Goal – mediated
  • Examine possible new Fiscal Year for the Foundation
  • Set time and date for 2004 granting meeting
  • Examine the possibility of changing the Foundation name
  • Examine the desirability of soliciting proposals
  • Examine the advocacy question
  • Examine the desirability of creating a brochure and web site
  • Discuss equity in granting
  • Discuss how to bring in new members to the Board
  • Discuss how to retire or set term limits for Board members
  • Discuss moving Foundation (and other Brabson trusts) to a new trustee/manager
  • The Board adjourned for lunch about 1230 and reconvened at 1330 to meet with Christine Johnson-Staub. Christine has been counseling independently for about 1 year, mostly in the non-profit realm. She has facilitated strategic planning issues in both large and small groups.
  • Christine made the following assumptions (which she verified with us). 1. The Foundation exists and all of us want it to be successful. 2. There will be lots of work left even after her 3 days with us. Her expectation was that we would have a set of values, a mission statement, and a vision statement by the time she left. She thought we might be able to make a list of our goals and to write action plans for those goals, but we would not have time to attack the problem of creating criteria by which to weigh proposals.
  • The first task was to establish a set of values for the Foundation. Each Board member was assigned 5 votes that could be distributed in any fashion among the values. The values were selected from a list of values found in The Guide To Small Foundation Management. All the values that received at least one vote were considered to be values of the Foundation. The Board distinguished operational values (values which applied to the Board, Foundation, and its operations) and criteria values (values which could be used as criteria for granting). The operational values were marked with “O” and the criteria values were marked with “C”. The votes came out as follows:
  • VotesTypeValue
  • 3 CArts/Artistry
  • 3 O/CInnovation/Risk-taking/Creativity
  • 3 OFamily/Love
  • 2 OFun
  • 2 OIntegrity/Ethics/Morality/Trust
  • 2 CEducation/Knowledge
  • 2 OFaith/Spirituality
  • 1 CBeauty
  • 1 CExcellence
  • 1 O/CLeadership
  • 1 CPeace
  • 1 O/CResponsibility
  • 1 OTeamwork/Communication
  • 1 O/CSustainability/Long-term impact
  • Interdependence
  • Inspiration
  • Transformation
  • Diversity
  • Dignity
  • Gratification from giving
  • Compassion
  • Recognition/Monuments
  • Community
  • Charity/Altruism
  • Communication
  • Environmental protection
  • Service
  • Legacy (wealth and ideas)
  • Monday we adjourned at 1700 hrs.