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