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Finance Committee Report 6-15

Finance Committee Report
June 21, 2015

Prepared by Bob Gaines

Comments in the May worship sharing on how to hold the funds received from the Baumann estate and the land sale indicated that Friends would be easy using a socially-responsible fund until the Meeting determines how they are to be used.

The Friends Fiduciary Corporation (http://www.friendsfiduciary.org/) is "a Quaker non-profit organization providing cost effective, professional, socially responsible investment management services exclusively to Quaker meetings, churches, schools and organizations. FFC manages over $325 Million in co-mingled funds for 320 constituents across the country."

FFC says "Quaker testimonies and values guide Friends Fiduciary's investment activities in three primary ways:  we actively screen out companies that do not meet our Quaker values investing criteria; we engage in shareholder advocacy by dialoging directly with companies, filing shareholder proposals and voting our proxies, consistent with Quaker values on environmental, social and governance (ESG) issues; and we share our unique, and under-represented Quaker business perspective on important policy issues."

FFC has 3 funds which could meet our needs: Consolidated Fund (a basic balanced fund), Quaker Green Fund (balanced with a focus on renewables and no fossil stocks), and the Short Term Investment Fund.

The Consolidated Fund and the Quaker Green Fund do not have minimum initial investments or withdrawals. The Short Term Investment Fund has a $25,000 minimum initial investment and a $5,000 minimum withdrawal.  All allow immediate withdrawals, which means that the entire amount of the bequest and land sale proceeds could be invested at FFC and be available for Meeting use.

The Green and Consolidated funds are "balanced" stock and bond funds, but because of the high percentage of stocks (70-75%), they would be considered more volatile and thus more risky than an average balanced fund.  However, the return may be higher when the stock market is rising and the economy is performing well.

The Short Term Investment Fund is 97% government and corporate bonds and 3% in a money market fund, so it is much less volatile.  Returns are more like those of CDs.

The committee suggests that the Meeting consider the following:

*Moving all of the bequest and sale proceeds into Friends Fiduciary Corporation -- in addition to perhaps increasing the return, this would also assure those concerned about the integrity of the 2 pools of money.

*Consolidating the Meeting's two money market fund accounts at Guadalupe CU into one account will make it easier for the treasurer to manage our bank accounts without affecting our ability to track Meeting's various designated funds.

If the Meeting decides to utilize the Friends Fiduciary Corporation, the Finance Committee, in consultation with those interested, will make recommendations about which FFC funds to use.

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