Published December 11, 2014
It has been my privilege to serve Georgia Baptists over the past 25 years through my role at the Georgia Baptist Foundation. I was hired in 1989 as the Director of Business and Accounting and promoted to Executive Director in 1991. My title was changed to President/CEO in 1992.
Many changes have been implemented over these years. The Foundation was originally chartered as a vehicle to support funding for Christian education in the state of Georgia. The existing Baptist colleges were struggling financially, and endowment was correctly seen as the long-term answer. As the Foundation began to fulfill this role, other institutions began to see the value of endowment as well, and asked the Foundation to manage endowment for them as well as the colleges. This demand grew and grew, and today the Georgia Baptist Foundation serves all Georgia and Southern Baptist institutions, agencies, and causes. Many churches and associations have also begun to take advantage of what the Foundation has to offer as their need for ministry dollars has grown and interest rates have declined. All of this, plus ever-growing donations from Georgia Baptists, helped grow the asset base dramatically.
As the Foundation grew in assets and responsibility to donors and institutions the professional qualifications of the staff have improved. We now have (in addition to myself) three CPA’s, two development officers, a Director of Trustor Services, a donor relations professional, and a highly qualified Executive Administrator who provides comprehensive support for our operations. The staff turnover at the Foundation is quite low, as those called to serve choose to remain for a full career.
Our method of money management has radically changed. Initially broad discretion was given to outside professional money managers in terms of asset allocation decisions and securities selection. Greater use was made back then of outside consultants who lacked a true understanding of who Baptists were. This all changed in 1992 when we reallocated the assets among 6 managers instead of 3, and assigned each manager a specific investment discipline to follow. In addition, we banned investments in companies whose profits came from businesses offensive to Christians. All of this increased the average investment returns and allowed us to adopt a more stable income payout strategy.
The income strategy is critical, because that is the primary function of the Foundation – to remit income to support Baptist causes. Originally the Foundation paid on the interest and dividends earned from the stocks and bonds in the portfolio. As the operations and investments improved, a portion of realized capital gains was added to the mix. That still left uncertainty in the minds of our beneficiaries, as the income they received could vary wildly year to year with overall market fluctuations.
To fix this, in 1992 we adopted what we call a “corridor approach” to income payout. This strategy initially set a payout of 5% of the assets under management. That initial dollar amount would then be increased each year by the average historical rate of inflation. This served to offset the long term degradation of purchasing power of the mission dollars due to inflation. However, we realized that increasing payout every year without regard to performance could be unwise in two ways. First, if the markets performed significantly better than average, the payout could be construed as too small given the size of the assets. Second, if the markets underperformed significantly, the payout could become too large as a percentage of assets. In this case (as one board member put it) we would be “eating our seed corn”.
To alleviate these limitations we decide the set a floor and ceiling percentage for payout. If times were good, income would increase accordingly. If times were bad, income would be capped to avoid spending too much of the assets.
Our accounting system changed to meet these new requirements. The method of accounting for the assets in each trust was changed to resemble that of a mutual fund. This allowed us to automate a significant portion of the accounting function and thus reduce personnel requirements and costs.
During the past 25 years I, and the Foundation as an organization, have been blessed by the assemblage of extraordinary talent in the Foundation staff. Through the skills and abilities of all these co-workers we have managed to refine and streamline our investments, accounting, fund-raising and customer service, growing the assets from $81 million in 1989 to $383 million in 2014.
Of even greater significance are the mission dollars that these assets have generated to support Georgia and Southern Baptist churches, institutions, agencies and causes. After seeing what can be achieved by such endowments, my wife and I were led to establish a trust to help continue the work of the Foundation. This trust will grow in the future as assets are added after we have gone to be with the Lord.
None of this happened in a vacuum. I attribute any success I and the Foundation have had to the leadership of our Lord and Savior Jesus Christ. In addition, I would like to credit the exemplary leadership of those in the Georgia Baptist Convention. Dr. James Griffith and his successor, Dr. J. Robert White, created an environment in which the work of the Foundation could flourish. Each member of the Foundation staff over the years played their part, and our Board of Trustees was always there to provide strategic guidance and support. I am also eternally grateful for the support and counsel of my wonderful wife Pamela, and the support of my daughters Tricia and Katie.
I leave confident that the Foundation is well-positioned to become even better under the leadership of my successor, Dr. Johnathan W. Gray.
Thank you for allowing me these years of service!
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