Trustees and Trustees-elect,

This is part one of the treasurer's report, raw numbers without a lot of numerical analysis, and an introduction for the more recent trustees.  "The Fund" is legally two entities, called The General Endowment of the Walter H. McClenon Fund and The Special Endowment of the Walter H. McClenon.   The General Endowment is the "original" fund, as created by Walter H. McClenon in 1924, and incorporated in 1976.  Under the IRS code, it is a "501c(4)" organization, meaning that its purposes can include political advocacy for causes, but not including contributions to specific candidates.  Contributions to a 501c(4) organization are NOT tax-deductible, but neither does the organization pay taxes on investment income.  The money in the General Endowment (in tax lingo we call that "the corpus") includes the original money invested by Walter, with interest on them, a lot contributed by Paul and Kay, with interest, and funds contributed by various others.

The Special Endowment is established under the IRS code as a "501c(3) organization."  Contributions to 501c(3) organizations ARE tax-deductible for the donor, but the organization is more restricted in its missions.  It is limited to humanitarian, educational, medical and various other humanitarian purposes, and cannot engage in or contribute to political advocacy.  The Special Endowment was established with a gift from Kathy Clark, and most of its corpus derives from her contributions.  A 501c(3) organization is required to give away 5% of its corpus in any given year; otherwise it pays tax on its accumulated earnings.  Every year, it files a Form 990 with the IRS, reporting its holdings, earnings, expenses, contributions, and officers  (that means you).  That filing is public record, and philanthropic organizations look up each others' 990's and come asking if we wouldn't like to give to each other.  

Most of the corpus of each endowment is invested in an account (that is, two separate accounts) with Fidelity, and some, for each, in a checking account.  When Paul retired as Treasurer of the Fund after last year's annual meeting, Bob and I began the transitional process of establishing checking accounts convenient to me, and getting signature authority for me for the Fidelity accounts.  The checking account piece was simple.  The General Endowment has a no-fee checking account at Wells Fargo.   The Special Endowment has an account at BBVA/Compass bank.  There was a little misunderstanding there.  I had thought that the "VA" in BBVA was Virginia, and there were also local branches in the DC area.  That's not true; BBVA is based in Phoenix, AZ.  It's 'mostly' no-fee.  IN each case, it was a little more complicated than we had hoped to get Bob added as a second signatory, but it all got worked out, and both banks have good on-line access.  

Fidelity, on the other hand, has been a completely different story.  Man y form-submissions later, all properly countersigned by the Fund's secretary, I am able to view the account of the General Endowment, but cannot even see the account of the Special Endowment.  Bob can see both, because he is a Fidelity client in his own right and they've linked the Fund's accounts to his ID.  But neither of us can do any sort of electronic business with them, and we recently found that he couldn't even bring up online an end-of-year statement for the Special Endowment.  He had to request, by phone, that they send it, Fedex, to me.  So here you have, attached, scanned from their print reports, are four Fidelity statements, two for each endowment, two each for the period Jan 1, 2012 - Dec. 31, 2012. and two each for Jan-Feb 2013.  Bob and I will request the board to authorize me to move our investments to a broker more competent in customer service.  That would mostly likely be my account representative with Morgan Stanley.

Meanwhile, at the Board's quarterly meeting in December, it approved various contributions to close out the year 2012.  But, in December, we were in round three of struggles with Fidelity (getting the printed statements was the end of round four), and we were unable to withdraw funds from there to put into checking to write the contributions before the end of the year.  But Bob is persistent, and ultimately we got checks from Fidelity into both checking accounts, and I have now written checks (from Wells Fargo for General Endowment) or sent payments electronically (from BBVA/Compass for Special Endowment). So I can report that the contributions authorized in December, as listed in the minutes, have not been made:

General Endowment:

• $500 to Boaz and Ruth (Richmond, VA.)
• $100 to Community Council for the Homeless at Friendship Place (Washington, D.C.).  Note that the official name of he organization is "Community Council…" not "Community Center…" as authorized in the minutes.

Special Endowment:

• $1500 to Boaz and Ruth (richmond, VA)
• $1500 to Habitat for Humanity of Washington, DC.
• $1000 to Good Shepherd Center, Baltimore, MD.

The checking account balances following those contributions are

• Special Endowment at BBVA Compass, $2046.03
• General Endowment at Wells Fargo, $3925.00.

The stock markets are up.  Balances you'll see for the end of February are Special Endowment, $96,000+, General Endowment $57,000+.  Income and Expense statements for 2012 will follow.

chuck

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