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Foundation President’s Report
Foundation President Carl Lundgren and Foundation Executive Director Fred Halik reported to the Academy that the Foundation has distributed over 250 grants in its nine years of activity, and has provided essential financial support to organizations providing direct dental care to disadvantaged people. Dr. Lundgren des-cribed some of the programs that have been aided throughout the world where many of the grant program volunteers pay for their own transportation and lodging. This year’s list includes some 30 programs in nine different countries. Before reaching the Foun-dation Board the requests are evaluated by a Committee team under Grants Chairman Gary Lowder.
Foundation President
Carl Lundgren
The Foundation is doing well financially and functionally. Under the guidance of Treasurer George Higue and investment advisor Frank Buchholz, the Foundation is completing its 10th year of growth since the initial $5 million bequest by Dr. Brenes-Espinach in 1994. Since its incorporation in 1986, the Foundation has awarded well over $3 million while still increasing the original Fair Market value to over $7 million. The gains on the Foundation assets have been reinvested at about 6.5% to provide a predictable time availability for our grant awards. The investments have been safely placed and require limited Board monitoring. The Stock Market, however, has been definitely a losing proposition. Five years into the new decade, the Standard & Poor’s 500 Index still is posting a average negative return of a minus 4%. With inflation at 3%, and holding our operating expenses down, the Foundation is still in need of donations to offset these losses.
The Foundation mission, as stated on our Web site, is “to safeguard, increase, and administer the Foundation funds for the advancement of dental practice and the improvement of oral health for the people residing within the regions and Sections of the Academy.” So far, we have distributed more than 720 dental scholarships of $1500 each to dental students throughout the PFA world. This has had a great effect on membership growth, Fellowship participation, and Academy prestige.
Our new Executive Director, past PFA President Fred Halik, has been refining and fine tuning our procedures. This year, we established an internal program where each committee electronically communicates with its members to conduct its functions. This has resulted in a better summarization of ideas and resolutions. Such resolutions are then presented at the Board Meetings by the Chairman for the entire committee.
This year’s group of grant applications is exceptionally meritorious. The number of requests approximates the amount that we must grant by law. 5% of our Fair Market Value must be awarded. Since this value fluctuates, we must obtain accurate forecasts from our CPA firm, Windes & McLaughery. Another market analysis will be conducted after the Annual Meeting so that we can award the proper amount as prescribed by IRS law to keep our tax liability at 1%.
Chairman Larry Barrett has undertaken the position to increase donations to the Foundation that are essential so we can maintain our level of grant donations without dipping into the principal amount and continue to provide more philanthropic programs. He will Chair the “Memorial and Tribute Funds” program that was established at the annual Meeting. So while the Stock Market has shown continual losses for the year, we have a steady income from our federal government bond program that frees up guaranteed profits in time for us to be assured of funding for our scholarships and grants. The large donations in the names of Fernando Brenes-Espinach, General Robert Shira, and past Executive Director Shig Kishi have created a strong core beginning.
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The book, Nonprofit Organization Management, states: “When Board members support their nonprofit foundation financially, it sends a clear message to the community that they believe in the organization. Because Board members are not paid staff, but volunteers who give of their time and money to the nonprofit foundation, their personal donations are a powerful motivator for others to give.” Foundation and Academy Board members will be expected to support the effort 100%.
The American College of Dentists’ program resulted in multitudes of $1000 each donations, some of them paid on a four-year plan. That comes to 78 cents per day, which most dentists can afford. We should do no less. Another dental organization seeking funds for their foundation sent out an expensive mailer to 350 dental suppliers. Their mailer was totally ignored except for one. There are 50 other dental foundations, not including the dental schools also seeking funds, and all of those foundations are looking for the same contributions from the small donor pool.
Bylaws and Policy Chairman Howard Mark has done a remarkable job of rewriting a draft of the Foundation’s Bylaws and Policy Manual. Over the last nine years, myriads of resolutions were approved by the Board and acted on, but nothing was compiled into one document, other than a document that was completed by Bill Kort in 1994.
The public Relations Committee headed by Larry Barrett has resulted in a nice article in the ADA News, which outlines our accomplishments and calls for requests for grant proposals. Additional material has been sent to a large target of dental audiences. Dental World still remains our most prolific and successful means of communications to our membership.
This year, we have a new Treasurer, past PFA President Bill Kort, with past Treasurer George Higue becoming Treasurer-emeritus. Our Audit Committee, Chaired by James Long, has recommended to the Board that we have an accountant’s review by our CPA firm, due to the change-over in officers. This would be in place of the usual compilation that the Academy and that the Foundation usually have performed in the past. That has been satisfactorily completed.
Our CPA firm, Windes & McLaughery, particularly their Senior Partner CPA Donita Joseph that we deal with, is one of the largest and most prestigious accounting firms in Los Angeles County. Our accountant is Maria Bustamante who handles our books. She is a graduate of California State University at Long Beach, having majored in finance and accounting. She is employed by George Higue’s large real estate business and has been with us since our inception. We have also been blessed with a very successful investment counselor in Frank J. Buchholz, Senior Vice President for the Bank of America Private Bank, Banc of America Investment Services, Inc. He has been an investment advisor for Private Bank clients in wealthy Newport Beach, California, since 1995. Frank started in the securities business in 1982 with Smith Barney, then joined the Bank of America (formerly Security Pacific Bank) in 1985. He worked on the trading floor before joining the Private Bank. He earned his Bachelor’s Degree in Business Administration with a minor in Finance from California State University-Northridge in 1974. He holds Series 7 and 63 securities licenses, a principal’s license, and a life and variable annuity insurance licenses. He has enjoyed great success in partnering with Private Bank, and his production has placed him in the top 10 of 800 financial advisors nationwide.
The Foundation invited him to their annual Board Meeting where he presented a half-day seminar on the Foundation investments.
The Foundation’s April Interim Meeting was almost all devoted to discussions and enlightenment of our investment program, and our proper recording of our Bylaws and Policy Manual. That Meeting put us over our operating budget for the year, but it was at the Board’s wishes to complete the business not finished at our annual Meeting.
There are hundreds of volunteers within groups that seek our funding to operate humanitarian programs. It is our responsibility to guarantee funds for such efforts. While the load of patients needing such treatment seems to be a bottomless pit, each treatment is infinitely important to that individual. We have helped to treat thousands. And there will be thousands more.
L-R, CPA Frank Buchhholz and
Foundation Treasurer William Kort
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Academy Board Meeting