Linked Foundation Discussion Paper

AUTHOR’S OVERVIEW
INTRODUCTION: A LINKED FOUNDATION UNDER THE SANTA FE MONTHLY MEETING
ASSUMPTIONS
ADVANTAGES AND DISADVANTAGES OF A LINKED FOUNDATION
GOALS AND POSSIBLE ORGANIZATIONAL STRUCTURES
OBJECTIVES: SHORT, MEDIUM, LONG TERM
FUNDING SOURCES: CURRENT AND SUPPLEMENTARY FUNDS
OTHER CONSIDERATIONS
FIRST PROCEDURES FOR CREATING SUCH A FOUNDATION

AUTHOR’S OVERVIEW

This paper is one of several undertakings by an ad hoc committee of the Santa Fe Monthly Meeting designed to assist members and attenders in planning for the Meeting’s future. The 630 Canyon Road property includes the Olive Rush Studio, a small resident’s building known as “the ramada”, a large garden, selected artwork, furniture, and the Olive Rush archives. These were a bequest of Olive Rush, a founding member of the Meeting, and became the Meeting’s property upon her death in 1966. The Meeting recognized since then that stewardship of an historically significant building (estimated to date from about 1850) requires care and funds.

Outlined here is a common method used by historic building owners creating a 501(c)(3) charitable and educational foundation with the purpose of maintaining, preserving and conserving a unique historic property for benefit of the wider community. In most cases, the property’s owners retain overall control of the foundation by structuring its bylaws through direct and clear “links” expressed in choosing the trustees and maintaining ultimate decision power over major actions of the foundation.

Two main considerations are explored for a possible linked foundation established by the Santa Fe Monthly Meeting for looking after its property. Such a foundation would:

Assume responsibility for maintaining an historically significant property, including buildings, furnishings, artwork and Olive Rush archives;
Address funding responsibility for the long term preservation and conservation of the above using a variety of fund raising methods.

I recognize that over the years the Meeting has experienced frustration with the time, energy and funds needed for responsible upkeep of a unique building. In looking toward the future, the creation of a linked foundation is one avenue which deals with property issues, but with less intense pressures on the Meeting’s monthly proceedings while still maintaining overall stewardship of the property.

INTRODUCTION: A LINKED FOUNDATION UNDER THE SANTA FE MONTHLY MEETING

Over the past several decades, time and energy have been expended in business meetings on issues related to the inherited historic property known by the city and state as the Olive Rush Studio. Issues of maintenance, conservation, preservation and, especially, the desire for expansion of facilities have led to periodic exploration of how best to address issues of an expanding attendance, limited space for First Day School, serving Young Friends needs, and the perceived inordinate time and resources devoted to an historically significant building and grounds.

From the Meeting’s records at the time the property was acquired, an interesting approach was adopted which was intended to reduce the business meeting’s time and attention to physical property issues and make sure that the property was responsibly maintained.

Shortly after the Santa Fe Monthly Meeting received the bequest of 630 Canyon Road and some contents upon the death of Olive Rush in 1966, the Meeting established the semi-autonomous “Santa Fe Friends Meeting House Committee”. The House Committee, as it was known, had three officers: a president, secretary and treasurer. They were charged with managing the property’s rental assets (ramada, guest apartment, main building), maintaining the physical structure and garden, and generally dealing with the long term preservation of the newly acquired property (Excerpt from minutes of 10-30-1966).

The House Committee used rental income (apartment, main building and ramada) to pay insurance premiums, utilities and upkeep expenses through a separate checking account maintained by the Committee’s treasurer. Reports were made like any committee to the monthly meeting for business. Aside from the separate checking account with the First National Bank, there was no formal or legal standing of the House Committee.

It is not clear when this committee was dissolved and property maintenance responsibilities reverted to the monthly business meeting as currently exists. We know that Meeting attendance dropped to only a few stalwarts in the late 1960s and early 1970s, leading to, for example, non-payment of annual dues of $11 for membership in the Acequia Madre de Santa Fe in 1972 which Olive Rush had used to good advantage in developing and maintaining her much-acclaimed garden. However, a separate Meetinghouse Account seems to have survived to at least 1977, but was not maintained by the mid-1980s.

In some ways, this discussion paper reflects the1966 historical precedent of the Santa Fe Meeting House Committee and explores taking it one step further: the advantages and disadvantages of creating a 501(c)(3) charitable and educational foundation of the SF Monthly Meeting, possibly called “The Friends of the Olive Rush Studio Foundation”. However, there is no suggestion here that the Meeting itself become an IRS registered 501(c)(3) incorporated religious foundation.

A key assumption in this discussion paper is that such a foundation would be directly linked to the Santa Fe Monthly Meeting and the Meeting would reserve ultimate decision making power as the owner of the property. That is, the Meeting would not transfer ownership of the property to the Foundation. To use a term familiar in the Santa Fe real estate market, the Foundation would act generally as the Meeting’s property management agent.

ASSUMPTIONS

In developing this discussion paper, several assumptions were made:

--As noted above, it is assumed that the Meeting will continue to retain ownership of the 630 Canyon Road property and contents, allowing for possible leasing to another party.

--The Meeting will have final decision-making on any significant physical changes to the buildings, grounds and disposal of significant furnishings, artwork and archives.

--The Meeting selects the Foundation board which is composed of a majority of members and active attenders of the Santa Fe Monthly Meeting. Others from the community would be, however, also invited to serve on the board.

--The Foundation board would follow Friends decision-making procedures.

--The Meeting can, indeed, find able and willing board members who will commit to the time and energy required to carry out the Foundation’s objectives;

--Funding of the Foundation would come from a variety of sources beyond the Meeting and its contributors.

--Minimal funding would continue to come from donations for use of the meetinghouse and the guest apartment as currently earmarked for the Meeting’s Maintenance Fund.

--The Foundation would assume the assets in the Meeting’s current Maintenance Fund, receive support from donations and expend funds for the maintenance, preservation and conservation activities separate from the Meeting’s finances.

--Despite being linked to a religious organization, the Foundation itself would have a secular, non-religious basis and would not engage in promoting the Society of Friends in Santa Fe or elsewhere.

--The Foundation would possibly, but not necessarily, be dissolved upon the Meeting’s transfer of ownership or lease to another party.

ADVANTAGES AND DISADVANTAGES OF A LINKED FOUNDATION

Advantages.

At the expense of repetition, the main advantages of such a foundation include:

--Relieving the Meeting of dealing with the details of keeping up the Meeting’s property;
--Executing routine and emergency maintenance;
--Arranging for conservation of the buildings’ and other properties’ attributes;
--Planning for long-term preservation, drawing on professional services;
--Seeking funding beyond current donation income levels to carry out the above;
--Ensuring that the property would be adequately maintained and used responsibly even if the Meeting decided to retain the property but move to a new site.

While several of these activities are currently performed in the context of the familiar committee structure, the business meeting is responsible for overseeing and approving a number of actions undertaken by the building committee. Current funding flows from the Maintenance Fund, almost exclusively provided by donations from visitors using the guest apartment, groups using the main building, and an occasional wedding.

A linked foundation could reach out beyond these limited, important resources to those in the wider community interested in distinguished artists’ studio preservation, other foundations, and grants for specific preservation projects. An example of the last was a NM State Preservation Office grant in the late 1970s for repair and restucco of exterior walls. The expanded scope for receiving funding available to a foundation not specifically involved with religious activities is an advantage which the Meeting per se cannot claim.

Disadvantages.

One of the main disadvantages of a foundation is that a more intense effort to maintain and upgrade the facilities requires more time and professional expertise in carrying out the Foundation’s objectives. This increased effort will require enhanced funding and this would likely have to come from external funds.

There are also possible disagreements arising between a more aggressive foundation program, operating in semi-autonomy, and individuals in the Meeting who might disagree with foundation decisions. The current business meeting structure with a building committee allows for universal input into even minor decisions related to the building and property generally. Executing the handicapped access program devised by the ad hoc ADA committee is an example of how some four years of deliberations led to a successful, relatively minor set of changes. While it would be expected that a linked foundation board would follow Friends’ procedures, there would likely be financial pressures to come to decisions in an expedient manner.

Obtaining external funds from individuals, corporations, foundations and government sources requires skills, energy and time not necessarily found within the Foundation’s board. For a modest foundation, fund raising is often conducted on a contracted basis, which, in turn, requires funds whether or not grants are forthcoming.

In short, creating a linked foundation can lead to:

--Recruiting dedicated board members willing to devote time and energy to the Foundation;
--Obtaining more funding required to go beyond basic maintenance leading to need for increased fund raising within and outside of Meeting;
--Difficulties in finding professionals and skilled craftspeople who appreciate and understand preservation techniques;
--Following Friends procedures may frustrate non-Meeting board members;
--Special attention of time and care in oversight of outside expertise—whether in fund raising/grant writing or in technical areas;
--Differences between Foundation board members and business meeting attenders may arise when business meeting attenders do not approve Foundation proposals and recommendations.

GOALS AND POSSIBLE ORGANIZATIONAL STRUCTURES

Several goals would exist in guiding the work of the Foundation. It is up to the board members to develop the goals and bylaws as well as the organizational structure for approval by the Meeting. Some examples of goals:

The foundation works in a Quakerly manner to ensure the long-term integrity of the historic building, grounds, furnishings, artwork and Olive Rush archives using sound preservation and conservation principles under the overall guidance of the Santa Fe Friends Meeting.

The foundation trustees, mindful of their stewardship undertaking, endeavor to responsibly raise and spend funds in a way which relieves the financial burden of the Santa Fe Monthly Meeting of both routine and special maintenance, preservation and conservation of the Olive Rush Studio and related property.

To accomplish these goals and related objectives, several possible organizational structures could be adopted:

Active hands-on board. This model could be the initial organizational structure. Trustees would adopt present building committee model where they combine hands-on work (minor repairs, routine painting) where possible with use of paid craftspeople when appropriate and/or necessary (licensed electrician to maintain code requirements, specialist carpenter for complex restoration). Trustees would work out division of responsibilities. Additionally, trustees would do the necessary research to seek out grants and write proposals, possibly paying a consultant to complete a complex proposal. Non-Meeting related trustees would be recruited from the community who are interested in the buildings and garden, likely from the preservationist and artist communities.

Fund raising board. Once established, a more traditional foundation role might evolve. Trustees do hands-on work as an option, but emphasis is placed on raising funds. Funds are then used to retain craftsperson to either do necessary work or hire and supervise appropriate professionals. Trustees would use contacts to raise funds beyond the modest flow of donations from guest apartment occupancy and Meeting contributors. Specific projects would be identified and grants sought to carry out such projects.

Board with executive secretary. Trustees would be least involved with hands-on work and meet less frequently than in the above models. A paid executive secretary (likely part time) would deal with day-to-day, week-to-week activities plus following up on funding opportunities on behalf of trustees. This model might evolve over time if the foundation is successful in attracting active community interest and funding sources.

In addition, other specialists would likely be retained to deal with foundation reporting and legal issues which might arise in addition to fund raising and grant writing.

OBJECTIVES: SHORT, MEDIUM, LONG TERM

Development of objectives is a key exercise for any foundation’s board members in order to provide action plans and convey to prospective donors how the foundation will meet its goals. However, to assist in thinking through a possible Meeting-linked foundation, it is useful to present a few illustrative objectives divided according to a time line ranging from the present to approximately six years.

Short term objectives: within one year and recurring annual cycle

--Assume major financial responsibility for the property of the Santa Fe Monthly Meeting, including paying expenses such as utilities, insurance and repairs.
--Use proceeds from donations of guest apartment users as initial revenue source for paying above expenses and identify additional, immediate funding needs
--Conduct comprehensive inventory (verbal and visual) of property for insurance and record keeping purposes
--Determine need for more precise property boundary survey and, if affirmative, contract for survey
--Scrutinize buildings and immediate vicinity and record various levels of maintenance and conservation needs with timetable for completion and accompanying budget needs
--As part of above, identify any safety issues which need immediate attention
--Record status of garden areas and create plan for garden maintenance, including tree pruning, hedge trimming, pathway improvements, etc.
--Devise check list of necessary maintenance tasks and monthly timetable throughout year for doing tasks, estimating donated and paid services required
--Determine expert and semi-expert needs for all of above and build items into annual maintenance budget
--Identify possible additional revenue sources to meet estimated budget, including purchase of specific items (benches, chairs, garage doors)
--Maintain regular inspections of guest apartment and ramada interiors, including Meeting-owned furniture, appliances, etc.
--Assess periodically any enhanced security needs and act upon such needs as required

Medium term objectives: within next three years.

--Conduct conservation needs survey of interiors (e.g., walls, floors and movable properties such as paintings) with list of priorities;
--Use priorities list to develop project proposals which are eligible for external funding;
--Research funding possibilities for several conservation projects, including both external and internal sites
--Develop action plan for improved energy savings and environmental enhancements, including buildings and garden;
--Enhance relationships with various local and state historic buildings preservation groups;
--Identify individuals outside of the Meeting who are possible contributors to the Foundation.

Long term objectives: within next six years.

--Identify and budget for major preservation projects which require extensive expertise, materials and labor;
--Conduct any consultations with the city’s relevant staff, as needed for the above;
--Develop fund raising campaign to fund both projects and contribute to an endowment fund;
--Complete garden plan which is based on water conservation;
--Research historic status and possible national recognition.

FUNDING SOURCES: CURRENT AND SUPPLEMENTARY FUNDS

This is a central item for comprehensive research, even if the Meeting decides not to form a linked foundation but continues its ownership of the property. The assumption here is that the Meeting decides to form a linked foundation and maintain long term retention of the property.

There are many questions which guide the funding research questions:

--Does the Foundation want to establish an endowment from which annual earnings would be used as income?
--Are funds needed for one or more projects which have specific objectives plus a beginning, middle and end?
--After examining the past few years of routine maintenance and operational costs, what is minimum annual amount needed to keep the doors open?
--Similarly, what are the average incomes from donations for guest apartment users and groups?
--What has been the fund raising experience in recent years within the Meeting?
--Given a priority list of preservation and conservation project (e.g., artwork, interior walls, adding solar heating), what are likely funders (i.e., preservation foundations, corporation linked foundations, family foundations, individuals, government-related funds)?
--Are there other uses of the property which could bring in added income, such as a venue for small workshops, seminars, and more groups meeting regularly?

OTHER CONSIDERATIONS

There are uncertainties in the local and national economy which could reflect negatively if a linked foundation of the Meeting is searching for discretionary funds--a key function of the Foundation. However, at this time, the Foundation would be looking for a series of relatively small sums to accomplish modest projects. This small scale funding could be attractive, especially when tied to subtly recreating an historic building into a more environmentally friendly, so-called “green” building while still maintaining its historic integrity.

With a track record, it should be possible add developing an modest maintenance endowment as part of the Foundation’s portfolio, especially attracting funds from individuals’ estates planning and honoring past members. This endowment effort would require fund raising dexterity and sensitivity by one or more Foundation trustees.

As this is being written, the newly formed South Santa Fe Worship Group has gone ahead with forming its own 501(c)(3) foundation, presumably to allow for clear cut tax deductible contributions and be able to hold and sell property. The group has had considerable success in raising funds in a short period of time to allow it to look for existing buildings and a location for a newly built building. The implications of this development for the future of the 630 Canyon Road property are unclear at this time. It is the task of the Monthly Meeting to make a number of pivotal decisions which will then disclose what the future will be and whether the sort of foundation outlined above has relevance. However, this new development has come after consideration of a linked foundation was initially discussed and therefore the following section remains appropriate in the context of this discussion paper.

The role of the current trustees whose positions originated in the 1961 Agreement is discussed in detail and their role is defined and accepted in a business meeting minute.

FIRST PROCEDURES FOR CREATING SUCH A FOUNDATION

The Meeting provides a thorough airing of the issues, the pros and cons, prospects of success and examination of implications for the Meeting in forming a linked foundation to deal with the Meeting’s property. Obviously, a decision not to proceed with forming a linked foundation stops the process.

If a positive decision is made to further investigate forming a linked foundation, an ad hoc committee of two or three would begin to lay out all of the details which go into submitting an application for 501(c)(3) charitable and education status to the IRS and obtaining non-profit status with the NM State Regulation Commission. Draft documents, including by-laws, are drawn up together with financial plans.

A thorough evaluation of the issues and clarification of the implications for the above draft documents are examined by the Meeting, probably by a non-decision making threshing session.

The results of the discussion at the threshing session are brought to business meeting and a decision to proceed, proceed with modifications, or not to proceed is taken by the business meeting attenders.

The ad hoc committee proceeds to act on the results of the business meeting, making modifications to the committee’s draft documents if necessary.

The final drafts are submitted to the various formal agencies (IRS and PRC) and, following actions by these agencies, the committee either makes modifications or notifies the Meeting that the way is legally clear to develop the linked foundation.

The ad hoc committee recommends board members to the Meeting and when the specified number are chosen, the board members meet for their organizational meeting under initial guidance from the ad hoc committee who serve as an initial advisory committee to the board in the event they are not part of the Foundation’s board.

Upon formal status and officer selection, the Foundation’s treasurer establishes a working relationship with the Meeting treasurer and a memorandum of understanding is developed which lays out the responsibilities of each treasurer’s duties and their relationship vis-à-vis various operational budget items, both income and expenditures. A separate bank account is established by the Foundation, tax exempt certificates are obtained from the NM Taxation and Revenue Department and a mail address for the Foundation is put in place (previously determined for filing of documents).

A press release is created and sent to various presumably interested parties, including the Historic Santa Fe Foundation, Cornerstones, IMYM, the City of Santa Fe’s Historic Design Review Board chair and staff, various neighborhood and membership organizations interested in historic preservation, the State Historic Preservation Office and others as appropriate.

All of these steps above are reported in the Meeting’s monthly newsletter.

__________________________
The writer serves as SF Friends Meeting archivist and a building committee member. He has also served on two previous Meeting ad hoc committees related to the 630 Canyon Road property: exploring a new structure on the property, and the handicapped access committee. He was a founding trustee and past chair of the New Mexico Library Foundation (originally linked to the NM Library Association).