The Excelsior Rotary Foundation Board of Trustees Meetin of November 27, 2012 at 
Mount Calvary Lutheran Church

The Meeting was called to order by Chair Don Draayer at 1:36PM at Mount Calvary Lutheran Church on Tuesday, November 27, 2012.  In attendance were trustees Don Draayer (Chair), Jim Olds (Treasurer), Steve Frazier (Secretary).  Absent trustees:  Dave Peterka and Terry Roeser.  Also in attendance: Tim Litfin (Club President).  

Action on Minutes (2.0) was entertained.  The Minutes of October 30th were accepted by acclamation.

Jim Olds gave an abbreviated Treasurer’s Report (2.0).   Jim explained that due to health reasons he is resigning from the Treasurer’s position and the records and all claims for Foundation transactions have been forwarded to Dean Friesen who will assume the responsibilities as Acting Treasurer until a new Treasurer is appointed.  As a consequence of the circumstances the Fund analysis (3.1), Action on Requests from the Club for Charity Expenditure(s) (3.2) and acceptance of the Treasurers Report (3.3) were postponed until the January 22nd Meeting of the Foundation.  Jim did note that the all Scholarships had been previously paid.

Under Old Business (4.0) Secretary Steve Frazier reported on the progress of entering the minutes and other important documents of the Foundation on the website and noted that they will be found under the Foundation site page and in the Club Documents section (4.1).  The difficulty has been converting some of the documents to the format and file size that the website will accept.  Steve will work with the Chair on getting all of the documents converted and stored on the website. 

Next, action was taken to transfer dollars from the Club to cover the Foundation Operating Budget (4.2).   Operational expenses of the foundation include postage, printing costs, soft-wear upgrades and other expenses born on behalf of the functioning of the Foundation.   Jim Olds moved and Steve Frazier seconded that $500 be transferred from the 2012-13 Annual Fund (President Tim Litfin) to the General Fund (Operating Budget Fund) to cover Foundation operating expenses and the motion carried unanimously.

Action on the Annual Checklist (4.3) was taken-up by the trustees.  The Annual checklist drafted by Chair Draayer is a document that helps guide future trustees in the administration and sequencing of required actions and responsibilities of the Foundation in a timeline format.  The Annual Checklist had been first reviewed at the October meeting with the understanding that it would be brought back to the Trustees at the November meeting for action. It includes the required federal and state filings, organizational components and administrative flow of the financial and granting processes as well as investment fund guidance.  Don Draayer moved and was seconded by Steve Frazier to accept the Annual Checklist document as written and the motion passed unanimously.

Next the trustees held the First Reading on the Proposed Changes to Policy #3 (4.4) as modified and updated at the October 30, 2012 Foundation meeting.  The Trustees reiterated their support for the proposed changes including the threshold donations relating to Policy #3, Section 1.3.8 on Other Restricted (Forever) Endowment Funds and specifically subsections that “The initial donation for a restricted endowment fund without the donor’s name attached must be a least $10,000…”  and that “The initial donation for a restricted endowment fund with the donor’s name attached on all treasurer reports and public documents must be a least $25,000…”  Jim Olds moved and Steve Frazier seconded the motion that Policy #3 be revised and adopted with the changes and modifications discussed on October 30, 2012 and accepted as a first reading and the motion passed unanimously.

Under New Business (5.0) Chair Draayer gave his report and update (5.1).  He first discussed the Area 12 Consortium (5.1.1) and noted that $2,000   had been sent to Wayzata for their project and we have fulfilled our commitment to them.  It was also his suggestion that since the other clubs have been contacted by us through him that the Foundation take no further action until money is requested from one of the three other clubs.  He also noted that we now have the original agreement language between the four clubs as a guide for future actions. 

Chair Draayer then spoke about policies needed by the Foundation to meet IRS Scrutiny (5.1.2).   Chair Draayer shared his experience on another foundation and his discovery of a booklet on The Principles and Practices for Non-Profits Excellence.  Don outlined several areas needing policies including the posting and retention of minutes and records, protection from Trustees having conflicts of interest and a manner in which that can be documented and singed-off on by trustees and other policies to protect the Foundation.  The Trustees in attendance agreed with the value of having such policies and Chair Draayer volunteered to write such policies and to bring them back for review at the next regular meeting of the Foundation on January 22, 2013.

The final item of the agenda (which was actually discussed first to facilitate President Litfin’s schedule) under New Business (5.2) was an informal discussion between President Litfin and the Foundation Trustees about the Rotary Club’s interest in exploring ways to invest part of their large funds (i.e., Happy Bucks in particular) and if those funds could be legally comingled with Foundation’s funds on a prorated basis or in some other manner (5.2.1). 

Chair Draayer explained the basic investment practicality with the firm that the foundation uses (North Star Resource Group) that funds under 50K would most likely need to be invested in a brokerage account while over 50K would go into an investment account.  Several ideas were explored:                                                                             – Keep the status quo. – The Excelsior Rotary Club establish an Investment Policy Statement, as the Foundation did last year, and hire its own investment counselor/firm (North Star or other firm), and invest the Happy Buck Funds accordingly. – Co-mingle the Club Happy Buck Funds with Foundation Investment Funds for investment purposes and then disaggregate Happy Buck earnings with the Club Administration having full control over them. -- Transfer the Happy Bucks Scholarship and Education Fund to the Foundation as a General Foundation Fund for scholarships or as a Foundation (forever) Endowment Fund for scholarships with the interest each year being used for scholarships or education grants. 

Don Draayer noted that the advice from Foundation Advisors, Joe Froehling and Gary Thompson, was against, above, that being, to intermingle Club funds with existing Foundation investment funds for investment purposes.  This would be in conflict with IRS policies requiring financial and decision-making distinctions between the two separate organizations.  

Tim Litfin noted that the disadvantage to the Club in doing or would be the loss of total control of those funds by the Rotary Club. 

President Litfin thanked the trustees for their informal input and will take up this discussion with Rotary Board at their January Meeting.  Chair Draayer declined Presidents invitation to help the Club set-up an investment policy because of his current heavy load with the Foundation and also the need to have separation between the two policy making bodies of our Rotary Club but will be glad to informally advise if requested.

There being no other items of discussion Jim Olds moved to adjourn (6.0) and Steve seconded the motion and the vote was unanimous to adjourn until the next regularly scheduled meeting on Tuesday, January 22, 2013 at 1:00pm at the Bayview Events Center.

Respectfully submitted by Steve Frazier, Excelsior Rotary Foundation Secretary