2011 annual report
Cover Photo Bapak in Wolfsburg, 1964 . Courtesy Subud Archives Canberra
Muhammad Subuh Foundation is registered in Virginia, U.S.A and is tax exempt under 501(c)3 No. 52-1742864
Mission & Vision Chairmanâ€™s letter Highlights Funds Grants Financial Report Investments
o5 07 09 15 19 25 31
Mission The Muhammad Subuh Foundation honors the name of the founder of Subud, Bapak Muhammad Subuh Sumohadiwidjojo. It serves to build a lasting financial capacity for the Subud community, with emphasis on the long-term aims of the World Subud Association. Vision The Foundation envisages a Subud community that is active and effective in the world, in many fields of human endeavor. It supports this vision by providing financial and other assistance to a wide-range of activities and programs aimed at improving the condition of the communities they serve, including social and humanitarian work, cultural endeavors, child and youth projects, and others.
Bapak Muhammad Subuh Sumohadiwidjojo « Photographer: Simón Cherpitel
chairman’s letter The year 2011 was one of change for the board, with three trustees appointed: Heloise Jackson from the UK, Hannah Baerveldt from Indonesia, for a second 4-year term, and myself. I had the privilege to take over the Foundation chairmanship from Samuel Simonsson, my neighbor in Spain, which facilitated a smooth hand over. The Foundation has three main areas of activity: managing the financial portfolios and physical assets held by the Foundation on behalf of WSA, fundraising, and providing financial support to the programs and the activities of the Subud community. A prudent, actively managed trading portfolio minimized the effects of the difficult world financial situation in 2011. Adjustments to the Foundation’s grant policy and procedures were made to strengthen the Foundation’s support to Subud international organizations, including WSA, SDIA and SICA. Improvements to Subud House grant procedures initiated in 2009 were expanded to include new procedures to evaluate grant requests. The Foundation provided $105,000 of support to the Subud community, which consist of a $ 60,000 grant to WSA, a $ 25,000 grant for social and humanitarian projects and $ 20,000 for Subud house development. The Subud Houses program also includes loans totaling about $ 120,000 that benefit nine countries, including six in Latin America.
In June 2011, MSF and WSA jointly recognized the urgency and importance of an Archives Preservation Program. As a result, the Foundation initiated two archives projects to assist WSA. A oneyear $ 210,000 project for the preservation of the sound recordings of Bapak’s talks began in December 2011. The Foundation also began preparing for a major fundraising drive, known as the Legacy Project, to raise $ 1,000,000 for the 12-year budget (2013 – 2026) of the WSA archives program that will be launched in November 2012. After a year as a Foundation trustee and chairman, I feel that it is a blessing and a privilege to serve the Subud community in this way. It is an opportunity to witness that it is possible to give a noble and high content to the use of the funds given by the Subud members from all round the world when caring for the growth of the Subud community from the right inner place. For this reason, I wish to invite you to support the work of the Foundation, not only financially, but above all, with your prayers and positive feelings, so the present Foundation team can contribute to the noble mission of the Muhammad Subuh Foundation. Warmest regards
highlights 2011 was a time of progress for MSF, both within the organization and in its work of providing key support to many essential parts of the international Subud community in an effort to strengthen Subud as a whole...
The Road to Kedung Jati, Bapakâ€™s Birthplace ÂŤ Photographer: Hadiyono
highlights 2011 was a time of progress for MSF, both within the organization and in its work of providing key support to many essential parts of the international Subud community in an effort to strengthen Subud as a whole. WSA and MSF are working closely together for the well being of our organization. To date, the Muhammad Subuh
Foundation has provided approximately $2.5 Million in funding since 1996 in order to strengthen Subud activities. This is a significant amount and hopefully only the beginning of what the Foundation and all Subud members can accomplish. In that way, the Subud membership, MSF and WSA can help take Subud forward in the way that Bapak intended.
strategic goals During its annual meeting in Indonesia, the Foundation trustees selected seven strategic goals, or Foundation programs, for their long-term impact to provide for the long-term needs and development of Subud. These are:
“The original records of Bapak’s talks represent an extraordinary asset for Subud members today and especially for future generations of people who never met Bapak and wish to worship Almighty God through the latihan kejiwaan (spiritual practice) of Subud. And so, the preservation of Bapak’s voice to the best quality technology can provide, has come to this generation of Subud members to safeguard, and together can make this project a reality.” Hannah Baerveldt, Trustee
• Assure the long-term financial capacity of Subud • Preserve Bapak and Ibu Rahayu’s talks for future generations • Care for WSA non-financial assets • Foster the creation of new Subud houses as well as improve current ones • Support the work and travel of International Helpers • Strengthen the development of Subud through capacity building of its organizations • Support the work and projects of our partner organizations – SDIA and SICA.
preserving our legacy In designing the Foundation programs for the long term development of Subud, the Board of Trustees was moved to join the WSA effort in preserving the original audio tapes of Bapak’s talks, the heritage of the Subud community. Those archives represent the legacy that Bapak has given to humankind, and it is incumbent upon all of us to look after and care for this valuable inheritance. 2011 saw the signing of an agreement with the WSA to take
over not just the funding of the Legacy project to preserve and restore Bapak’s audio tapes but to also implement this project. That same year MSF signed a contract with an expert archival company in Belgium to professionally preserve and restore all 1315 surviving talks. A recent review of these tapes found 85% can be digitized without restoration. Today we don’t how many recordings will be lost until the end of the digitization process.
Bapak and his translator Usman at an early talk « photo courtesy Subud Archives, Canberra
strengthening our partners in 2011 MSF entered into a new Settlement Agreement with Yayasan Muhammad Subuh (YMS) regarding Adi Puri that, in part, allows YMS more flexibility in how it can manage Adi Puri. MSF also completed a loan settlement agreement with Yayasan Muhammad Subuh. This agreement was primarily an accounting formality to more accurately reflect the reality of the financial situation between the two partner organizations. It also acknowledged the fact that the YMS is holding the assets of the World Subud Association that are commonly known as “Bapak’s Big House” and the “Archive house”.
The Muhammad Subuh Foundation also signed a Memorandum of Understanding with Yayasan Subud (YS). The MoU states that YS recognizes that certain assets, such as the latihan hall and guest house at Wisma Subud, are assets of the World Subud Association. YS still retains management control and is responsible for covering the costs of taxes, maintenance, repairs, and insurance for the property.
appointment of new trustees At the annual meeting in Indonesia in June 2011, the World Subud Council and the Muhammad Subuh Foundation jointly appointed Bachtiar Lorot as chairman of the Foundation. Appointed by the WSC to four-year terms as trustees were Bachtiar Lorot, Heloise Jackson and Hannah Baerveldt, who continues into her second term. Remaining trustees fulfilling their current terms are Olvia Reksodipoetro, Lawrence Fryer (treasurer), Lailani Moody, and Luke Penseney (ex-officio).
Samuel Simonsson resigned as trustee and chairman in early 2011. His integrity, professionalism and expertise are greatly missed by the Board. After serving two terms as trustee, Ibu Ismana Haryono retired; the Board very much appreciated her dedication and service over the years. Our appreciation also goes to Shyam Wadhera who retired in 2011 after serving as trustee for two years.
the new msf website
Formally Bapak’s home, Adi Puri is now a beautiful meeting venue. Photographer« photographer Harry
A new MSF website was launched in 2011. Considerable efforts were put into the creation of this new comprehensive website which now includes extensive information on bequests and charitable giving.
funds “ After discussion with my wife Hannah, we decided that when each of us passes away, we will make a bequest to the Muhammad Subuh Foundation to further its work which is essentially in furthering the work of Bapak.” Konrad Baerveldt, MSF Donor
“ If you want Subud to grow and be more than what it is today. no question you need money. you need money to build a college, you need money to build houses for Subud members, hospitals this is what Bapak envisioned for us to do these things Money is extremely important... so how do we get it? The best way to get it is when a person passes on, he leaves his money to the Muhammad Subuh Foundation maybe not all of it he has children but leave something to MSF and youll see it grow. “ Peter Fillippelli, Former MSF Chair
The train station near Bapak’s home in Kedung Jati. As a young man, Bapak worked for the dutch railway line « Photographer: Hadiyono Wibowo
bequests and endowments
Varindra’s dream for MSF
Bapak confirmed that the role of the Muhammad Subuh Foundation is to serve as the receptacle to receive the bequests of Subud members for the long-range stability and development of Subud. In an effort to increase the Foundation’s capacity to attract and manage bequests and endowments, a permanent Foundation committee called the MSF Endowment Advisory Committee has been proposed and presented on the new website. This framework provides donors with the opportunity to contribute to the oversight and management of their own, and other, endowments and bequests. As this is a permanent committee, without terms of service, it is envisaged that a knowledgeable resource-pool can be developed to assist current and future trustees with their endowment responsibilities.
The Muhammad Subuh Foundation currently has three endowment funds: • The Bapak Legacy Fund which was designed to promote lasting financial capacity for the Subud Association. It is a permanently-restricted fund whose principal is held in perpetuity and only the income and appreciation on the funds may be distributed. • The Francois & Lucienne Farkas Endowment Fund supports educational opportunities and programs for young people in need around the world, and helps make Bapak’s talks widely available. • The Leonard & Aisah Parker Endowment Fund benefits the development of Subud houses in Australia.
national endowments The increase in the numbers of countries wishing to establish their own national endowments is of great concern to the Foundation, as the creation of national bequests could adversely impact the ability of the Foundation to attract bequests and endowments under the umbrella of MSF. To address this challenge, the MSF Endowment Advisory Committee framework includes the opportunity of a national representative to provide input on the management
and oversight of their national endowment under the auspices of MSF. However, due to the technical inability of MSF to provide tax benefits to donors within all countries, an alternative approach would be to sign Memorandums of Understanding (MoUs) between MSF and the national committees forming their own national endowments, so that mutual support and coordination is achieved.
In the mid 1960’s, when Varindra was chairman of the World Subud Council he had a dream that led to the development of Subud and in 1991 to the establishment of the Muhammad Subuh Foundation “I saw a big building and on its white marble façade were the words: ‘Muhammad Subuh Foundation’. When I entered the building, it seemed to be a formal place like a bank, but instead of money what I saw was a stack of legal documents which turned out to be people’s Wills and Testaments in which Subud members had willed a portion of their assets as bequests to the Brotherhood.” Varindra told his dream to Bapak, who explained: “Your dream is a true dream. It is right that you start work on establishing such a Foundation to look after bequests of Subud members. But Bapak asks that as long as Bapak is in this world it should not be called Muhammad Subuh Foundation. Better call it Subud Brotherhood International Foundation.”
grants “ If you have a place for latihan [the spiritual practice of Subud] which is really big and open and wide enough for all of you, and really suitable - this will itself give you additional enthusiasm to do the latihan more; and it is this enthusiasm which will lead you quickly to receive more and deeper guidance which will be of greater use for your life.” Extract from a talk by Bapak: Recording 77 BRS 3 Copyright © 2012 the World Subud Association
Members get their first look at the interior of the latihan hall in Wisma Subud, 1971. Courtesy Subud Archives Canberra « Photographer: Unknown
grants subud houses United States Seattle Spokane Washington DC Mexico Puebla Tlaxcala Suriname Acaribo Colombia Amanecer Popayan Armenia Istmina Ecuador Quevedo Quito Tumbaco Peru Lima Chile La Florida Brazil Sao Paulo Argentina Mina Clavero United Kingdom Lewes Germany Munich Italy Florence
France Mayenne Bosnia Banja Luka
Ukraine Cherkessy Dnepropetrovsk
Portugal Lisbon Lebanon Beirut Nigeria Calabar Lagos
DR Congo Matadi Kinshasa Kingantoko
Malaysia Kuala Lumpur Indonesia Cilandak - Adi Puri Central Jakarta Bogor Malang Purwokerto Surabaya Muhammad Subuh Center - Central Kalimantan
Muhammad Subuh Center. Palangkaraya
COLUMBIA Amanecer Popayan Armenia Istmina
Quevedo Quito Tumbaco
INDONESIA JAVA ARGENTINA Mina Clavero
Australia Canberra CHILE La Florida
DR CONGO Matadi Kinshasa Kingantoko Kingantoko - Water
Adi Puri Bogor Jakarta Central Malang Purwokerto Surabaya
washington dc Washington D.C., USA: The trustees approved a grant of $20,000 and a loan of $20,000 to help with the construction of a new Subud Center near Washington D.C. This new DC Center has been chosen as the future location of the SUBUD USA (SUSA) National Office. It has been designed for Regional activities; it will include two large meeting halls, a full kitchen, a small studio apartment, an additional bedroom, and spacious grounds for gardening, wandering, and camping. Perhaps one day this DC Center will also serve as a National or even an International Center.
mina clavero Mina Clavero, Argentina: A $13,000 loan to replace the roof of the Subud house in Mina Clavero was approved in 2011. In the 90s, the Muhammad Subuh Foundation had already assisted this group with a grant and loan to build their house in a popular mountain resort in the central region of the Argentines. The principal use of the house is for the spiritual practice of Subud and social gatherings of members. Members of the public also use the house for seminars, teachers’ meetings, graduations, baptisms etc.
Washington DC Subud House «
Mina Clavero « Photographer: Unknown
Central Kalimantan ÂŤ Photographer: Osanna Vaughn
2010 - 2011 Unrestricted Unrestricted
2011 20112010 2010 Assets
Cash Available for Current Use
Notes Receivable Long Term
Notes Term Receivable from Subud Organisations Notes Receivable Long
51,670 2,201,165 53,1241,707,995 2,201,165 120,070 1,707,995 231,137 125,183
Land and Buildings Net of Accumulated Depreciation Notes Receivable from Subud Organisations 125,183
TOTAL ASSETS Land and Buildings Net of Accumulated Depreciation LIABILITIES & NET ASSETS
Loans from Trustees
Total Liabilities Distributable Grants
Net Assets Unrestricted - Capital Use Fund
Unrestricted - Designated as Capital Preservation Fund Unrestricted - Designated as Youth Support Fund
Unrestricted - Capital Fund Net Assets TotalUse Unrestricted Unrestricted - Designated as Capital Preservation Fund
Total Net Assets
Permanently Restricted - Permanent Capital Fund
Total Net Assets
TOTAL LIABILITIES AND NET ASSETS
TOTAL LIABILITIES AND NET ASSETS
11,000 155,169 2,362,123
Permanently Restricted - Permanent Capital Fund
2011 20112011 2010 2010
Contributions from Subud Members Legacies & Bequests Dividends and Realized Gains Legacies & Bequests
Miscellaneous Net Assets Released from Restrictions
Net TOTAL AssetsSUPPORT ReleasedAND from Restrictions REVENUE
0 40,055 16,316
222 280 56,550
2,022,731 2,027,731 2,346,1232,362,123 5,000 5,000
Unrestricted - Designated as Restricted Youth Support Fund Temporarily Total Unrestricted Net Assets
Support and Revenue
Support and Revenue Contributions from Subud Members
Loans from Trustees Distributable Grants Accounts payable Euro loan
Interestand Revenue Dividends Realized Gains
LIABILITIES & NET ASSETS Liabilities
Cash Available forAccounts Current Receivable Use & Prepayments Accounts Receivable & Prepayments Investments Investments
1,151,910 3,298,732 3,422,623
Expenses TOTAL SUPPORT AND REVENUE
Programs Grants for Subud houses Expenses
Grants to World Subud Association
Grants for Subud houses
Depreciation Expense on LongTerm Assets
Grants to World Subud Association Total Program Expenses
Grants Other YMS loan written off
Depreciation Expense on LongTerm Assets Management and General Total Program Expenses Total Expenses YMS loan written off Other Gains/Losses Management and General Unrealized Loss/(Gain) on Managed Portfolio Total Expenses
25,027 57,039 5,475 67,757
Correction previous years
Unrealized Loss/(Gain) on Managed Portfolio TOTAL EXPENSES AND LOSSES
Unrealized (Gain )/Loss on Investments Change in Net Assets
Correction previous Net Assets End ofyears Period
71,445 235,298 121,345 -209,626
TOTAL EXPENSES AND LOSSES
(Gains on Currency differences Net )/Losses Assets Beginning of Period
38,122 235,298 108,126
(Gains )/Losses on Currency differences
235,298 110,502 272,162
Unrealized (Gain )/Loss on Investments
Net Assets Beginning of Period
Net Assets End of Period
Change in Net Assets
234,255 29 257,490
gifts 400,000 300,000 200,000 Subud House Grants
2005 2006 2007 2008 2009 2010
225,000 150,000 75,000 0
assets 5,000,000 3,750,000 2,500,000 1,250,000 0
2005 2006 2007 2008 2009 2010 2011
YMS Loan write off
Subud House Grants
YMS Loan write off Operating expenses
investment performance overview
The value of MSF’s managed investment portfolio at 31 December 2011 was USD 2,472,859, which represents a 2 percent decline in portfolio value for the year. The primary components of the loss were
Fixed Income 30%
• A decline in the value of the non-US equity portion of the portfolio with developed markets (excluding the US) down between 10% and 20% (in USD) and emerging markets down 11% (in USD). US equities gained 2% in 2011, which effectively represents their dividend yield.
Fixed Income 30%
• A decline in the value of the euro relative to the US dollar
Cash and Euro 38%
Cash and Equiv 30%
• The declines in the value of equities and the euro were offset by good performance in US government and US corporate bonds, in particular US Tips (inflationlinked bonds)
total fund positions and main movements in 2011
primary currencies Fixed Income 30%
Equity 33% Target asset allocation for 2011 was 10% cash, 35% fixed income, 45% equity Other 7% and 10% other assets. The following movement towards the target allocation occurred during the year: Cash and Equiv 30% Fixed Income 30% • • • •
Equity 33% Cash was reduced from 50.5% to 30.2% Other 7% from 21.1% to 29.9% Fixed Income increased Equity increased from 26.9% to 32.8% Cash and Equiv 30% Other Assets increased from 1.5% to 7.
By year end, each category was about halfway to achieving its target allocation, with the exception of the equity allocation. Steep and sudden swings in asset prices during the year, particularly in equity markets, made further investments challenging. In addition, further investment opportunities in fixed income proved difficult in an environment of low interest rates and weakness in global debt markets, as many countries worked to reduce their debt levels.
Euro 38% Other 18% USD 44% Euro 38% Other 18% USD 44%
The following additions to the portfolio were made during 2011: • Additional inflation-linked bonds and a euro covered-bond fund. • Increased positions in several US bond funds. • Six additions to the equity portfolio, most of which provide currency diversification. • Small positions in high yield bond funds and an international (excluding the US) real estate fund, which provides both currency diversification and exposure to the global real estate market.
Each of MSF’s four sub-funds – the Muhammad Subuh Legacy Fund, the Farkas Fund, the Parker Fund and the General Fund – has a proportionate interest in the managed investment account. The chart below provides the value of each sub-fund at 31 December 2011. In addition to its interest in the managed investment account, the General Fund also holds shares in the following Subud enterprises: Kalimantan Gold Corporation, E.C.T. Ltd., Oakenhall Ltd., and Pelham House Ltd. Together these securities were valued at $336,019 at 31 December 2011.
sub-funds’ interests in managed investment account at 31/12/2011 Fixed Income 30% Equity 33%
xed Income 30%
Euro and 38% Equiv 30% Cash
ash and Equiv 30%
The economy is challenging, with governments and enterprises dealing with excessive debt, historically low interest rates, threats of long-term inflation that would reduce the value of fixed income securities, many developed economies slowing to near recession levels, emerging markets experiencing slower growth, and the Eurozone facing a challenge to its monetary integrity as well as continuing economic weakness. In this economic environment, MSF is likely to consider portfolio moves similar to those made in 2011, including the following: • Currency diversification: Investing small amounts in fixed income and equity securities denominated in reserve currencies other than the US dollar and the euro, such as the British pound, the yen and the Swiss franc, and in other strong currencies, such as the Norwegian krona and the Singapore dollar. • Fixed income: Additions to fixed income securities will continue to focus on inflation-linked and short-duration bonds. • Equity securities: Given the low yields on fixed income and the risk of inflation, equities should perform better over the mid- to long-term. However, an economic downturn would negatively impact equities in the short-term. With volatility in equity markets, purchases of equities will be made during periods of market weakness and will favour large and high dividend-paying companies. Eurocompanies 38%
Other 18% • Other assets: Investments in real property should provide additional yield and inflation protection. USD 44%
KLG Shares Michael Schermele Laura West Gerhard Wannet Leonard van Willenswaard Anonymous Emmanuel Williams Mashuri L. Warren A.J. & M.L. Warren Idina Waugh Elwyn Waugh H. Taylor Miftach & Astrid Taylor Hubert Thomson Bethia Tooth J.R.H. Adams Marzuki Andujar Simon Andrews Heather Bodkin Faqith Rohana Bourne Vivana Brodey R.R. Bachelor Anonymous Louisa Bedford Latifah Brett Sophia Bigwood Frederick & Melanie Branchflower H. Ball A. & M. Bakar Hilda M. Blakey Michael Cutter Roy Charles Mashud Darlington Sulayman J.T. Dowell Evan H. Padilla Family Trust Estate Rachmat Keith Fischer
Reynold Forster Karen Ann Gamblin Anonymous Samuel & Helena Gudgeon Honora Gough Renee Goetz Stephen Hobson General Fund Subud Japan Estate of Lawrence (Machmud) Branting Rohana Darlington Estate of Lavinia Swanson NZ Earthquake Relief Luqman Harris Osanna Vaughn Muchtar Nankivell Julia Hurd Elaina Dodson R. & C. Robertson Sassienie Lorna & Hamish Barker Gauhar Wadhera Santa Raymond Roosmiwati Reynolds The Son Mai F. & Y. Richard Hamdan Bravo Anonymous Christine Szepesi Orlando Sandoval Nocchi Japan Earthquake Relief Orlando Sandoval Nocchi
TRUSTEES Bachtiar Lorot Chairman & Trustee Luke Penseney Ex-Officio Trustee Olvia Reksodipoetro Trustee Lawrence Fryer Treasurer Hannah Baerveldt Trustee Lailani Moody Trustee Heloise Jackson Trustee MSF STAFF & SERVICE PROVIDERS Rayner Sutherland Executive Director Lillian Shulman Administrator Elwyn Waugh Accountant Amalijah Thompson MSF’s Archive Consultant Pt Begin Communication MSF’s PR & Communication Agency www.beginchange.co Suzanna Dayne and Mardiyah Miller MSF’S DONOR RELATIONS Representative For Bapak’s Legacy Project Mariam Padilla Jorge Bustillo MSF’s Legal Representative in Colombia NATIONAL LIAISONS Britain Dorothea Hamidah Rogers Canada Lester Sutherland Colombia Samuel (Sharif) Marcks France Francoise Ivanoff
Liliane Tavakilian Harlinah Chalom Germany Hermina Ruetz Indonesia Aryati Prawoto (Marmita) Lita Arida Fitriani Japan Saodah Kimiko Hayashi New Zealand Judy Gibb Norway Raymond Hemsen R.D. Congo Arnaud Delune Spain Jorge Guerin U.S.A Maria Wallington MSF TRANSLATORS French Samuel Chapleau Francoise Ivanoff Arnaud Delune Spanish Mariam Padilla Maryam Roldan Arif Rivero Emmanuel Fajardo Germán (Sebastián) Alvarez Ayala Martin Fisco
Published on Dec 18, 2012
The year 2011 was one of change for the board, with three trustees appointed: Heloise Jackson from the UK, Hannah Baerveldt from Indonesia,f...