ORIGINAL RULES OF THE McCLENON FUND
The fund represented by the
money, securities, etc., herein described [in a pocket-size notebook which
served as the original account book of the Fund - - R. McC.] is regarded by me, and I
request that it be regarded by any person who may hereafter be entitled to its
control, as a trust fund, to be administered in accordance with the following
rules:
I. Conservation of the Fund.
A. In no case is the capital fund to be reduced
in amount, and it should be increased each year by an amount not less than one
dollar and not more than half the income from the fund during the year.
B. The capital is to be invested from time to
time in such securities or other property as offer the highest return
consistent with a margin of safety corresponding in general to that of first
trust notes on
C. The custodian of the fund is entitled to draw
from the income of the fund an amount equal to the taxes and expenses to which
he is subject by reason of his relation to the fund.
D. If at any time, as the result of unprofitable
investments or otherwise, there is an impairment of the capital fund, 50% of
the annual income must be devoted to the restoration of the fund to its former
amount; and until the restoration is completed no new investments which have to
any extent a speculative character should be made.
E. Not over 10% of the capital fund should at
any time be invested in unproductive property (office building, furniture,
etc.), and such investments should if practical be made out of annual income
rather than constituting a diversion of funds formerly invested productively.
F. Not over 20% of the income for any year
should be used for operating expenses.
G. The term "income," as used herein,
means the entire gross income (not including donations to the fund from any
source) received in connection with the fund, less the amount of taxes paid in
connection with it.
H. At least once each year there should be a
complete inventory and appraisal of the assets and liabilities of the
fund.
II. Use of Income Received
A. The entire net income from the fund, except as above provided, is to be devoted to the improvement of the social and industrial condition of the peoples of the United States (except that contributions may also be made for similar purposes outside the United States), especially of any portion of the population which appears in any respect specially handicapped.
B. No project for social or industrial reform is
to be administered in behalf of the fund, but contributions are to be made from
time to time for the furtherance of projects administered under other auspices.
C. Not over 25% of the income for any year is to
be devoted to any one project, except when the total income for the year is
less than $10.
D. Donations may be made:
(1) to
projects for the promotion of cooperation between potentially hostile groups,
especially between diverse national, racial, religious or industrial groups.
(2) to
assist in the conduct of research of a character likely to contribute to social
well-being.
(3) to
educational institutions, for the establishment or expansion of some special
activity related to social or industrial reform.
(4) for
the establishment or expansion of hospitals or other institutions for the
relief of persons suffering from a special handicap of any sort.
(5) to
periodicals whose general trend is in conformity with the purposes of the fund.
(6) to
assist in the publication of books, etc., which appear likely to advance such
purposes.
(7) to political or
semi-political organizations, if the custodian of the fund is satisfied (a)
that the leaders of such organizations are honestly striving to advance the
welfare of the mass of the population or of some group that is specially
handicapped rather than of any (actually or potentially) privileged group, (b)
that the success of such organizations would be calculated to further the
general welfare, and (c) that such donations would not violate either the
letter or the spirit of the corrupt practices acts.
(8) for
such other objects, conforming to the general purposes indicated above, as may
from time to time be approved by the custodian of the fund.
E. In no case are donations to be made:
(1) for
the purpose of preventing any change in social, industrial or political
conditions, no matter how undesirable such change may appear to be. This paragraph should be given the broadest
possible interpretation, and in no circumstances be varied from, to any extent
whatever. But where donations from the
fund have been made to assist in the accomplishment of a particular object,
which becomes eventually established, for a limited period thereafter donations
may be made for the purpose of preventing a return to the former conditions.
(2) to
advance the interests of property-owners as such, nor in any case to favor a
privileged class, except thru the offering of educational opportunities to
persons who demonstrate special aptitude for profitably utilizing them.
(3) to
finance military operations of any sort, either in behalf of or in opposition
to any organized government.
(4) to
further any activity that is contrary to the law operative where such activity
is to be carried on.
(5) to
promote music or art of any sort, as such.
(6) to promote religion or
strictly moral improvements which involve restrictions on human activities,
such as the prohibition movement of the present time; nor to oppose or attempt
to counteract any agency of religion or moral reform except in so far as may be
necessarily involved in the support of some positive social or industrial
advance.
(7) for
the relief of individual suffering, either directly or thru charitable
organizations, except in so far as such relief is incidental to some permanent
provision for an entire group.
III. Control of the
Fund.
A. If at any time some governmental agency should
be willing to assume the administration of the fund on conditions substantially
equivalent to those indicated above, it is my desire that such agency be
invested with the control of the fund on such conditions. Should the fund ever be taken over by a governmental
agency otherwise than by contract, I hereby request such agency to devote the
proceeds of the fund, so far as may be consistent with its constitutional
powers and the basic principles of its organization, to purposes similar to
those above indicated.
B. Whenever the custodian may wish to have the
fund legally designated as a trust fund, in order that future custodians may be
subject to a certain amount of judicial supervision and control, or to have the
fund administered under a corporate form of organization, it is my desire that
the discretion of the trustees or managers be sufficiently broad to permit such
modification of the details of the above specifications as may be necessary in
order to take account of future changes in social, industrial and political
conditions; but in no case should they be permitted to disregard paragraphs (1)
and (2) under subdivision E of section II.
C. Whenever the fund is given a legal
organization which (by reason of the corrupt practices acts or otherwise) would
make it impracticable to give effect to paragraph (7) of subdivision D of
section II, at the time such organization is effected the custodian should
retain in his own control, or make other provisions for the administration of,
a sufficient amount of the fund to assure adequate future donations of the
character there specified.
D. In the absence of a definite organization of
the fund as indicated under A or B of this section, the custodian should
provide specifically for the administration of the fund in case of his or her
death or inability to act. So far as
practicable, I wish the fund to be permanently controlled by members of my own
family or their descendants. In case of
my death or disability before I have made other provision in relation thereto,
I wish the fund to be administered by my wife, Ruth K. McClenon; if she is
unable to administer it, by the oldest of my children; if none of them is of
responsible age at the time, by my brother, Raymond B. McClenon.
[Signed]
Walter H. McClenon
11 December, 1924