Page 35 - 2025 February report

Audit & Risk Committee minutes (draft) (2)
Hugh inquired whether the final payment on Malcolm’s deferred compensation had been made and whether the risk assessment project would have any impact on our 2024 financial statements. Tommy indicated one remaining payment of approximately $22,000 would be made during 2025. This payment will be for the earnings on Malcolm’s deferred compensation payment made during December 2024 since we held the funds for the entirety of 2024. This final payment will impact our financial statements in 2025 since we prepare our financial statements on the modified, cash basis of accounting.
3. ApprovalofDraft2023TaxReturnsPreparedbyTempleton&Company
Buzz had sent Tommy an email with a couple of inquiries regarding the draft tax returns. First, he wanted to know what recommended changes Tommy had provided to John after reviewing the initial draft tax returns. Tommy responded that there were a few minor cosmetic changes to the tax returns, such as the title associated with the person responsible for signing the tax returns (CEO to CFO). He also indicated there was a change to where his compensation was reported (line 13 vs. line 14 of page 1). Tommy did not become an officer of the Foundation until March 2024, so his compensation should have been reported on line 14.
Lastly, Tommy indicated a change in methodology regarding the reporting of our other professional fees (consulting fees) on line 16c. Tommy proposed a change to John, which he believed would more properly allocate the expenses between investment and charitable. John agreed and made the change in allocation.
Buzz also inquired about the need to file state tax returns. Tommy indicated some of our investments report Unrelated Business Income (UBI), which causes the filing requirement for some states.
Hugh inquired about how the Foundation’s administrative expenses continued to compare to our peers. Tommy indicated we continued to be less than our peers, according to FFOG.
The tax returns were approved as circulated.
4. FinancialReports
A. Investment Activities
Hugh noted the title to the report for October 1, 2024 to December 31, 2024 needed to be corrected.
Hugh also noted the various investment redemptions during the quarter, along with $9M in redemptions that will hit in January 2025, were done to fix our cash/fixed income target allocation. According to our Investment Policy Statement, this percentage should be no less than 10%. The adjustments made should get us back to 11% percent or more in January 2025.
Hugh also suggested moving the $450,000 payment to Farallon Offshore II to the column Invested instead of Cap Calls, as this payment is part of an investment commitment.
Hugh commented that we will be increasing our private capital commitments over the next few years, so it is likely our capital calls will significantly exceed our distributions during that time frame. He also noted MAP/Heritage has been part of our portfolio for over 20 years. This investment continues to generate a lot of cash.
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