From the Worldwide Faith News archives www.wfn.org
Foundation Trustees Eye Structure Changes
04 May 1996 20:45:34
95411 Foundation Trustees Eye Structure Changes
by Alexa Smith
LOUISVILLE, Ky.--Propelled by changing regulatory and legal climates, the
board of trustees of the Presbyterian Church (U.S.A.) Foundation voted Oct.
28 to appoint a special committee to study what operating adjustments are
necessary to safeguard the Foundation's future development efforts.
A class action suit filed this year in Texas alleges that nonprofit
corporations issuing gift annuities there are in violation of state
insurance and federal antitrust laws.
"Charities have operated in a milieu 50 years behind the times,"
Foundation general counsel John Keck told the Presbyterian News Service.
He said regulators overseeing charities have often been lax and charities
have found it difficult to keep up with changing standards, which vary
from state to state. "All of a sudden, time caught up with charities," Keck
So as a precautionary measure, the Foundation trustees took immediate
action to modify how the Foundation sets its gift annuity rates and
mandated at least annual consultations with an actuarial firm to review its
Describing the Texas litigation as "just the tip of the iceberg,"
Foundation president Larry Carr insisted the Foundation is poised to
"protect our ability to do the work we have historically done in the
Presbyterian Church." The impending study will determine what structural
changes are necessary.
"We might end up proposing three more corporations or we [might] end
up doing it within the current structure," said outgoing board chair W.
Terry Young of Charlotte, N.C.
Robert T. Cuthill of Mound, Minn., said the Foundation intends to
seek a Lily grant to fund the study.
The special committee will be appointed shortly by the Foundation
board's new chair, James R. Bellatti of Stillwater, Okla., and vice chair
Georgette Huie of San Francisco. It is mandated to bring its
recommendations to the April 1996 Foundation board meeting.
Carr told the Presbyterian News Service the Foundation processes
400-500 new gift annuities annually, totaling as much as $5 million. Of
the Foundation's $1.2 billion assets, less than $50 million are in annuity
In other action, trustees authorized the Jarvie Commonweal Service
Committee to disburse anticipated excess income in the range of $1 million
to the General Assembly's unrestricted mission budget.
"We all feel good about this," said Peggy Nelson, outgoing chair of
the board's finance and audit committee, acknowledging the Foundation's
effort to reorganize the Jarvie program -- established to care for New York
City-area senior citizens -- during the past two years.
The exact amount of excess Jarvie income each year cannot be
determined until the year's end and, according to Nelson, fluctuates from
year to year.
The Rev. James Foster Reese, the first of several interpreters hired
to advance the Foundation's services to racial-ethnic individuals, churches
and institutions, reminded trustees that by the year 2050, racial-ethnic
minority groups will comprise 47 percent of the U.S. population. "[That
figure] has a lot to say to a denomination that is only 5 percent
racial-ethnic and 95 percent Anglo," said Reese.
A search is under way for a Korean-American Presbyterian to fill a
second position. Candidates for a Spanish-language position are also under
In other business, it was announced that Young, Cuthill and Helen R.
Walton of Bentonville, Ark., will be co-chairs of the Foundation's new
Guardian Fund. The fund is designed to increase the Foundation's operating
endowment by $20 million through contributions by current and former
The fund-raising will be conducted by the board itself and not by the
Foundation's field representatives.
A full presentation on the fund is set for the board's April 1996
For more information contact Presbyterian News Service
Presbyterian Church (U.S.A.), Louisville, KY 40202
phone 502-569-5504 fax 502-569-8073
E-mail PCUSA.NEWS@pcusa.org Web page: http://www.pcusa.org
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