Attacking The Minuteman Foundation

In the past, I have expressed some concern over or interest in the practices of The Minuteman Foundation. For example, one had to do with the right of donors to designate or allocate their gifts for a particular purpose, while another had to do with the practice of filling trustee positions with members of the Community Service Club, a clear conflict of interest I thought. I’m sure at one time or another I’ve even asked, “Why not give more.” In doing so, my purpose was always directed at the prospect for altering the Foundation's future behavior. In response, the president of the Foundation, Favil West, would attempt to address my concerns, typically to my satisfaction, sometimes not.

Before proceeding, though, I would like to take this opportunity to publically commend and congratulate Mr. West for his generous and worthwhile efforts in behalf of the Foundation. From my perspective, I believe his practices and motivations in administering and leading the Foundation have been exceptional and unassailable in all respects and the Community owes him a debt a gratitude for such dedicated service. Frankly, were it not for the special and dedicated efforts of Mr. West, many would concur there would be no financial support mechanism in place to assist in meeting the needs of the truly needy in our Community.

Obviously disagreeing with the above assessment, this past week someone sent a letter to Community leaders, Club presidents and others attacking the practices and current leadership of The Minuteman Foundation. The author of this attack, who I consider to be misinformed, as well as pursuing what appears to be a personal vendetta, has engaged in an attack that is designed to discredit and malign those who are in charge of managing the Foundation. In so doing, our letter writer has called on residents to stop supporting the Foundation, asked the Association to remove the Foundation from SCA-owned property, called on the Trustees to dissolve the Foundation, and, finally, called on others to establish a new foundation with a different name. I say “someone” since the four-page letter was unsigned and the author is unknown.

In support of the attack against the Foundation, our letter writer makes only two points that deserve some response. Other potential points that were raised were considered by me to be too frivolous and are not addressed here. For the record, I see no value in publishing this letter. Here are those two points:

• Too much cash on hand.  The liquid assets of the Foundation amounts to about $284,000. The question is, “Why is the Foundation retaining so much cash and not distributing this amount?”
• The low gift to income ratio.   The gift to income ratio is too low, roughly 8%, or said another way, for every net dollar received, the Foundation has retained $0.92 and has distributed $0.08 to the Association or to the Community Service Club.

The real question is whether either of these points of potential concern, along with the author’s innuendos of potential impropriety, amounts to something of substance or not. The simple and straight forward answer is an unequivocal and resounding, “No.”  In my view, none of the alleged points raised by the author is worth the effort that has been expended, let alone to provide any justification for the drastic actions that our letter writer has recommended to others.

Since all this fuss and call for action is actually a fuss over nothing, one must ask, “Why?” Perhaps our mystery author has been misguided in his quest or has been misinformed about the practices of the Foundation. Perhaps he or she has failed to make any relevant inquiries to ascertain the facts, instead drawing conclusions and making inferences that are clearly flawed and have no real basis or foundation. Or perhaps the explanation is more simple, such as our author having lost a measure of trust or faith in those that govern the Foundation for reasons that are not quite clear. Unfortunately, we will not find answers to these questions here.

While not affiliated with the Foundation and not speaking for the Foundation, I will attempt to offer my two cents worth on the alleged seriousness of the charges being alleged. First, our mystery author, based on his or her review of the financials of the Foundation, would have us agree with him or her that those who are in control of The Minuteman Foundation are either stupid, as in they do not know what they are doing in administering the Foundation’s assets, or they have malevolent intentions, or some combination of the two. Since I dismiss latter out of hand, that leaves us with the “stupid” explanation to address the “cash on hand” and the “low giving ratio” issues.

Admittedly, some in the Foundation and some in the Community Service Club might be a tad uncomfortable in having these more sensitive issues raised. Arguably, the interests of the Foundation and the interests of the CSC may not always be in sync with each other when it comes down to real question of whether and how much giving is required to meet the needs of the truly needy. With the Foundation holding on to the purse strings and the potential financial needs of the CSC always tucking away at those purse strings, real challenges and potential obstacles lie ahead. For reasons that are spelled out below, the Foundation is not readily disposed to open up their coffers to meet just any need of the truly needy. How much is enough will always be an issue for the Community to answer.

The cash on hand issue and the low ratio of giving issue are really two separate matters, although our mystery author would like us to think otherwise. For example, our author suggests that the money sitting in the bank is really available for giving to the needy. And, to a large extent, it is available. Technically, it’s possible to just give away a hundred or two hundred thousand dollars. Or, the Foundation could give away $20,000 a month with no problem, that is, until the Foundation’s coffers run dry after about a year. With that, five years of accumulated donations would be out the window. Doing so would clearly impact and greatly alter that low gift giving ratio. I’m sure some day, the Foundation would like to be able to do just that, that is, give out larger amounts of money to meet the needs of the truly needy in our Community. But that takes patience, fortitude and the accumulation of an invested endowment to bring that about.

Since the low giving ratio is a consequence of the amount of money in the bank, we need to understand why that amount in the bank is what it is and why it’s in the bank and is not being disbursed as gifts. But first, homeowners need to understand what the Foundation has been doing. In looking at the financials, one gets the impression that the Foundation is giving money to both the Association and to the Community Service Club. Insofar as the Association is concerned, some if not all of that giving is what I call pass-through giving. Say, for example, I donate a $5,000 computer to the Foundation and the Foundation then gives that computer to the Association’s Communication’s Department for their use in Channel 99 productions. I might then be entitled to a charitable deduction for IRS purposes.  

The other type of giving is to fund the various activities of the Community Service Club. In fact, all of the financial needs of the CSC are met through the giving by the Foundation. That’s the only reason the Foundation exists. Said another way, there are no financial needs of the CSC that are not being met by the Foundation.

Now, getting back to the money in the bank. While there may be other reasons, an overriding reason for having money in the bank is to provide for the Foundation’s future stability as a charitable organization. As with any charitable organization, while with issue of giving is important, the greater issue is one of being able to give over the long term. That is why charitable organizations seek to have an endowment, one, frankly, that is large enough to sustain a certain level of giving without the need to ever draw down the invested principle.

Ideally, I’m told that the Foundation’s endowment should be at a level that is three or more times what it currently has accumulated and invested. The amount that will be needed, of course, is a judgment call by the trustees. Only by creating an endowment of sufficient size can the Foundation expect to provide the Community with the level of giving that will be needed by the Community Service Club as our population stabilizes and ages.  

Ultimately, what the Foundation needs to achieve is the ability to sustain a level of giving that will greatly enhance the potential of the Community Service Club to better address the requirements of the truly needy who are and will be living among us.