Even though the economic outlook for the nation is still uncertain, the Louisiana Baptist Foundation Board of Trustees were met with much-welcomed positive news during their quarterly meeting on April 28.
ALEXANDRIA – Even though the economic outlook for the nation is still uncertain, the Louisiana Baptist Foundation Board of Trustees were met with much-welcomed positive news during their quarterly meeting on April 28.
During the morning Investment Committee meeting, Executive Director Wayne Taylor reported that the assets under management as of the end of March 2009 stood at $129,142,121.
The figure is up approximately $3.8 million in the first quarter of the year. Taylor stated that this was largely due to deposits by churches and Baptist entities into the Short Term Fund. Committee Chairman Brent Cating said he interpreted this to mean that, even though overall market interest rates remain low, the churches and other institutions served by the Louisiana Baptist Foundation continue to have confidence in the management and stability of the Foundation’s Short Term Fund.
Taylor went on to report that the year-to-date returns on the longer term investments of the Foundation’s endowment assets are still showing on the negative side. However, in March, the equity and fixed income investments made a good comeback, and with the gains recorded so far in April, the long term investments for the Foundation should be even or slightly positive by the close of the month, Taylor said
The Investment Committee heard from Lee Morris, vice president of institutional investments for Citigroup Consulting, who serves as the investment consultant to the Foundation. This visit by Morris marked the ninth personal report by Citigroup to the Board of Trustees in the last 2 ½ years.
Morris and his staff are in regular contact with the Foundation staff and have worked with the Trustees to keep the investments of the Foundation on an even keel through the current economic uncertainty.
Morris reported that the end of 2008 marked the worst 10-year period in stock market history. However, because of the overall history of the markets, he still favors equity investments for the long term.
He reported that the individual fund managers employed for the Foundation are doing well against the benchmarks by which their performance is measured. After a detailed review of each manager’s performance, Morris did not see a need to change any of the managers at this time. He also feels that the current asset allocation between equities and fixed income is sufficient for the time, but he and his staff will be monitoring the mix and suggest any reallocation they feel would be beneficial if the markets begin a long term rally.
The Investment Committee adjourned with no recommendations or motions to be made to the full Board of Trustees.
The Operating Committee followed with a review of the 2009 budget activity to date. Despite a tighter budget this year as a result of decreased revenue from investment fee income, the Foundation’s CPA and Controller, Barbara Bell, reported that the Foundation was continuing to carry out its ministry purpose while operating well within its 2009 budget. Through the first quarter the LBF is carrying a net surplus from its operating activity.
Planned Giving Director Jerry Love shared with the committee that a number of wills had been completed during the first quarter. These wills, prepared for both pastors and laypersons, designate a portion of the person’s estate to a church or another Baptist ministry. Love has also been working with a couple who want to donate a small home to the International Mission Board. The home has been received by the Foundation and is listed with a realtor. Once the home is sold and expenses are paid, the net proceeds will be passed on to the IMB.
In addition to these activities, Love reported on four successions in which the Foundation is involved at some level.
The total combined gifts from these estates is expected to be over $700,000 when completed.
During the afternoon board meeting, the trustees heard reports from both committees regarding their meetings held that morning. There were no motions or recommendations presented from either committee. However, Investment Committee Chairman Brent Cating of Lake Charles took the opportunity to compliment the LBF staff for its job during the difficult economic times.
He stated that the staff was the primary reason that the institutions and churches associated with the Louisiana Baptist Convention continue to place their trust in the Foundation.
Since the most recent meeting in January, the Board of Trustees had approved a change in the Spending Policy of the Foundation by using a ballot vote.
A motion was made and approved at the April meeting to ratify the ballot vote. The change in Spending Policy affects how much the Foundation pays to the beneficiaries of endowments for which it acts as trustee. The Board felt the change was necessary because of the impaired earnings from investments during the market’s downturn. The Spending Policy was changed from 5 percent annually to 1.45 percent annually.
The Board will monitor the policy on an ongoing basis and will increase the annual distribution when earnings are more favorable.
No other action was taken by the Board and the meeting was adjourned.
The next trustees meeting is scheduled for July 28, 2009, at the Louisiana Baptist Building.