By Jerry Love, Director of Planned Giving
ALEXANDRIA – The welcoming of new members, updates on investments and the approval of a motion to upgrade software highlighted the first quarterly meeting of the Louisiana Baptist Foundation Board of Trustees meeting Feb.7.
Deville’s E.L. Paulk, chairman of the investment committee, began the morning session by having LBF Executive Director Wayne Taylor discuss his work with the Graystone Consulting to reallocate a portion of the Large Cap portfolio from active management to passive management, a move approved in October.
Lee Morris, Investment Consultant with Graystone, reviewed the investment holdings and performance for the final quarter of 2016 and reported the US Domestic Equities as a whole ended the year strong after a rocky start to the year.
In January, domestic equities were down by approximately 12%, then rallied to the point of being positive by a modest 2% before the election, and finished the year with a 12% gain. Portfolios that were actively managed, in general, were positioned for a presidential win by Clinton and lagged their benchmarks after the Trump victory.
He said active management will likely continue to underperform passive management due to the fact it takes time adjust and realign portfolios after unexpected news impacts the market.
Morris reported fixed income securities were mostly positive for the year but struggled after the election in an environment of rising interest rates. Morris also expects the Federal Reserve to raise rates 2 to 3 times by the end of the year which will make it difficult for fixed income portfolios.
Morris did not recommend any changes in management or new asset allocation. He said the Foundation should continue the gradual reallocation from active management to passive for the domestic equity portfolio.
Barbara Bell, CPA and controller for the Foundation, reviewing the account holdings for the year ending 2016.
She reported assets under management as of Dec. 31, 2016 were $165,188,580, an increase of approximately $850,000 over year end 2015. She also noted there are 2,005 individual accounts managed on behalf of Louisiana Baptist churches and organizations and since the founding of the Foundation in 1944, more than $125 million has been distributed to Baptist churches and ministries.
The investment returns for the major components of the LBF portfolio for the year end 2016 were as follows:
— Short Term Fund: 0.59% Annualized Yield
— Group Investment Fund, comprised of various market sectors: 4.44% total return.
— Diversified Income Fund, conservative income-oriented fund: 2.27% total return.
Later in the morning, Taylor updated the operating committee on the strategic plan for promotion in 2017. The plan is based on hosting lunch or dinner meetings with pastors in targeted associations, then making presentations in churches to encourage giving to support Baptist ministry.
Taylor also reported the LBF will continue to use “Give A Gift” to illustrate how the Foundation assists Baptists with gifts supporting Baptist churches and causes. There will be a slight change in the Give A Gift promotion as it will be awarded on a quarterly basis in the amount of $1500 per quarter. For details and rules go to www.baptistmessage.com/give-a-gift-2/.
An in-depth discussion, led by Taylor, regarding upgrading the LBF accounting software also took place. An opportunity presented itself to have the Pooled Accounting System (PAS) software, which is the Foundation’s proprietary system developed in 1999, upgraded to a current platform and fully supported by a development/support company.
After weighing their options regarding PAS and a different system that has been under consideration, trustee Gray Kitchens, Bossier City, made the motion to authorize Taylor and board attorney Jay Bolen to navigate the transition process. The motion passed.
Jerry Love reported total new gifts received by the LBF during 2016 were $1,667,600. It was somewhat lower than average which can most likely be attributed to the last year’s two severe flooding events.
During the afternoon, Board President Waymond Warren, West Monroe, led a review of the information presented by the Investment and Operating Committees in earlier sessions, and the board approved the single motion from the operating committee regarding the accounting software contracts. No other business was on the agenda.
The board welcomed three new members: Pat Lacour, Pineville, Brian Wells, Jennings and James “Buddy” Hampton, Greenwood.
The next meeting is scheduled for April 25, 2017.