By Jerry Love, Louisiana Baptist Foundation Planned Giving Director
ALEXANDRIA – The Louisiana Baptist Foundation held its quarterly Board of Trustees meeting on July 27 to review the operations and investment returns for the second quarter of the year.
After an opening prayer by Travis Morehart, a trustee from Shreveport, Investment Committee Chairman Brent Cating of Lake Charles turned the meeting over to the Foundation’s investment consultant. Lee Morris, Managing Director of Graystone Consulting, addressed the Investment Committee via video conference from North Carolina.
Morris, who has been the Foundation’s consultant since 2002, briefly reviewed the last several years of fluctuation in the overall stock market.
The year 2007 saw good returns followed by the severe downturn in 2008. The year 2009 presented a nice recovery from the losses in ’08, while 2010 started off positive but suffered a pullback in the second quarter. The early weeks of July have shown a rally that offset the earlier contraction. Most of the analysts employed by Graystone expect the remainder of the year to be positive.
Morris reported that leading economists disagree on the direction of the market over the next several years. Some say it will falter; some say it will hold in a trading range and remain volatile.
Only a few say there will be a long-term recovery. Most agree that the next 12-18 months the equity market will be sluggish, mainly due to concerns over the debt load of the U.S. government as well as that of individual states.
Returns on the assets under management with the Foundation were mixed. Fixed income investments performed well showing a positive return of 7.29 percent through the end of June.
Equities, however, did drag the returns down during the recent quarter, causing the Group Investment Fund (a mix of bonds, preferred stock, common stock and other investment vehicles) to show a negative return of approximately 2 ½ percent for the year to date through June. It was noted that a rally in the market during the first weeks of July had erased the earlier losses in the portfolio.
In action by the investment committee, policies regarding investments in preferred stocks were approved. Also, a motion by Wayne Hunt, pastor of Coteau Baptist Church in Houma, to liquidate the LBF holdings in an alternative equity fund was passed by the committee.
Though the alternative investment has been helpful to the overall returns, the illiquidity and difficulty in accounting for the investment did not make it a good fit for the investment portfolio of the Foundation.
Operating Committee Chairman Anthony Bunting of Pineville led discussions on the operations of the LBF since the last board meeting.
Barbara Bell, CPA/Controller for the Foundation, reviewed the financial statements and budget for the committee. Her comments reflected that due to greater than expected income and careful management by the staff, the Foundation is operating well within its budget for the year.
Also, Planned Giving Director Jerry Love reported that even though current giving to ministries through the Foundation has been down, more people are looking at long term planning to provide gifts to their church or other Baptist entities.
After a discussion led by Executive Director Wayne Taylor, the Operating Committee approved updates to the Operations Policies and Asset Management Agreement of the LBF Short Term Fund.
These changes are part of an ongoing process to review and strengthen LBF policies in light of the recent economic situation. Implementation of the changes will come in the near future.
After a break for lunch the Audit Committee convened led by chairman Travis Morehart.
Ernest Sasser, CPA with Payne, Moore and Herrington, LLC, presented the annual audit of the Louisiana Baptist Foundation’s operations. Sasser commented that the audit offered an “unqualified opinion” of the Foundation operations, meaning that there were no problems or exceptions found in the accounting practices and financial dealings of the LBF. The Audit Committee, as is customary, took a few minutes to meet privately with Sasser to allow opportunity for questions or concerns without staff present. After this brief executive session the committee approved a motion to accept the 2009 audit.
The afternoon session of the full Board of Trustees was predominantly devoted to reviewing and revising the current by-laws of the Foundation. The LBF Charter was revised in 2008 and updates to the by-laws are necessary to keep the two governing instruments in agreement. Final revisions will be presented in October.
In other action by the Board, all motions presented by the Investment, Operating and Audit Committees were approved with no exceptions.
The next scheduled meeting for the Louisiana Baptist Foundation Board of Trustees is Oct. 26. To learn more about the work and ministry of the Louisiana Baptist Foundation and to see a list of current Trustees, go towww.LBFinfo.org.