Report on Executive Director Evaluation

David Grove

Election of 2022 General Board Officers & Advisory Committee Recommendations David Grove

Other Business

Special Recognitions

Adjourn to lunch and annual group photo

Call to Order

Doug Morrow

The meeting was called to order by David Grove, Chairman, at 10:14 am. He mentioned that this is a hybrid meeting with a couple of participants online. He opened the meeting in prayer.

Opening Devotion

Ben Foxworth started with a family anecdote in order to illustrate the role of a steward. He defined the word “steward” as caretaker, or manager of someone else’s stuff. He stated that God gave us the role of stewards from the beginning when, at the time of creation, in Genesis 2: 15, Adam was tasked by God to tend and watch over the Garden of Eden. In Romans 1:20 the caretaking role is given a new meaning: when we steward God’s creation, we are actually taking care of that which reflects God’s invisible attributes, His eternal power and divine nature, manifested in creation so that all can see the reality of God and believe. Throughout God’s word, we see that we are not only stewards of material things, but we have also been entrusted to take care of the Gospel, of God’s word and its proper handling, and ultimately of people, by loving, helping, serving, teaching, training and encouraging one another. BFI is a steward entrusted by churches and individuals to manage their resources. As Trustees we are therefore stewards also and we should be mindful that one day we will give an account to the Lord for our service. Rev. Foxworth urged us to recognize God as the source of all the gifts and to serve with faithfulness daily, as we aspire to hear from the Lord one day “Well done, good and faithful servant!”

Roll Call

Mihaela Sexton, Board Secretary, called the roll as requested by Chairman David Grove. Present Trustees: Gerry Odell (present via Zoom), Dan Huffman, Newlin Wollaston, Pam White, Ben Foxworth, Anthony Richardson, Mihaela Sexton, Tim Sadler, David Grove, Dennis Fulkerson, Julian Williams, David Rochleau, Ron Knox, Allan Monroe, Bruce Guebert. Also attending: Tonya Downard (via phone), Sheila Jessen, Kim Morrow, Marcus McGlasson, Doug Morrow, and Ken Steward.

Not present: Don Carlyle, Nedra Robinson, David Sutton, Dennis Fulkerson and Richard Harris

Review of the last meeting’s minutes and adoption of the agenda

The Spring meeting minutes, and the Agenda for the Fall meeting were adopted unanimously as presented on the intranet, without change.

Executive Director’s Report

BOT Update:

Doug Morrow, Executive Director of BFI, started his report by showing the pictures of five future BFI Board of Trustees members expected to join the Board after the Nov 2021 IBSA convention. They are:

● DeWanna Oliver , from Algonquin, present client and upbeat, positive personality,

● Greg Kyrouac, from New Beginnings Church in Ashland IL, replacing his pastor who was a Trustee for a short term,

● Paul Stanford, from, with previous involvement with the Foundation,

● Scott Andrews, pastor and army chaplain, client of BFI and previously involved with the Baptist Children Home, and

● Brent Cloyd, Director of Missions in the Grand Wabash Association, and a precise thinker.

Doug asked for prayers for the new members, and noted that before our Spring meeting there might be another new Trustee to replace David Sutton who now has a position with IBSA which precludes him from being on the BFI Board. Doug added that several of the new members are pastors and that would balance the composition of the Board which is at present in majority formed by laity.

HWA International, Trust Processor Update:

Doug mentioned that June data is ready to import and it is anticipated that live and parallel data being input with 1 October 2021, with the expectation that after January 1st, 2022, the Trust Processor software will be totally live and the first contractual payment will be due to HWA at the end of the 1Q22.

Budget reporting and 2022 Budget:

Tonya Downard, CPA started by pointing to the BFI Dashboard (found on the Trustees’ intranet) which she and Ken maintain, and which captures a snapshot of all the areas of activity at BFI including the current budget in a graph comparing projected versus actual figures. She pointed to the value of Assets under Management (AUM) of $55.4 million at the end of the 2th quarter of 2021 and the upward trend of AUM over the last decade. Tonya asked the Board to give her feedback if the Trustees would like to see additional data reported on the dashboard.

Q.Mihaela Sexton asked what areas contributed to the growth of 3 Million in AUM in the last two quarters.

A.Doug Morrow answered that it is a combination of four-digit individual investments (primarily custodial) and six-digit estate gifts reaching maturity. Doug and Ken affirmed that even last week they each did financial coaching with individuals who are beginning the stewardship journey. However, there is much potential for growth. Strategically BFI has five divisions and does not plan to increase that number in the near future, but in Doug’s estimation only 1-2% of Illinois Baptists are aware of the BFI and what it does. With the implementation of the new accounting software which can handle AUM of 150M, we are positioning ourselves for economies of scale.

Tonya referred next to the 2022 Proposed Budget (on the intranet) and noted some changes compared to the 2021 budget:

● BFI Bonds line is projected to remain the same as the projected 2021, even though the realized amount had a negative variance for the first two quarters of 2021 – the feeling is that the projection is realistic

● The Loan Processing Fee line remains blank – Doug commented that even though BFI is authorized to charge loan processing fees, it has suspended its 1% origination fee on loans during Covid

● The Contract Clerical Support line will be -0-

● The IT – Accounting Software line will be significantly larger because it will involve paying both Trinergy per contract until it expires, and HWA – Doug pointed out that the cells in the budget form which have a small black triangle in the top-right corner, contain comments or breakdown of totals for details.

● The Vision Fund line – is a one time line item that will be used in 2022

Q. Dan Huffman asked if the Office Rental to IBSA line is increasing every year or it is constant

A. Doug Morrow answered that it is constant, that the BFI offices are back on the 3rd floor in the IBSA building and the rent is flat, being based on square footage and including all utilities.

Q. Tim Sadler commented that the rent seems high compared to what he pays in Decatur

A. Doug responded that it is smaller compared to other offices, at least per pre-covid data, and that IBSA has a demand on office space even though some vacancies still exist in the building.

Tonya concluded her remarks by thanking the board for deciding to proceed with the introduction of the new software before the Trinergy contract ended. She stated that even though it is a grueling process right now to transition to the Trust Processor, she is excited about the increased versatility, better reporting tools with more transparency this application will allow in the near future. Doug asked for prayer for a smooth transition process to the new software.

Investment Performance:

Doug stressed the seriousness of the fact that 2022 is a pivotal year. In the BFI model of five divisions, only two divisions that provide income streams: the management fees from AUM and the BFI Loans to churches.

Next, Doug introduced Marcus McGlasson, VP at partner Bank of Springfield, who presented the investment performance of the Blended Pool, Long Term Fixed Income Fund and Endowment Accounts. Distinction was made between reporting growth in Yield (Y) vs growth in Total Return (TR), where TR is a function of asset gain and yield.

Blended Pool performance: Total Return is 10.89% annualized compared to 7.16% in 2019 and 13.5% in 2020. This fund is comprised currently of 55% quality equity and 45% bonds

● Long Term Fixed Income fund performance: Yield of 5.15% compared to 5.29% in 2019 and 3.99% in 2020. The TR on this fund is stable at around 7%. This fund is comprised of >90% fixed income bonds. In the last 12-18 months this area experienced challenges, not just due to a slower economy, but also due to the Government involvement meant to drive the interest rates low. BOS worked closely in this period with BFI Investment Committee to offset some of this challenges. One strategy was to invest in utility funds: they are a conservative equity that keeps pace with inflation and their the long term distributions will be tied to the prices they charge which have increased at a rate of 19% in the last year

● Endowment Fund has a Yield back at around 5% after its decrease to 3.99 % in 2020. Some structural and strategy changes were done on this fund as well in the past year in consultation with the Investment Committee. For the first time a TR of 6.87% was reported on this fund in 2021. This is linked to the motion that was presented later by the Investment committee.

Q. Dan Huffman asked if BFI struggled with companies rushing to call their bonds in today’s economy.

A. Marcus McGlasson answered in affirmative.

Q.Dan Huffman asked if Doug is discerning an uptick in enthusiasm among Illinois Baptists regarding investing with BFI.

A. Doug answered that he has no tool to measure it at the state level and that all his evidence is anecdotal. He would like to have an analytic tool to measure BFI name recognition, for example.

Q. Dan Huffman commented that the challenge to reach pastors in his association is that the churches are small and the pastors are bi-vocational, therefore have limited time and interest.

A. Doug answered that we will be successful at promoting BFI when we will be helpful to pastors. The Biblical Financial Management Series videos were designed with this purpose: to be a resource to pastors.

Q Dan Huffman asked if the BFI connection with Directors of Missions in the IBSA Associations is strong enough to promote BFI through DOMs.

A. Doug answered that some DOMs are very excited, but that there are a number of Associations that do not have DOMs at this time.

C.Pam White commented that in a small way we can promote BFI programs when the Trustees present the educational scholarships, if we ask to have five minutes extra during the service.

C.Tim Saddler advised that we should not ask for extra minutes, but instead use the opportunity to promote BFI anyway.

A. Doug suggested the use of the explainer video “What is BFI?” found at https://baptistfoundationil.org/ Baptist Foundation of Illinois - Christian Stewardship in Illinois (baptistfoundationil.org) as a preamble to the scholarship presentation. The video could be viewed over the church wifi, or it could be downloaded to a memory stick.

Q. David Grove commented that the most effective promotion is possibly done by the Trustees in their own churches. In this regard he asked Doug to name one thing that we should promote above others.

A. Doug answered that we should make the pastors aware of the BFI Cash Management Fund which produces 1% interest, 4 to 10 times higher than the average checking account in a local bank. The churches have the potential of increasing their ministry funds and maintaining the same level of liquidity by investing their cash in a BFI cash management fund. Doug estimates that there are 75M-100M dollars in church funds sitting in banks across the state and producing very little interest.

Doug concluded the Executive Director’s report by pointing to the book “Don’t Waste Your Life” by John Piper, which was offered by the Foundation as a gift to each Trustee. He considers it an impactful book that should be shared.

Administrative Committee Report and Recommendations

The report was presented by Dan Huffman, Vice Chair. During the Administrative Committee meeting from 9/17/2021 the following items were discussed:

● The Proposed budget for 2022 was examined in great detail and with a decision of 7-0 the committee submitted to the whole Board the motion to approve the 2022 BFI Operating Budget as presented. Motion passed unanimously.

● The Trustees Self Evaluation Survey discussion will be postponed to the Spring Committee Day due to the large number of incoming Trustees

● The committee received an update from Doug on the timeline of implementation of the HWA International Trust Processor software

● The need for greater harmony and mutual understanding among BFI, IBSA and BCHFS. These three Illinois Baptist entities have the common goals of expanding God’s kingdom and increasing stewardship and generosity among Baptists. In this regard, the Administrative committee submitted the motion to authorize BFI management to begin a process of drafting a Memorandum of Understanding with IBSA and BCHFS, acknowledging and encouraging our shared efforts in our general work to expand the Christian Kingdom and our efforts to improve stewardship and generosity among Illinois Baptists. Chairman David Grove asked for advice from the former Chairs of the Board present, and they agreed that such a document was necessary and timely. The motion carried without dissent. The long term goal is to increase awareness and understanding among IBSA, BCHFS and BFI with the scope of mutual promotion.

● The Administrative committee elected the following officers for 2022: Don Carlyle, Chair; Pam White, Vice-Chair; and Ben Foxworth, Secretary.

Investment Committee Report and Recommendations

David Rochleau, Chair, gave the following report:

● The Investment Committee on 9/17/ 21 looked at investment performance as presented earlier by Marcus McGlassen and Doug Morrow.

● In order to stabilize the income stream generated by the Endowment fund and compensate for the fluctuations in yield seen in the past year, the Investment Committee recommends the following motion: BFI is authorized to distribute endowment gifts at a calculated rate based on the total return for 12 regressive quarters. Twice annually, the Investment Committee will recommend to the Board of Trustees the distribution rate for the subsequent two quarters following a meeting. For quarters 4Q21 and 1Q22, the Investment Committee is recommending a distribution of ¼ of 5%. The motion passed unanimously.

● The Investment Committee has elected the following officers for 2022: Dave Rochleau, Chair; Alan Monroe, Vice Chair, and Bruce Guebert, Secretary

Scholarship Committee Report and Recommendations

Tim Sadler, Chair, mentioned the following issues discussed at the Fall Scholarship committee meeting, held via Google meets on 09/17/2021:

● Next year’s scholarship evaluation session will be held on the last Saturday in February (02/26/2022) at Tabernacle Baptist church in Decatur, instead of the first Sunday in March as previously announced. All trustees are encouraged to participate and bring other evaluators to the event. For overnight accommodations, there is the Decatur Conference Center and Hotel, located near the church.

● The Committee has always aimed at making the evaluation process as objective as possible. In this regard additional procedural steps were discussed.

● The Scholarship Committee awards an annual grant of $2500 to a church initiative for community outreach. There were seven grant applications submitted this year. The committee advanced the following motion: BFI awards the 2021 Christian Service Grant of $2,500 to the First Baptist of Litchfield for their Tending the Vine Children’s Ministry. The motion carried with 100 % Yes votes.

● The Scholarship Committee has elected Tim Sadler, Chair; Anthony Richardson, Vice Chair; and Nedra Robinson, Secretary for service during 2022.

● Mihaela Sexton asked if possible that all grant requests be made available to the Trustees for their personal consideration, since many of the projects were worthy of support, and only one BFI grant was awarded.

Executive Director Performance Evaluation

David Grove, Chair, mentioned that he had asked Vice Chair, Newlin Wollaston, to compile the results of the Evaluations surveys submitted by the Trustees and to lead the Performance evaluation discussion which took place on 10/01/2021 prior to the BOT meeting. Doug, David and Newlin were present. Newlin mentioned that they had a serious, positive and candid discussion during the evaluation, and Doug was receptive when presented with growth opportunities. Doug responded that he delights in his work and values the relationships he formed over the years with the Board members. He takes seriously their accurate feedback because it prepares him to be ultimately ready to give an account to the LORD.

David Grove mentioned that the evaluation is available to the Trustees upon request.

Election of 2022 General Board Officers & Advisory Committee Recommendations

The following motion was submitted by Alan Monroe to select as General officers for 2022: David Grove, Chair of the Board, Newlin Wollaston, Vice Chair, and Mihaela Sexton, Secretary. Julian Williams seconded. The Motion passed unanimously.

Other Business

There was no other business to discuss.

Special Recognitions

Doug thanked Dan Huffman for his service as a Trustee. A special recognition from the foundation will follow for Dan and possibly other departing Trustees.

Adjourn

The Board adjourned for lunch at 12:25 and reconvened at 13:00 for annual group photo.

Respectfully submitted, Mihaela V. Sexton, Board Secretary