The Walter H. McClenon Fund
Sunday 1 December 2013
Minutes of Meeting
The
quarterly meeting of the Board of Trustees of the Walter H. McClenon Fund,
Inc., was held on Sunday, 1 December 2013, at 4 pm EDT/3 pm CDT/1 pm PDT,
nominally at 1119 South Carolina Avenue, SE, Washington, DC 20003, with
Trustees meeting by conference call.
Present: Bob
McClenon, President; Chuck McClenon, Treasurer; Carol McClenon, Secretary;
Robin Clark Alm;
Lee McClenon; Dave McClenon
Bob McClenon called the meeting to order
at 4:04 EST.
1.
Approval of minutes of previous meeting in September – accepted
unanimously.
2.
Financial reports
2a.
Quarterly report of Treasurer
Treasurer's report for
December 1, 2013:
1.
I'm attaching spreadsheets on the holdings of the
General Endowment and Special Endowment, as of November 23. I circulated
these earlier; I've rearranged the columns a little to make them more readable
perhaps for us, and have added a columns to show our positions as of December
31, 2012, and changes in value since then. Important numbers are,
·
General Endowment market value at Fidelity, $62,829,
of which $2201 is cash in money market. The cost / book value is $42,732;
the market value 12/31/12 was $58,134. Market value is up 8% since the
beginning of the year
·
Special Endowment market value at Fidelity, $107,675,
of which $8,094 is cash in money market. The cost / book value is
$85,253; the market value 12/31/12 was $91,964. Market value is up 17%
since the beginning of the year.
2.
Wells Fargo checking balances, General Endowment
$1949.08, Special Endowment $3925.00.
3.
In the special endowment, we withdrew cash from
Fidelity and transferred to checking before the close of 2012, in anticipation
of paying grants approved in 2012 but not paid until 2013. The change in
money market cash, up from $6818 to $8,094 is probably an accurate reflection
of dividends received, although we don't have a full accounting from
Fidelity. We should expect additional income from end-of-year
dividends. Special Endowment income last year was $3830. We might
assume it will be similar this year.
·
In the general endowment,
we transferred cash from money market to checking after January 1
in order to pay grants approved in 2012. Hence the decrease in money
market from December , 2012 to present. Last
year's income was $1686. Here again, we might assume it will be similar
in 2013.
4.
Under the ByLaws, The
General Endowment should retain at least one dollar, and up to 50% of its
earnings in a given year; conversely stated, it gives away 50% - 99%.
Given an estimated income of $1600, the target amount to give this year
might be $1,000.
5.
The grant goal of the Special Endowment is driven
mostly by the tax code. It must, in an average year, give away at least
5% of its corpus (based on book value). In any given year, it doesn't
have to meet that target, if it has exceeded it in previous years and has a
carryover. It minimizes taxes if, in any given year, it gives a higher
percentage of its corpus than it did on average over the previous five years.
The first requirement could be met this year with grants of5% of $86,000,
i.e., $4300. To meet the second requirement, we need to make grants of
probably something above $5500. I'm suggesting a target amount of $6,000.
6.
The Special Endowment is in a kerfuffle with the IRS.
In May, I filed for an extension, to August, for the filing of our annual
990-PF, submitted with an estimated payment. But I had a digit wrong in
the Employer Identification Number. The filing in August did not connect
with the May filing or the check enclosed with it, so the IRS suggested that we
owed not just the $70 missing from May, but an assortment of penalties. I
have enlisted the assistance of my congressman in taking the case to the
Taxpayer Advocate in Treasury. The most recent report is that this is probably
nearing resolution. Since we have documentation that we paid the $70 and
it was deposited, the IRS just has to figure out where they put it. But I
shouldn't make light of it until it is settled.
7.
The last pieces of paperwork to transfer our holding
from Fidelity to Morgan Stanley have been forwarded to Morgan Stanley.
Those transfers should probably occur in the coming week.
2b.
Reports on signature transitions and related activities: The signature transition has been
completed. The securities transition is
in process.
2c. Any other financial reports - None
3.
Report of President – the Agenda and the Lists are available on the website and
by PDF attachments previously sent by the President.
3a.
Any other comments by President – Bob commented on a question raised by David
McClenon regarding a new IRS regulation/interpretation about 501(c)4’s and contributions for political activities. Bob and David agreed that the Fund has never
been in violation and has very little probability of being in violation.
4.
Reports of ad hoc committees on organizations -- none
5.
Any other reports -- none
6.
Amendments to bylaws – none (for once, hooray!)
7.
Action on file of grant requests
We
engaged in discussion about “socially conscious investments,” in two
contexts: whether the Fund should invest
its own principal in “socially conscious mutual funds;” and whether we should
support an organization such as Responsible Endowments Coalition, which
encourages colleges to be responsible investors. Trustees expressed agreement that there is an
on-going balancing act between making sure that we do not support objectionable
activities while also attempting to get a high yield on our investments.
The
Trustees voted unanimously to make the following contributions:
Special
Endowment: $5,000 to Training for Change
Special
Endowment: $1,000 to Maternity Care
Coalition
General
Endowment: $1,000 to Responsible
Endowments Coalition
8.
Any
other new business – Bob noted that it is time to renew the domain registration
for the website, which will cost $17.
Bob proposed that the Fund authorize payment for the renewal of the
registration of the Fund’s domain. The
Trustees voted to authorize the President to negotiate a multi-year
registration of the domain name for a cost of not more than $100.
Chuck expressed thanks to Robin for joining the meeting
and encouraged her to identify organizations she would like us to support.
9.
Appointment of ad hoc committees – we agreed to delete this agenda item from
future meetings.
10.
Scheduling of annual meeting (in March) – Tentatively for Sunday, March 23,
2014 at 1/2/3/4 p.m.
The meeting was adjourned at 4:57 p.m.
Respectfully submitted,
Carol A. McClenon, Secretary