Setting Up a Foundation

Reason #10 – November’s not really that far away.

Even though summer’s just begun, we’ll all only get busier as the year goes on. Don’t let the Southeast’s premier event for grantmakers get lost in the shuffle. Register now to secure your spot and check it off your list.

Reason #9 – The “Clash of the Titans” is for real.

Right now, there are two strong opinions in our sector about what foundations could and should be doing. How that conversation develops will doubtlessly influence how federal and state policies about philanthropy are shaped. No one represents the two sides of the debate better than Pablo Eisenberg and Dr. Leslie Lenkowsky. These two thought leaders will go head to head at the SECF Annual Meeting — and you can have a front row seat. 

Reason #8 – It’s better than having a crystal ball.

The SECF Annual Meeting follows immediately on the heels of what will to be a very critical election. You’ll hear the “morning after” impressions from experts about what the results could mean in terms of legislative policy for philanthropy, investment strategies for foundations and the short and long-term future of grantmaking.

Reason #7 – The Great Recession’s not over yet.

Things may be looking up, but we’ve still got a long way to go. At the SECF Annual Meeting, you’ll learn new strategies for tackling the full suite of recession-related realities — from internal investment approaches to ways to develop a community workforce and jobs.

Reason #6 — Powerful philanthropy starts with meaningful conversation.

There’s no place like the SECF Annual Meeting to gather with sector-leading peers in a format that encourages open, honest communication. In fact, the exchange of ideas in hallways and elevators alone has sparked ideas that have changed communities. Although we can’t promise everyone a life-changing moment, we can guarantee you’ll leave with plenty to think about.

Reason #5 — The Gulf Coast gets our support.

SECF secures meeting sites years in advance, and at the time we set this year’s Annual Meeting in Mobile, Alabama, no one could have foreseen the disastrous oil spill that now challenges the Gulf Coast.  While we wish the spill had never happened, we’re heartened that we have a chance to help by visiting the region, helping to generate revenue for the community, and learn about the role foundations will play in the ongoing recovery efforts.

 
Reason #4 — We ditched the stuffy dinner.

Conversation is key. Instead of plated entrees and podiums, we’ve heard the call for more informal networking — loud and clear. This year we’ve replaced the chairman’s dinner with a grand, Southern-style reception. We’re talking heavy on the hors’deouvers and mingling, and light on the interruptions. In fact, we’ve minimized the talking heads and stuffy panels throughout the entire Annual Meeting, and emphasized the opportunity for more discussion, interaction and collective reflection.

Reason #3 — Mobile invented Mardi Gras.

That’s right. Mardi Gras began in Mobile, Alabama, and the spirit of celebration and hospitality still imbues this beautiful city, along with great restaurants, breathtaking architecture and plenty of galleries and shops. What better place to celebrate and share the great work of your foundation? Although we’ll take a look at the serious issues facing our country, our communities, and our philanthropy, we’ve also made sure there’s time for you to enjoy a taste of Mobile and explore one of our region’s historic gems with your friends and colleagues.

 
Reason #2 — You just might sleep easier, because it’s free.

There’s nothing like a good night’s sleep — and yours could be free! Complete your SECF Annual Meeting registration by July 1 and you could win one free night at either The Battle House or Renaissance Riverview Hotel. All you’ll need to do is show up and snooze. (After a full day of action-packed Annual Meeting sessions, that should be a cinch!)

Reason #1 — All your friends and colleagues will be there.

We know what your mama told you: “If all your friends jumped off a bridge, would you do it, too?” But in this case, we think she’d approve. All of your friends and colleagues are coming together to share ideas, meet new leaders and thinkers, learn from experts and enjoy the fellowship of philanthropy. Shouldn’t you?

Don’t miss out. Learn more and register now. See you in Mobile!

Standards are something that most of us accept as part of our everyday life.  They have become such an integral part of our existence that the average person gives little or no thought to everyday products and services, and how they work.  Standards make modern conveniences possible: light bulbs fit into lamps, electronic files are transferred over the Internet, trains move between states because the tracks are the same gauge, and the list goes on.

The American National Standards Institute defines a standard as "a recognized unit of comparison by which the correctness of others can be determined."  Simply put, standards make life safer and help organizations operate more efficiently.

In spite of the vital role that trustees of foundations play in protecting the economic health of charitable institutions, uniform standards that define how they should perform their fiduciary duty do not exist.  The investment community compounds the risk for donors caused by the lack of a fiduciary standard.  For example, procedures vary greatly from one investment firm to another for selecting and monitoring money managers and the securities in which they invest.  The reason; firms that provide investment advice, manage mutual funds, and offer alternative investing programs have yet to adopt common rules.

Imagine if airplane manufacturers had no standards to guide the way wings are made.  Many airplanes just would not fly and there would be no commercial aviation industry.  Yet tens of thousands of transactions, affecting the accounts of donors and beneficiaries, are handled every day without a recognized standard for managing the investment decision-making process at foundations.

No better example of the catastrophic effect of the lack of standards exists than events of September 11, 2001.  In the communications world, interoperability is very important.  It is a word that describes how electronics equipment exchanges information directly and satisfactorily between devices and their users.  On September 11th, many emergency response agencies were unable to communicate due to the use of different communications equipment and frequencies.  The Department of Defense reported later that hundreds of people died on September 11th due to the lack of a needed communication standard.  Because of the unfortunate lessons learned at the Pentagon and the World Trade Center, local, state, and federal emergency agencies are all looking for universally accepted interoperability standards and equipment to enable radio and telephone communication between responding units.  Sadly, their efforts are too late to save victims of the 9/11 attacks.

While it is unlikely that people will die from the lack of fiduciary standards, the economic threat is wreaking havoc.  Massive fraud cases like the Madoff and Stanford Group’s Ponzi schemes gained their start because fiduciary standards were missing.  Although more subtle, a just as serious danger lurks.  The difficulty fiduciaries have in benchmarking investment firms’ practices, due to the absence of standards, sets up the potential for the depletion of asset values from undisclosed fees and conflicts of interest.

The lack of standards to guide the conduct of fiduciaries is primarily responsible for the uncertainty felt by trustees and members of investment committees.  Confusion and chaos in committee rooms are symptoms of a similar situation that existed on a wide scale right after World War II.  The realignment of nations quickly showed that a less regional and more global economy was forming.  In order to ensure that products and services could move across borders, standardized ways of making them were needed to guarantee their quality.  Just as countries needed standards to make global commerce safe and profitable, so, too, foundations need uniform process standards for its fiduciaries and their investment providers.

Ronald E. Hagan

Chairman of the Board of Directors - The Investment Fiduciary Leadership Council

www.iflcouncil.org

Ron Hagan has served as chairman of the non-profit Investment Fiduciary Leadership Council since 2008.  He is also President and CEO of Roland|Criss which is a Professional Fiduciary Organization serving foundations and pension plans in a named fiduciary capacity.  Ron has a lengthy career in helping trustees develop their oversight skills in the four disciplines for fiduciaries; governance, controls and practices, administration, and investments.  Prior to joining the Roland|Criss team he was a Senior Vice President and member of the Executive Committee of the First National Bank of Commerce where he served as a fiduciary on its Asset Liability Management Committee.  Earlier in his career Ron was a Principal with Booz, Allen & Hamilton.  His duties at Booz, Allen included advising executives of Fortune 500 companies on prudent fiduciary processes.

An article in the January 10 Arkansas Democrat-Gazette, "Transition from Sparks Hospital to Charitable Entity a Long Process," is noteworthy in two respects: it is a great example of a local reporter, Laurie Whalen, reaching out for a larger perspective on philanthropy, setting up a foundation and foundation regulations; and it underscores the importance of having foundation officials who are accessible to the media, willing and capable of explaining philanthropy policy in terms that the average reader can digest and comprehend.

In this instance, Heather Larkin, president and CEO of the Arkansas Community Foundation in Little Rock, offered a very helpful explanation of health conversion foundations, while articulating that transparency and accountability must be hallmarks of all foundations. Kudos to Whalen and Larkin for helping Arkansas citizens to understand the challenges and nuances involved in the creation of the Fort Smith Regional Healthcare Foundation out of the sale of the non-profit Sparks Regional Medical Center to a for-profit health care provider and simultaneously increasing public awareness of the extraordinary benefits that foundations offer their communities.