wfn.org | Foundation Trustees Eye Structure Changes

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16-Nov-95

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 
concluded. 
 
     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 
rate setting. 
 
     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 
reserves. 
                
     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 
consideration. 
 
     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 
trustees.  
 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 
meeting.   

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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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