Conference 7.286::dcu

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Note 2.18                      BoD meeting minutes                      18 of 29
ASE003::GRANSEWICZ                                  661 lines   7-SEP-1993 18:43
                -< BoD meeting, July 27, 1993, Discussion->690 >-
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                     DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
                           Board of Directors' Meeting
                                  July 27, 1993
    
    [non relevant text deleted]

   GENERAL SESSION
    
   VII.     COMMITTEE REPORTS (continued)
    
   c. Human Resource Committee
    
   Gainsharing
    
   Mr. Cockburn reviewed with the Board DCU's Gainsharing Plan previously
   approved by the Human Resource Committee.  An outline of the Plan is as
   follows:
            1.  If DCU exceeds the budgeted net income goal (of $3,562,237) by
   $100,000 or more, eligible employees will receive a bonus of 1% of their
   gross salary.
    
            2.  If the net income goal exceeds budget by $500,000 or more,
   employees will receive 5% of the amount in excess of budget in equal
   proportion.
    
            3.  The President/CEO and Senior Managers, as well as employees
   who are not performing satisfactorily, are not eligible for Gainsharing.
    
            4.  In order to release the money before the end of the year,
   December data will be estimated based on the January - November period.
    
   A handout was provided outlining DCU's Discontinued Recognition/Reward
   Programs.  Mr. Cockburn explained that he discontinued these programs
   within his first 3 or 4 months of employment at DCU because they were not
   appropriate for the Quality Initiative.  This new Gainsharing program will
   take the place of the discontinued programs and will better ease employees
   into utilizing the tools of Total Quality Management.
    
   Mr. Milbury requested that the outline should state "if the net income goal
   exceeds the budget by $500,000 or more, employees will receive 5% of the
   amount in excess of the budget, minus $500,000, in equal proportion, in
   addition to the 1% of their gross salary".

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Note 2.18                      BoD meeting minutes                      18 of 29
ASE003::GRANSEWICZ                                  661 lines   7-SEP-1993 18:43
                -< BoD meeting, July 27, 1993, Discussion->690 >-
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                     DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
                           Board of Directors' Meeting
                                  July 27, 1993
    
   [non relevant text deleted]

   GENERAL SESSION
    
   Ms. Ross asked for a consensus for Mr. Cockburn to proceed with the
   implementation of the Employee Gainsharing Plan.  (5 in favor: Mr.
   McEachin, Ms. Dawkins, Ms. Mann, Mr. Milbury and Ms. Ross;  2 opposed:  Mr.
   Gransewicz and Mr. Kinzelman)  CONSENSUS GRANTED.
    

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Note 2.18                      BoD meeting minutes                      18 of 29
ASE003::GRANSEWICZ                                  661 lines   7-SEP-1993 18:43
                -< BoD meeting, July 27, 1993, Discussion->690 >-
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                     DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
                           Board of Directors' Meeting
                                  July 27, 1993
    
   [non relevant text deleted]

   X.       COMMITTEE REPORTS (continued)
    
   c.  Human Resource Committee
    
   Gainsharing (continued)
    
   Ms. Ross noted that, during the break, there seemed to be some questions
   regarding the consensus vote for DCU's Gainsharing Plan.  She recommended
   that a motion be made stating that Gainsharing is considered a compensation
   issue and is therefore under the CEO's authority to implement such a plan.

   *  It was moved by Ms. Dawkins and seconded by Ms. Mann to recognize that
   Gainsharing is considered a compensation issue and is therefore under the
   CEO's authority to implement such a plan.  (Six in favor:  Mr. McEachin,
   Ms. Dawkins, Mr. Kinzelman, Mr. Milbury and Ms. Ross;  and one opposed:
   Mr. Gransewicz.)  MOTION CARRIED.

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Note 2.20                      BoD meeting minutes                      20 of 29
ASE003::GRANSEWICZ                                  455 lines   9-DEC-1993 00:11
               -< BoD meeting, August 24, 1993, Discussion->729 >-
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                     DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
                           Board of Directors' Meeting
                                 August 24, 1993
    
    [non relevant text deleted]

   *  It was moved by Mr. Gransewicz and seconded by Mr. McEachin to accept
   the July 8, 1993, and July 27, 1993, Board meeting minutes.  The
   explanation of gainsharing and the vote taken for its implementation will
   be included in General Session, but all discussion will be included in
   Executive Session to be redacted when distributed to the membership.  (Six
   in favor:  Ms. Dawkins, Mr. Kinzelman, Mr. Milbury, Ms. Mann, Mr. McEachin,
   Ms. Ross;  One opposed:  Mr. Gransewicz)   MOTION CARRIED.
    
   *  It was moved by Mr. Milbury and seconded by Mr. McEachin that future
   minutes are to reflect only action and voting results.  (Three in Favor:
   Ms. Mann, Mr. Milbury and Ms. Ross;  Three Opposed:  Ms. Dawkins, 
   Mr. Gransewicz and Mr. Kinzelman;  One Abstention:  Mr. McEachin)  MOTION
   FAILED.

    In 807.30 Mr. Milbury states:
    
>    gainsharing.  It [gainsharing] is not a profit sharing plan although it
>    was tied to profit in 1993.
    
    But let's look at how Gainsharing defined. First of all a general point.
    The word "Gainsharing". One can only presume that the "Gain" part is
    referring to "Profits". If not can anybody else offer another
    explanation. Now let's look at the "Sharing" part. Gainsharing is
    clearly away of rewarding employees. Therefore the employees are
    "sharing" in something. That something is "profit" ie equity. So I
    maintain "Gainsharing" is another way of saying "Employee Profit
    Sharing".
    
    Now let's get onto specifics. In the definition of what Gainsharing is
    (as presented by Chuck Cockburn).
    
>            1.  If DCU exceeds the budgeted net income goal (of $3,562,237) by
>   $100,000 or more, eligible employees will receive a bonus of 1% of their
>   gross salary.
    
    It is unclear here whether this is part of compensation or a profit
    distribution. If the 1% of employees salary was built into the overall
    compensation budget that was approved by the board I agree that this
    aspect of gainsharing is part and parcel of the compensation package
    and as such is quite rightly under the control of the CEO.
    
    BUT if the 1% was not built into the budget then clearly the 1% is to
    come out of profits for the year. In other words on the income
    statement the 1% should be shown as a dividend distribution in the
    equity section rather than as an expense.
    
    Data is not given as to which of the above scenarios it is. Perhaps a
    member of the bosrd would like to clarify this point.
    
    
    Now let's move on the above rather unclear part to the bit that is very
    clear to me. Specifically:
    
    
>            2.  If the net income goal exceeds budget by $500,000 or more,
>   employees will receive 5% of the amount in excess of budget in equal
>   proportion.

    and the very useful clarification by Mr. Milbury himself:
    
>   Mr. Milbury requested that the outline should state "if the net income goal
>   exceeds the budget by $500,000 or more, employees will receive 5% of the
>   amount in excess of the budget, minus $500,000, in equal proportion, in
>   addition to the 1% of their gross salary".
    
    Here Mr. Milbury is saying that the employees will get 5% of the
    profits over and above (expected profits + $500,000). Since actual
    profits cannot be part of the budget (only budgeted profits) it is 100%
    clear that the intent here is to distribute a portion of excess profits
    to the employess.
    
    Now it floors me totally how the board can then go on to say that
    "gainsharing" is part of compensation when Mr. Milbury himself has made
    iot totally clear that gainsharing is a profit (ie equity)
    distribution totally outside of the budget process.
    
    Now don't get me wrong. I completely back an incentive plan for the
    employess. But I am totally against it coming out of excess profits if
    at the same time the credit union policy is NOT to distribute a portion
    of excess profits to the owners. Both the owners and the employees are
    stakeholders in the credit union.
    
    The equity in the credit union belongs to the owners (that's what your
    $5 share is a stake in). Now for a well functioning credit union it is
    essential to keep a pool of equity (retained earnings) and with the
    current level of retained earnings to grow the equity at a controlled
    reasonable rate. But any profits over and above the amount to do that
    should be distributed to the owners first and the employees second.
    
    I am actually against employees compensation being driven by a profit
    metric. I believe their bonus compensation should primarily be driven
    by metrics much more applicable to their individual jobs. Eg the person
    in charge of the loan portfolio could me measured on growth of the loan
    portfolio. The person in charge of member satisfaction could be
    measured on the number (or rather the lack of) people who close their
    accounts etc. The reason I am against profit as a metric for the
    employees is because a credit union is meant to be a "NON PROFIT
    INSTITUTION". THe measure of success of a credit union is how well it
    SERVES its members, not how much money it makes in profits. In a normal
    company the customers and the owners are two separate groups of people.
    In a credit union they are one and the same. In a way making profits
    above plan is a failure on the part of the management. They should have
    set the rates on their services better such that they came in on plan.
    
    Anyway my bottom line is that I think the minutes of the board meetings
    clearly show that the "gainsharing" plan was intended to be a
    distribution of member's equity. It is certainly not defined in a way
    that it is part of a compensation plan. I'm astounded that the majority
    of the board could look at in this way. Especially when Mr. Milbury
    himself clearly talks about distribution of profit in excess of a
    particular number.
    
    Dave

"Gainsharing" refers to the sharing of gains.  What could a "gain"
possibly be?  A gain is profit, pure and simple.  The meeting 
extracts provided by Dave in earlier notes here make it crystal
clear to me that the intention of this plan was and is to distribute
excess profits to the employees.

There's nothing wrong with this on the face of it.  Personally,
I think that profit sharing should be one element of compensation.
I also think that incentive pay or merit pay based on job performance
or significant contributions to the organization makes sense as well.

We've been told that bonus dividends to the ownership is bad and can't
be done.  We've been told that there is no fair way to distribute such
a bonus to the membership.  Remarks have been made by our detractors
to suggest that proposing bonus dividends as part of a more member-focused
business model threatens the existence of the credit union.  Yet here
what do we have:
    
     a.  A fair way of distributing excess profits to the employees
     b.  Commitment of excess profit to a distribution plan

So, if it's good for the employees, why isn't it good for the very
folks that made the institution so successful - the owners?

The way this SHOULD be done is that employees should gainshare when
the owners receive bonus dividends.  Employees should receive other
incentives, merit pay, etc. based on performance targets that are 
not necesarily always tied to the bottom line.  These distributions
should be exclusive of gainsharing/dividends and should most 
definitely be controlled and administered by management (that is,
the amount should be a budget item in the total compensation 
budget which is approved by the board.  Management knows best which
employees are outperforming and improving quality - that's clearly
*not* a board issue).

I find Mr. Milbury's comments about gainsharing quite surprising
in light of what the board minutes say.

Chris

    To me, these notes miss the point.  You could easily calculate
    the maximum amount of money that might be distributed by this
    plan and that amount could be included in the annual budget
    as part of normal 'compensation'.  I thought the question was
    whether or not the money distrubted under this plan was included
    in the annual budget (approved by the BOD) or whether this was
    additional money.

    Chuck's note seemed to say that the money distrubuted was
    'substantially budgetted'.  Not sure what this meant...mostly
    budgetted (but some excess came from profits)?  or 'generously
    budgetted'?
    bob

�In a way making profits
�    above plan is a failure on the part of the management. They should have
�    set the rates on their services better such that they came in on plan.
    
    That's funny, when this point was made by DCU management and some of
    the board it was dismissed as spin control.

In DCU as a non-profit organization, I believe that there
is a lot to think about when we start tying Employee
Compensation to above-budget capital accrual (sometimes
referred to as "profits", but I'm not sure that the word
profit really applies here).

Sharing the excess capital accrual with the owners/members
makes a lot of sense - it's their money in the first place.

Sharing this money with the employees doesn't make nearly
as much sense (as a long-term strategy).  Why?  Because
it is very dependent on:

  - the budget process
  - the interest rates paid to accounts
  - the interest rates on loans being collected
  - etc.

In fact, there is an incentive to make "profits" at every
step along the way at the expense of a more accurate budget
or better rates to membership.  This really pits the interest
of the owners against the interest of DCU employees.

I'd much rather see a plan that rewards employees based on
how they measure up to metrics that are either

  - specifically tailored to their job

or

  - DEFCU-wide customer satisfaction

Unfortunately, I'm not convinced that the numbers being generated
for customer satisfaction are appropriately arrived at.  In fact,
I'm convinced that they are totally wrong.  Despite this, I think
that this is a better way to go as it *joins* the interests of
employees and owners vs. pitting them against each other.

All that said, I think that DEFCU should stick with Gainsharing for
this year as it was approved and look to make changes in the future.
That's really the only fair thing to do (in my opinion).

Collis

    Those against Gainsharing make it seem like the employees are getting
    alot of money at the expense of the owners.  The fact of the matter is,
    that the money that didn't go to member dividends hasn't gone anywhere. 
    It is still in the DCU as capital.

    >Those against Gainsharing make it seem like the employees are getting
    >alot of money at the expense of the owners.  The fact of the matter is,
    >that the money that didn't go to member dividends hasn't gone anywhere. 
    >It is still in the DCU as capital.

Huh?  You totally lost me.

What money the employees get *is* at the expense of the owners
capital.  It appears to me that it is specifically defined
that way.  The more excess capital over budget, the more money
distributed to employees.

Perhaps one of us doesn't understand.  Please feel free to
elaborate your understanding.

Collis

    
    Re .10: More obfuscation.
    
    It is indeed a fact "that the money that didn't go to member
    dividends...is still in the DCU as capital."
    
    It is also a fact that net income in excess of the budget goal has
    gone and will go somewhere other than DCU capital. See .1.
    
    Why is it bad to draw down capital to give bonus dividends to members,
    but good to draw down capital to give bonus pay to employees.
    
    My mother always says, "What's good for the goose is good for the
    gander." This looks more like the goose defecating on the gander.
    

>              <<< Note 810.10 by PATE::MACNEAL "ruck `n' roll" >>>
>
>    Those against Gainsharing make it seem like the employees are getting
>    alot of money at the expense of the owners.  The fact of the matter is,
>    that the money that didn't go to member dividends hasn't gone anywhere. 
>    It is still in the DCU as capital.
    
    The money that was budgeted to go to the membership as dividends is an
    expense.  If expenses are lower, profit increases.  If profits
    increase, gainsharing for employees increases.  So a part of that money
    could end up as gainsharing for DCU employees.
    
    IMO the issues with gainsharing are not quantity related.  The issues
    are of process, authority and whether a profit sharing plan for DCU
    employees which reduces our capital ratio (remember that?) is justified
    while DCU members are told it is unfair to give them essentially the
    same thing.  Some have said the two are totally unrelated and cannot be
    compared.  I very much disagree.  As implemented it was a profit
    sharing plan for DCU employees while the same profit sharing plan
    (bonus dividends/interest rebate) for owners was refused.  I see
    absolutely no consistency here.  What was unfair for some suddenly
    becomes fair for others.
    
    And all this is occurring while large numbers of DCU members are being
    subjected to fees, which further builds the net income.  Sorry, in my
    book this all simply stinks.  NOBODY begrudges DCU employees their fair
    share.  All I advocate is fair treatment of EVERYBODY.
    

1.  Maybe since we are a non-profit, it cannot be called profit sharing.  

2.  Here in SCO (DEC Hudson/Scotland/Israel/PaloAlto/Austin) we are not making a
profit, but do have a gain over budget.  There has been some talk that a profit
sharing plan be implemented for us, but until we actually make a profit, it
would have to be called a gainsharing plan.

3.  There are non-profit organizations and there are non-profit organizations. 
When most people think of a non-profit, they think of an organization with low
overhead, with the resulting "profits" turned over to good purposes (charity,
returned to members, etc.)  Others view a non-profit as an organization which
literally does not make a profit, with overhead (salaries, bonuses, percs) so
high that no profit will occur.  These are probably two extremes, but DCU needs
to decide where in the range it wants to be.

Elaine

    Re .10
    
    I think Collis in .9 summed it up very well. What I object to is the
    following:
    
    	1, The manner in which this Gainsharing Plan was put through the
    	   system.
    	2, The fact that it is clearly a method of distributing equity to
    	   employees.
    	3, As said by others I think profit is completely the WRONG metric
    	   to use in determining how much compensation employees should
    	   receive.
    	4, The contradiction inherent in the fact that equity distribution
    	   to the employees is said to be OK but it isn't OK to distribute it
    	   to the owners.
    
    I think the way this Gainsharing plan was proposed, approved and
    adopted is symptomatic of the problems with the current board at DCU.
    It is because of these problems that I am running for a seat on that
    board. I feel I can do a far better job for the credit union than the
    majority of the current board have done. I also feel my approach is
    much more in line with what the membership wants. Come the end of April
    we'll find out if I was right or wrong on that last point.
    
    Dave

�What money the employees get *is* at the expense of the owners
�capital.  It appears to me that it is specifically defined
�that way.  The more excess capital over budget, the more money
�distributed to employees.
    
    Yes, but, many postings on this topic make it look like the members
    aren't getting a thing unless they get a check made out to them in the
    name of a bonus dividend.

�    And all this is occurring while large numbers of DCU members are being
�    subjected to fees, which further builds the net income.  
    
    Please quantify "large numbers of DCU members".
    
    Also haven't you yourself said that the fees represent an insignificant
    amount of net income?

>    Please quantify "large numbers of DCU members".
    
    More than 1.
    
    -Glenn-

    
>                     DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
>                           Board of Directors' Meeting
>                                  July 27, 1993
>    
>    [non relevant text deleted]
>
>   GENERAL SESSION
>    
>   VII.     COMMITTEE REPORTS (continued)
>    
>   c. Human Resource Committee
>    
>   Gainsharing
>    
>   Mr. Cockburn reviewed with the Board DCU's Gainsharing Plan previously
>   approved by the Human Resource Committee.  An outline of the Plan is as
>   follows:
    
    Allow me to point out that the Human Resources Committee (Lisa Ross,
    Paul Milbury, Tom McEachin) APPROVED THE PLAN.  The HR Committee is a
    sub-committee of the full Board.  IMO it does NOT have the authority to
    approve this plan on its own.  It can recommend to the FULL Board that
    it be approved.  But why would HR Comm. approval be necessary if it is
    "compensation" and not our responsibility?
    
>            1.  If DCU exceeds the budgeted net income goal (of $3,562,237) by
>   $100,000 or more, eligible employees will receive a bonus of 1% of their
>   gross salary.
>    
>            2.  If the net income goal exceeds budget by $500,000 or more,
>   employees will receive 5% of the amount in excess of budget in equal
>   proportion.
>    
>            3.  The President/CEO and Senior Managers, as well as employees
>   who are not performing satisfactorily, are not eligible for Gainsharing.
>    
>            4.  In order to release the money before the end of the year,
>   December data will be estimated based on the January - November period.
    
    If this plan was truly a replacement for existing plans then the plan
    would be limited to the amount already budgeted for the programs that
    were claimed to be superceded.  BUT, those plans were discontinued
    "within his [Chuck Cockburn's] first 3 or 4 months" (Hired Sept. 1991).
    If that is the case then these programs were NOT in the 1992 budget and
    most certainly NOT in the 1993 budget.
    
>   A handout was provided outlining DCU's Discontinued Recognition/Reward
>   Programs.  Mr. Cockburn explained that he discontinued these programs
>   within his first 3 or 4 months of employment at DCU because they were not
>   appropriate for the Quality Initiative.  This new Gainsharing program will
>   take the place of the discontinued programs and will better ease employees
>   into utilizing the tools of Total Quality Management.
    
    To my knowledge I never saw this outline of discontinued programs.  I
    would ask that Mr. Milbury and/or Chuck post the exact programs and the
    amounts of those programs.
    
    I would also like to know how this will "ease employees into utilizing
    the tools of Total Quality Management"?  Will it provide incentive for
    them to do things to increase the bottom line in hopes of getting bigger
    gainsharing distributions?
    
>   Mr. Milbury requested that the outline should state "if the net income goal
>   exceeds the budget by $500,000 or more, employees will receive 5% of the
>   amount in excess of the budget, minus $500,000, in equal proportion, in
>   addition to the 1% of their gross salary".
    
    Percentages of amounts in excess of the budget is NOT compensation. 
    This is a profit sharing plan.  Some might call it a bonus plan. 
    It is NOT guaranteed and it is tied to net income above goal.  The only
    thing it has in common with "compensation" is that it is money paid to
    DCU employees.
    

>>              <<< Note 810.17 by PATE::MACNEAL "ruck `n' roll" >>>
>>
>>�    And all this is occurring while large numbers of DCU members are being
>>�    subjected to fees, which further builds the net income.  
>>    
>>    Please quantify "large numbers of DCU members".
    
    Thousands.  Since Chuck is now responding here, he can provide you with
    exact numbers.  
    
>>    Also haven't you yourself said that the fees represent an insignificant
>>    amount of net income?
    
    I am not aware that I have ever made that statement.  Please back your
    "question" up with a reference.
    
    Insignificant is a very subjective term.  The breakdown I have seen
    indicate approximately $40,000/month for "maintenance fees" for the first
    two months.  When I asked if these were specifically checking account
    fees, I believe the answer was that they may include other fees, for
    other accounts.  Again, Chuck could provide you with the exact numbers.
    

<<< Note 810.9 by PACKED::COLLIS::JACKSON "Live freed or live a slave to sin" >>>

>In fact, there is an incentive to make "profits" at every
>step along the way at the expense of a more accurate budget
>or better rates to membership.  This really pits the interest
>of the owners against the interest of DCU employees.

	This is a major problem for me. I am philsophically opposed
	to compensation plans that are based on forecast error.

	Error should not be rewarded.


Jim

   <<< Note 810.20 by ASE003::GRANSEWICZ "DCU Election: 3 G's -> NO FEES" >>>

    
>>    Insignificant is a very subjective term.  The breakdown I have seen
>>    indicate approximately $40,000/month for "maintenance fees" for the first

	Hmm, lets get out the calculator.  No $40K x 12 = $480,000.  Would
	this be, perhaps, close to 1/2 MILLION added to PROFIT.

	Oops, no this just covers expenses.   But, if this covers expenses,
	and they don't have to be taken out of income, what happens.

		Gee  profit = income - expenses.

	Hmm, $500,000 has a strangely familiar ring to it



}8-)}

	Bill

    RE:  .16
    
    I don't believe we're worried about that.  I'm also amazed at how this
    can be "fair" for employees (and yes, I also agree basing it on
    "profit" is opposed to my best interest), but we're given previous
    drivel on the fact that there is no "fair" way to make a distribution
    to members.  Give me a break!
    
    This smacks of "we're too stupid to understand what's really going on".
    
    

    RE: .19
    
    >    To my knowledge I never saw this outline of discontinued programs.  I
    
    Did you vote to approve the minutes you quoted? If so, why didn't you
    first try and clear this up?
    
    		Alfred

    
    RE: .24
    
    What does my approval of the minutes have to do with anything?  What
    needs to be cleared up?
    
    That segment is a Human Resources Comm. report to the full
    Board.  I am not on the HR Comm.  It appears they were given this
    handout.  Why only them, I don't know.  But this outline wasn't given
    in the subsequent discussions of the gainsharing issue at the Board
    meetings.  I certainly can't recall seeing it or discussing it.
    

    
>    What does my approval of the minutes have to do with anything?  What
>    needs to be cleared up?
    
    The minutes say "a handout was provided." If it wasn't then why didn't
    you ask that the minutes be corrected since, according to you, no
    handout was provided? Possible reasons are:
    
    a) You voted on minutes without really looking through them.
    
    b) A handout was provided but you don't remember it now.
    
    c) Some other reason.
    
    			Alfred
    

    
>   VII.     COMMITTEE REPORTS (continued)
>    
>   c. Human Resource Committee
>    
>   A handout was provided outlining DCU's Discontinued Recognition/Reward
>   Programs.  Mr. Cockburn explained that he discontinued these programs
>   within his first 3 or 4 months of employment at DCU because they were not
>   appropriate for the Quality Initiative.  This new Gainsharing program will
>   take the place of the discontinued programs and will better ease employees
>   into utilizing the tools of Total Quality Management.
    
    
    	Alfred, you mis-understand the minutes.  The section you are
    referring to is a summary of the Human Resources Comm. meeting, NOT the
    Board meeting.  I am not on the HR Comm. and would not have seen it
    when they did.  I also do NOT recall any handout of this nature being
    given to the full Board when the general discussion of this plan took
    place.  After all, why would we need it since we weren't going to vote
    on it?
    

    Well, then the minutes are pretty confusing. It sure looked like
    they'd moved on from what happened at the committee meeting to
    what happened at the full board meeting. I'm starting to
    think that I can't make any reasonable assumptions based just
    on the minutes.

    			Alfred

    
    You just need to be aware of the numbering and letter changes.  After
    going back and looking at those minutes they are a tad choppy with
    regards to headings, redactions, etc.  I can see how you might have
    missed the context switch.
    

    As to what a non-profit should do with excess funds ...  I'm serving on
    the Board for a non-profit right now.  We went over this issue some
    time ago.  Brought in a consultant to help us understand a few things. 
    One of the things we learned was that being a non-profit does NOT mean
    you don't make a profit at the end of the year.  What you are limited
    in is what you do with the money.  It's actually a healthy sign from an
    economic point of view for a non-profit corporation to have excess at
    the end of the fiscal year.  In our case, we were wondering about the
    establishment of a foundation, but we're not yet in that league.  For a
    non-profit to take advantage of a foundation you need to have something
    like $100K on hand or so.  Even then, when you establish the
    foundation, you use the interest and basically can't touch the
    principal.  We decided to continue to roll profits into the operating
    expenses of the following year for now.
    
    Steve