Money
Fall 2008 Update on F4DC’s Money, from Marnie
These days, it seems rare to get timely information, especially about money matters, from agencies and organizations. Yet, at F4DC, we think that transparency – the practice of proactively sharing detailed and accurate information with the public – is a key hallmark of authentic democracy. If the community doesn’t have ready access to solid, understandable information, we can’t be sure whether our institutions are living up to their billing, can’t hold them to account in any real way. Nor can the public engage in informed debate and decision-making about the value of those institutions to the community or the direction we’d like them to go in.
In an effort to practice what we preach, this webpage is the place where we talk turkey about money. Here’s the latest scoop on F4DC’s money – how much we have, where it came from, and where it’s being spent.
You can see on our Balance Sheet and our Statement of Financial Income and Expense that as of October 31st, we had received only a small portion of the money that will ultimately come from the estate of W.H. Thompson (my Dad). This year, we received $354,000 from Dad’s estate, out of a total that we expect will amount to roughly $5 million (though this figure is hard to pin down, given the state of the economy these days!).
“Why is it taking so long?” you might ask. It’s because of the kinds of investments that my Dad made, which were mostly not in the stock market or other publicly traded instruments. He mostly invested in privately arranged loans to commercial real estate developers, start-ups of companies making medical devices, that kind of thing. We can’t get the money in these kinds of investments “on command.” We have to wait till the loan agreements become “liquid,” or pay off in the form of cash. And then we have to wait a little while longer while the estate settles this aspect of its business and pays off its various beneficiaries, of which F4DC is one.
It’s going to take a number of years for the estate to be made liquid and settle, and it’s going to happen in stages. With the economy in the condition it is in, it’s hard to know how long this will take, but we estimate about 5-7 years, with a good portion of it coming in the next 1-3 years.
Of the $354,000 we have received so far from the estate, we spent about $135,000 this year, making grants and just running our basic operations. You can see where we spent it on the Statement of Financial Income and Expense. The biggest expenses are for paying our four staff members, the next is grants, and the next is operating expenses (supplies, printing, etc.).
What isn’t on these statements (but will appear on the one we put up at the end of the year) is $30,000 more in grants made in November – see the list of new grantees!
You can also see on the Balance Sheet that we have purchased almost $25,000 in computer equipment, software, furniture, and other equipment. This stuff constitutes our so-called “fixed assets,” and we’ll be using it to get our work done for many years.
The money we haven’t spent yet (about $240,000 as of October 31st) is currently sitting in a money market account, earning a little bit of interest. We need to have relatively easy access to this money to cover our expenses and grants in the coming months, which is why it is not being given away or invested in longer-term kinds of things.
As F4DC gains access to more of the money in my Dad’s estate, we – F4DC’s Finance Committee and Board – will be struggling with whether and what kinds of investments to make. Here’s a key question:
Is it possible to earn a little income on the money, while also feeling like the money is being used to improve the quality of life on this planet?
We’ll keep you posted about the thinking of the Finance Committee and Board as we struggle through this hard question.
In the meantime, what do you think about the way we are spending and investing our money so far? Let us know at info@f4dc.org!
Marnie Thompson, November 13, 2008
Introducing F4DC's new Money section!
"Welcome to F4DC’s new “Money” section! We’re just getting this virtual resource going, so all we’re posting now is a copy of our 2007 990-PF and our 2008 990-PF. “Your what???” you may ask."
A 990-PF is the rough equivalent of an annual tax return. All non-profits have to file a 990 with the U.S. Treasury (the daddy of the IRS). Foundations like F4DC have to file a special, longer version called the 990-PF (PF stands for private foundation).
By law, non-profits and foundations have to make their 990s available to anyone who wants to see them. That's so the public can figure out where the money is coming from, where it's going to, who is getting paid what kind of bucks, and so on. The theory being that if the public knows this kind of stuff, they can evaluate whether we're doing work that deserves that special tax-free status, and if not, hold us to account.
So here it is – read it and decide for yourself whether we are living up to our billing. This 990-PF is for our first, partial year of existence, when we were just getting off the ground. Lots of start-up costs ñ mostly legal fees (!) related to getting ourselves incorporated and approved by the Feds as a 501(c)(3). No grants made in 2007 ñ it took till 2008 before we figured out how to do it in a fair and fun way and hired staff to make sure the process could move forward. Next year's 990-PF is going to be a best-seller, by comparison!
Making our 990-PF form publicly available has to be just the barest starting point of transparency about money. We think the public deserves to know a whole lot more! That's part of the reason we added this new section on our website. In the future, look for our efforts to provide reader-friendly accounts of where the money came from and what it was spent on.
For example – some of our money last year came from an inheritance that included shares of stock in Halliburton and Exxon-Mobil. Who were the folks and what parts of the natural world actually "made" that money ñ through contributions of sweat, intelligence, and resources? We're working on some new ways of "keeping track" that include these kinds of things ñ not just the usual balance sheets and profit and loss statements.
In addition to being transparent about F4DC's money, we think the topics of money and philanthropy should be discussed more openly, more often, and by more people. So we hope this Money section will become a source of critical thinking, ideas, and exploration of such questions as:
- Is money inherently bad, good, or neutral?
- How come some people have so much money, and more people have so little?
- Can money that was "made" through exploitation ever be "made good" by spending it on wholesome, healing things?
- What would you do if you won the lottery and received $10,000? $100,000? $1,000,000?
- How sustainable is this whole philanthropy thing anyway?
