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 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 [email protected]!
November 13, 2008