JAMAICA MEDICAL FOUNDATION 24th ANNUAL GENERAL MEETING, Sept 15, 2011 KNUTSFORD COURT HOTEL CHAIRMAN’S REPORT 2009/2010 INTRODUCTION Our Guest Speaker, Mr. Paul Lalor, President of the Insurance Assoc. of Jamaica, ‘IAJ Colleagues of the Jamaica Medical Foundation, Insurance Company Executives, Other distinguished attendees, Ladies and Gentlemen. Welcome to this the 24th AGM of the Jamaica Medical Foundation. It is always a pleasure to meet and update you on the activities of this very important Foundation and, this year is no exception especially since I know that , next year this time, I will be telling you of the successful Banquet we had in March but which, ofcourse, does not fall within the purview of this 24th Annual Report. Still, allow me very briefly to let you know how much we are indebted to our multi-tasking PR Trustee, Mr. Thomas (Tommy) James who, almost single handedly, put on one of the best, most enjoyable and profitable banquets that we have ever put on. Mark you, he got some good support from the rest of us Trustees, and many of you in the audience who attended but, try as they might, nobody can take the lion’s share of the credit from Tommy. START WHERE LEFT OFF IN LAST REPORT Last year, I ended my Report by telling you of the four biggest items on our agenda. These were 1. Constitutional review to bring us in closer alignment with the insurance industry represented by the ‘IAJ. 2. Trip to the Diaspora in 2011 to ‘test the waters’ and see if our assumptions about getting financial contributions from it are correct, 3. The question of the adequacy and relevance of a capital base of Twenty Million dollars in a sea of million-dollar requests 4. The Foundation’s 25th anniversary in 2012 I would now like to continue where we left off, to give you a perspective on developments and how these could affect us positively going forward. Of course, I will also speak to our financial performance and continuing Public Education initiatives so that gives us six (6) major headings for discussion.
AGENDA ITEM # 1 CONSTITUTIONAL REVIEW As you know, the Foundation started as the outreach arm for the life insurance industry of the 1980s. Then, there was a close working relationship between the Foundation and the leadership of the industry because, in a real sense, the industry was the parent of the child (‘JMF) but, this relationship went further than just parent/child. During those times, the Foundation knew for sure where its support base was and had the confidence that this base was there to support its various functions and assist in growing its capital base. The idea was that it (Foundation) would grow to become a really pivotal Jamaican philanthropy for the benefit of future generations. It is now, however, a matter of public knowledge that the Jamaica of the 1980s when, for example, the exchange rate was in the region of J$10 or less, is a different ‘person’ from what it is today. Nearly everything has changed and, the economy has become not just tight, but stifling. The net result is that the industry that gave birth to the Foundation is no longer in existence. Like the country, that industry has changed. There is now a new kid on the block (‘IAJ). To its’ credit, (and not because the ‘IAJ president is our Guest Speaker today) it has gone out of its way to be very accommodating to us. What your Foundation would like to do, however, is explore ways of upgrading the relationship from accommodating to one that takes us back to where we were when we were founded. This, ladies and gentlemen is the nexus of the matter. It means that if we, the Foundation, is desirous of ‘cultivating our own industry’ (such as we had in the LICA days) we had to look to see how best we could do that. Well, we have looked and, it seems to us that the best way through which we could ‘go back to the future’ would be for us to modify our Constitution to make way for a Jamaican Philanthropy but with the guiding hand coming from today’s new insurance industry. WHERE ARE WE ON THIS? We have gone far and not so far on this. Basically, your Board deliberated long and hard to finalize the new constitution to the point where we got the assistance of an Attorneyat-law to craft a version which we planned to ‘sell’ to the ‘IAJ with the hope that they would buy into it and give us the industry backing we have been searching for. Nothing was concretized during the period under review, however. I am pleased to tell you, though, that within the current administrative year, we have met with a delegation from the ‘IAJ and, ‘while we cannot count our chickens before they are hatched’ I can tell you that we have suspended further work on a new Constitution until we can meet again with the ‘IAJ to see how best our respective visions
and operations can best be aligned.. I believe that I will have much more to say on this when I report to you again next year. AGENDA ITEM # 2: TRIP TO THE DIASPORA IN 2011 It might interest you to know three things about how we see the Jamaican Diaspora. Firstly, we believe it is an area to be cultivated because, Jamaicans, despite everything else, are a considerate and generous people. Secondly, we sought to find the best fit through which we could do the ‘cultivating’ and ,in fact, probably one of the best ways came directly from our Guest Speaker today when we met with him last year on the very day of that AGM. Thirdly, in the 15 member Board that we envisaged under the new constitution, three places are reserved for the leadership of the Diaspora from the U.S.A., Canada and Great Britain. As you will understand, however, when you are dealing with other people’s money, and especially that of a charitable non-profit as your Foundation is, you have to be careful to make sure that every dollar expended replaces itself and preferably with a surplus. So, we have not yet ventured into the Diaspora but, again, I am sure you will understand our postponement of this venture since, you could say, we are in the middle of overhauling the constitution including the makeup of it’s Board. AGENDA ITEM # 3 ADEQUACY AND RELEVANCE OF A SMALL CAPITAL BASE What do we mean by ‘adequacy and relevance of a small capital base’? Let me put things into perspective. The Foundation was registered in 1987 with less than One Million Dollars in capital. Our 2010 Audit shows us having $20.4M up $3m over Audit 2009. In one sense, you might be tempted to say that, especially since we have gifted away better than $3m over the 20 odd years, that our coffers are in good shape and that we have nothing to complain about since there are not many Foundations in the country with $20m to their name. Then, 3 years ago, we boldly promised to assist the Jamaica Urological Society to find $15M for a research project. As I told you last year, we were not successful in that venture. Because of that outcome, we learnt a very profound lesson. In the words of a former prime minister, we found out the hard way that ‘it takes cash to care’ And this brings up the central point. Can a capital base of $20M do much in a sea of needs from both individuals and institutions? We have concluded that it can’t. Accordingly, one major consideration in the new future that we see, is a move to build up the capital base from $20M to $100M in as short a time as possible. The idea is to get 3
to a point where we become more relevant to a society where we will have to take up some of the slack from a public purse under siege. But, please know that the idea of a capital base of $100M is not new to our thinking. In fact, in the ‘old dispensation’ Prior to alignment talk) , we articulated a Hundred Million Dollar Initiative (in 2005) and invited hold-overs in the industry from the LICA days to assist us with contributions from their PR budgets over a 5 year period. Let me pause here to pay tribute to then LOJ, now Sagicor Life, which gave to the Foundation the first $350,000 of the $500,000 which we hope to get from them. This, then, gives you the rationale to our thinking. We want the Foundation financial base to grow to a stage where it can deal with a multi-million requests, from investment income, without jeopardizing its own ability to exist (i.e. through giving away its capital base) AGENDA ITEM # 4 THE FOUNDATION’S 25TH ANNIVERSARY IN 2012 Twenty five (25) years mark an important milestone in the life of anything, animate or inanimate, and, the same thing can be said for your Foundation . Should we do anything in respect of celebrating it? We have, just this year 2011, had one of our best banquets and, since we do them every other year, maybe we should stick to that schedule. Some might even say that we should use the time to see if we can build the hoped for closer bonding with today’s insurance industry. The bottom-line is that, while it remains on our agenda, we have not yet made a decision on what to do. We would be interested in any doable suggestion that you might want to share with us. INVESTMENT & FINANCE Despite the difficult economic environment, the ‘JMF’s financial position showed an improvement over that for the prior year in some key areas as follows, 2010 vs. 2009: a) total investment value $14.8 vs. $12.1 up 22 % b) surplus for the year $3m vs. $391T up 667 % c) finance income $1.8 vs. $2.2 down 18% d) administrative expenses $662,000 vs. $820,000 down 19% e) Total reserves $20.4 vs. $17.4 up 17 % As you know, consequent on the JDX, everyone who earned interest on their investment suffered a fall in interest income and your Foundation was no different. Happily for us, because of our equity investment protocol, we continually leverage our share value to give us an advantage whether the market is going up or down. What we do is to use our dividends to buy additional numbers of shares in the companies that pay these dividends. The result is that when share prices drop, a unit of 4
dividend buys relatively more units of shares and, when prices go up, the additional number of shares is reflected in a better than normal upswing in share value because, there are now more shares in the pool. We have benefited from this investment modality. In respect of the investment value at a) above, the breakout is: 2010 2009 Fixed income $5,094,138 $5,033,985 flat Equity value 9,728,963 7,051,689 up 38% PUBLIC EDUCATION It has now become the pattern for the Foundation to partner with the ‘IAJ on a Public Education Seminar during Insurance Week. In the period under review, a total of $384,500 was spent on this Seminar. As has been the norm, a number of health related topics were treated for the benefit of participants. The leadership of both the ‘IAJ and the ‘JMF also spoke at the Seminar. WEBSITE Finally, let me remind you that our website is now fully operational and can be visited at www.jamaicamedfoundation.com via the Jamaica Gleaner website, one of the most visited websites in Jamaica and the Diaspora. In due course, we will optimize it to receive funds from anyone wishing to contribute to whatever cause we are focusing on at any time. Thank you very much. .