National Guard Education Foundation

National Guard Education Foundation July 21, 2006 Minutes

Present: BG Robert V. Taylor MG Claude A. Williams MG Gus Hargett Brig Gen (Ret) Kenneth Ross COL Al Faber Brig Gen (Ret) William Spruance BG (Ret) Robert Lawson COL (Ret) Mike Doubler Mr. Lewis King COL Tom Kirkpatrick

Absent: Maj Gen (Ret) Donald Sheppard Maj Gen Roger Lempke

Others Present: Brig Gen (Ret) Stephen M. Koper Ms. Hazell Booker Mr. Jason Hall Ms. Pam Buckler Mr. John Buckler Ms. Loretta Fills Lt Col Pete Reneghan Mr. Lewis King Brig Gen (Ret) Robert Dutko Col (Ret) Ray Magill CCMSgt (Ret) Ed Brown Ms. Leslie Pine

Gen Ross made the motion to approve the minutes and Chief Brown seconded.

Gen Taylor called to order the meeting of the National Guard Education Foundation at 1535. COL Faber called roll and reported a quorum was present.

Gen Taylor asked if there were any corrections or additions to the March, 2006 meeting minutes.

COL Faber gave the changes: add Gen Spruance to the Present list; and on the final page a clarification of the first paragraph about the Gen Spruance question. It should read, “Gen Spruance asked that Jason make sure that an advertisement for the Guard Muster appears in every issue of the magazine and to talk to John Goheen about it.

1 Gen Hargett moved to approve the minutes. Mr. Lewis King seconded. Motion carried.

Audit Report—Leslie Pine, Arge, Wiltse, Robinson

Ms. Pine reported that the opinion of the audit firm is an unqualified or clean opinion, consistent with prior years. She reported that total assets decreased by about $107, 000 or about 2.5% to 2.6%, due to an increase in cash and increase in investments, off set by a decrease in the note receivable from NGAUS.

Ms. Pine reported that liabilities remain fairly consistent. Total net assets decreased by $118,000, net loss for the year was about 2.9%.

Overall total revenue decreased by about $83,000, or about 2.5% due to decrease in interest on the investments and a net gain, reflected by fluctuation in the stock market. Expenses have increased by $46,000 due to a rent increase and other salary and educational related expenses.

The Statement of Cash Flow shows the sources and uses of cash with a change in net assets of $118,000 for 2005. There was cash inflow of $351,000 due to collection of the notes receivable from NGAUS. Overall total cash increase of $204,000 from 2004 to 2005.

Ms. Pine reported on the notes to the financial statement. Note 1 show no significant changes to existing policy. Note 2 shows total investments $1,328,582. Note 3 show summary of property and equipment. Note 4 show temporarily restricted net assets, donated or contributed assets where the donor placed a restriction on the contribution, total of $3,537,199. Note 5 is a required disclosure for non-profit organizations to show how the money is spent. Note 6 shows the retirement plan. Note 7 show the transactions between NGAUS and the Foundation. Note 8 is a required disclosure and because cash is held in financial institutions and is not fully insured.

Ms. Pine reported that the supplemental material that follows is for information purposes, which is not audited.

Gen Ross moved to adopt the report of the independent accountant as to the audit for 2005. General Hargett seconded. Motion carried.

Gen Taylor commented that the butcher-block paper in the room is being used to record taskers that are documented in the minutes so they can be executed properly.

Gen Koper asked that the originator of the tasker make sure it is recorded on the paper to be properly documented as a tasker. COL Faber concurred and said he will develop a tracking method for each tasker and actions to be taken.

Old Business:

2 Fund Raising Report—Brig Gen (ret) Robert Dutko

At the March 2004 Board of Directors meeting, I had agreed to serve as the Fund Development Director for the purpose of raising funds to support the National Guard Educational Foundation (NGEF). The proposal was to conduct a two-year program that began in July 2004. I had agreed to accomplish this task on a volunteer basis. A Fund Raising Plan was prepared and approved by the NGEF Board of Directors at the July meeting. A goal was established to raise $3M dollars for the NGEF Endowment Fund. The plan was immediately implemented and the Fund Raising started in July 2004. Several individuals were recruited to serve on the “TEAM” to achieve the objectives and goals established by the Fund Raising Plan. The “TEAM” included the NGAUS President, members of the NGAUS staff, the EANGUS President, the entire NGAUS Board of Directors, Defense Industry and Benefactors. The results of the combined effort are reflected below. This illustration does not include $40,000 from our neighbors due from 2005 and 2006.

2003 2004 2005 2006 $93,405.53 $142,516.09 $91,448.00 $87,700.00

Sikorsky Aircraft, Lockheed Martin, Booz-Allen Hamilton and Northrop Grumman made significant contributions. Individual benefactors, retired Brig. Gen. William Spruance has made significant contributions to the NGEF, and LTC Richard Pritzker of the Tawani Foundation visited the Museum and also has made significant contributions... The Fund Raising effort continued to produce a steady flow of cash over the past three years, however has not kept pace with achieving the established goal of $3M dollars. Having not met the established objective the Treasurer and Finance Committee has decided to seek a Professional Fund Raising company to develop a plan to raise funds for the NGEF. I personally have never been in favor of paying someone to raise funds and receive compensation. The capability to raise funds for the NGEF is available within the NGAUS staff and the Board of Directors. I also am of the opinion that we may be misrepresenting the amount of resources required to support the NGEF. When compared to all the entities reflected in the Budget and Audit consideration might be given to either include NGEF support in the NGAUS or Insurance Trust Budget. A large portion of the deficit in the NGEF Budget is driven by the cost of rent and equipment rental. Surely, NGAUS has responsibility to support the Education process as stated in the By-Laws of this organization. Keep in mind also the Endowment has exceeded $1M dollars and the entire Education Foundation is worth over $3M dollars. We have worked hard to increase participation in the Guard Muster Program. I am certain that we all feel that if this program met its full potential it would produce a large portion of the support needed to operate the NGEF. Several initiatives have been implemented to increase participation; however, results have not been favorable. This program has also suffered from a lack of credibility. There was difficulty encountered in tracking participants, however when this was detected corrective action was taken. With

3 the transition to the new web site, I suspect there may be several potential problems that require corrective action. I personally brought three problems to the attention of the Director and I suspect there are many more that people are not aware of. These deficiencies must receive immediate attention or we can expect the Muster program will encounter serious ramifications. Marketing of the Fundraising for the NGEF also requires more attention. When we started to implement the Fund Raising effort, I requested a page in the magazine every month. In the past two years this may have happened three or four times. Some months nothing appeared. There were significant contributors that were not highlighted in the magazine. I had requested all the contributors be listed for a given year. When it appeared in the magazine only half were listed and in a format that was difficult to read. I still maintain that a page should be dedicated to recognize significant contributors, and place more emphasis on marketing the Guard Muster program. In reviewing the read ahead material for the 2006 Budget, I discovered a figure of $50,000 to develop a Fund Raising plan. Obviously, I am not in favor of this action. We have a plan that we have been using the past two years and have provided favorable results as reflected in the beginning of this report. It is apparent that the results produced by the NGAUS staff thus far, for 2006 validates that the ability to rise funding for the NGEF is within the capability of the NGAUS staff. With the support of the Board of Directors, this could be further enhanced. In lieu of hiring, someone to raise funds for the NGEF, we would be better served to direct our efforts as a “TEAM” to achieve the objective. In closing, this is my final report and should not be taken in a negative fashion. It contains my opinions and what I feel is in the best interest of the organization. I wish to express my sincere appreciation to everyone on the NGAUS staff and the Board of Directors for the support rendered to me during the past two years. It has been a pleasure to serve as the Fund Development Director and I will continue to support the NGEF in whatever course of action it decides to take in the future. It is imperative that we strive to educate Congress and the general public regarding the value and resources required to maintain a strong and effective National Guard.

Gen Taylor said that on the recommendation of the Finance Committee the three presentations for the OIF/OEF proposal would be presented by those companies.

Jason reported that the Finance Committee recommended the $50,000 be added to the 2006 mid-year budget to hire an outside agency to create a fund raising develop plan. The plan will include the NGAUS membership and address funding for one of the main objectives for NGAUS. $25,000 was added for Board of Directors special projects and $25,000 from the NGEF fund raising budget.

Discussion followed and it was made clear that the money was made available contingent on Board approval of one of the three companies.

Col Reneghan commented that the recommendation of the Finance Committee was approval of the study contingent on the Boards’ commitment to implement the plan and

4 to devote the time and resources necessary to facilitate the plan sine it is recognized that the staff cannot succeed without the Boards’ 100% involvement.

The Presentations: The Sheridan Group: Nelson Cover, President/ Dave Coyne, Executive Vice President  23-year-old company, with over 200 clients  Basically implement a fund raising plan  Some clients include, Carnegie Endowment, Randolph Mason Academy, Ocean Conservancy, Resources Institute, SRI foundation, Valentine Richmond History Center  The will do a development assessment, looking at every thing that has been done to date: records, fundraising, supporters, staff, donors, ect. And where the see fundraising opportunities  Do comparative analysis to other organizations  Independent search for prospective supporters  Analyze membership potential  Will do a 12 month comprehensive development operating plan with monthly to do list on strategy  Do an email based survey  Plan will include a detailed set of recommendations including strategies and potential contributors  The total cost for their services is $39,600

Gen Spruance asked how many clients they have and the answer was 15 at present.

Gen Doubler asked how long the assessment process would take, and the answer was 60 to 90 days.

Gen Ross commented that in addition to the fund plan amount, a budget for raising $3 million would be 4-6%, at about a $250,000 budget in addition to the plan, totaling $300,000.

The Presentations: Changing Our World—Bob Holke/Karen Davis  Michael Hoffman, President  Started 7 years ago  Partner with organizations in their best interest for their long term vision  Located in Boston, Pasadena, New York, Stamford, CT, DC  Non-profit Philanthropy Company/120 working in the company  Three major components, fundraising, corporate philanthropy, and private philanthropy  Have the expertise to bring a variety of services to the table  Offering to look at the current process and see how to maximize the fundraising process and see what they can offer.

5  Provide a fundraising blueprint  Four common denominators of fundraising of the plan; case for support, leadership, prospects, and a detailed plan  Study will accomplish four other objectives; dialogue with donors, serve as a cultivation tool, a prospecting tool, identify systems, staff and procedural improvements  Timeline for study is 3-4 months  Develop a team to work with them  They will have a senior manager, a project manager, an E-philanthropy expert, and researchers  They will present a final report with recommendations on how to best proceed with the fundraising  The cost for the study would be $30,000 project fee

COL Faber asked if their bottom line strategy was an internal strategy to get more money from our members for our goals and objectives or was it to go outside the organization for contributors. The answer is yes, both.

Discussion followed about contributors and the plan strategy.

Gen Dutko asked about an estimate on cost for travel and other expenses. Karen replied that cost varies dependent on different situations. She said that the cost could be $5,000 at the most.

Chief Brown asked Karen to restate the American Association of Fundraising Professionals policy about collecting money. She said it is a professional society for ethical policies and procedures and for a consultant it is a no-no to take a fee based of a percentage raised for an organization. This is done to protect the non-profit organization.

Skystone Ryan, Inc—Susan Lasker Dankoff, Managing Partner  Here to present the concept of conducting a development planning study  The study will measure the organization against key elements that they know will make the organization a success done by talking to people  Proposing to talk to 25 key constituents who are involved in NGAUS and NGEF  Study takes about 3 months  Will do group interviews possibly the state association  Study cost is $39,200 flat fee  She presented eight key elements for fundraising success: compelling case for support, institutional strategic plan, development plan, qualified prospects, a committed board and leaders, commitment to stewardship of donations, understanding donors, understanding the impact of major gifts  Look at NGEF fundraising potential  Elements of development plan: assessment of past fundraising, case for support, strategy, recommended activities, roles, and budget

6  They will use a study approach: interviews, analysis, present oral and written report  Benefits of development plan; focus of what has to be done, track return on investments, optimizes fundraising success, ensures confidence, volunteer recruitment  Firm has been in business for about 30 years, represented by senior consultants

Gen Spruance asked Susan if her firm is the sole fundraiser for the Red Cross, she said they had done a million dollar fundraiser for the national Red Cross.

Gen Ross inquired as to the number of staff members and Susan said there are 20 consultants.

Gen Ross thanked Col Reneghan and the Finance Committee on their efforts to get the figures from the firms. He also thanked Gen Dutko for the job he has done.

Gen Ross commented that all the presentations look alike, and are focused on the organization raising the money. Gen Ross also commented that the organization had not given Gen Dutko their total support, which made his efforts to raise money harder and until they change the corporate culture to do this we are just buying another plan to put on the shelf.

Gen Ross commented that the board meets at a minimum of 6 times a year and spend almost none of that time talking about fundraising, which he views as critical. He said that if the corporate culture is not changed in the Board and the NGAUS family, and those presentation groups have made it clear, we are not going to raise money no matter what plan we buy or to whom we talk. He said we could look at ourselves first.

Gen Hargett commented that he agreed with both Generals Dutko and Ross, and that we have not been as successful as we might have been because we do not market ourselves very well. He said he is opposed to pay a company to do what we know we need to do and have the expertise to do within our organization. He said if we are not committed to raise money we will not, and if we are, then we do not need a fundraiser.

Gen Williams commented that he is afraid that the results of doing a fundraising study would be that they would target the same corporations and people with whom we already do business. He said he was opposed to spending $50,000 for a fundraising plan.

Col Magill commented that he thought that the plan was to develop a list of potential contributors. He said it would be beneficial to work up a list that includes the Fortune 500 companies who have budgets for charitable organizations. He said he would like to see us expand on our current plan and see what results come from that.

Gen Taylor commented that this was a wake up call for him and what he gained from the presentation groups is that we cannot just rely of Hazell or Gen Dutko, but the Board has to roll up their sleeves also.

7 Chief Brown said that EANGUS had hired a fundraising company a few years ago for $10,000 a year to raise funds, which was taken from the funds raised, with no up front money. He said the first year there was a donation of $250,000 from Discover, which they were using for the National Guard Relief Fund. He said that the company did not raise any more money for two years at an expense of $10,000 per year to EANGUS, after two years they severed the deal. Chief Brown said that since then, on their own, they have gotten a $500,000 contribution from Prudential. He said, however, their committee that is assigned to raise money, have raised zero dollars.

Gen Dutko commented that much of the original plan has already come to fruition and he agrees that we should continue with that original plan. He said that another part of the original plan was to apply for grants and that has not been done. Gen Dutko said he thinks we have the wherewithal; we just need to get serious and put a team together to get it done.

Chief Brown said that you have to get smart on the fundraising process, because it is not an easy process.

Jason commented that time is of the essence and what is needed is to form the committee and give them the tools and resources to raise the funds. He urged the Board to approve the fundraising study proposal.

COL Faber commented that a project like this would be a full time job for a committee. He said that the attractiveness of hiring a fundraising company to do all the work for you has a real advantage. He said most colleges and universities have full time staffs dedicated specifically to raising money. He suggested that the $50,000 budgeted could be used to hire someone for a year to concentrate on doing all the work, and form a committee to work with and advise that person. COL Faber suggested that if that is not done then an outside firm should be used.

Jason commented that it was mentioned at the Finance Committee meeting, to use a fundraiser to raise funds and after a few years, hire a fund development director.

Gen Koper commented that every one of the three consultants have a long list of clients, and the reason for that is that organizations have found out that they need professional help to raise funds. He said that consultants do not tell you anything you do not know, they just tell you how to get motivated to make things happen. A consultant lends to you and your organization a degree of professionalism that no one can question; because they are professional consultants who raises millions of dollars with plans, who will impose a discipline on an organization to make sure it happens. Because, that organization has been paid out good money and they have made a philosophical commitment that the plan will be executed. He said that he feels that the discipline is needed that a professional consultant with a plan would provide and we need to make that investment. Gen Koper commented that the consultant would provide an analysis, and provide a plan, and how to implement it. He said that we would have a professionally done plan from people who

8 have done this time and time again, who would provide information on how to tap into the existing resources, but we will have to do all the work.

Mr. King commented that he agreed with Gen Koper in that he thinks we really need some direction and that we should look at using a professional. He said it is important that when you ask for donations, to make sure that you know how the money will be used before you solicit the contributions.

Discussions followed among members on the importance of providing a designated area where the funds will be spent before asking for them.

Jason commented that the consultants stressed that it is also important to create a sense of urgency when asking for contributions. Gen Ross Commented he had no problem with that.

Gen Hargett disagreed, said he does have a problem with that concept, and made reference to the NGAUS objectives.

Discussion followed between members concerning meeting the goals of the NGAUS objectives; and how they tie into supporting the Museum and the Library.

Gen Ross commented that the issue is about fundraising, and if the Board thinks, it is important to raise money for a tax-exempt organization, which will strengthen the overall capability, and then we ought to do it. He said that typically board members are chosen for their ability to contribute funds.

Gen Ross said that we would have to change our corporate culture about how we raise money with or without the professional plan.

Gen Spruance commented that he agreed with Gen Ross. He said we are memorializing the Guard and we have a unique position at this physical position with internet capabilities and with the Guard Muster. Gen Spruance said that something has to get started and he will put up $30,000 dollars today, right now, himself. He called upon the other members to donate something to reduce that $30,000 so that they would have made a contribution.

Gen Ross said that is how it is done. He said he had been waiting for an opportunity to commit to a Legion De Lafayette and would do that now with a $10,000 contribution.

Gen Ross wanted to know if it was the will of the Board to make a change, and spend the money for the professional plan and then implement the plan. He asked if the members are committing their support.

Mr. King made the motion that a professional consultant group be hired. Gen Lawson seconded. Opposed-4—Gen Hargett, Gen Williams, Gen Ross, Gen Spruance

9 Yes—Mr. King, Col Doubler, Gen Dutko, Gen Lawson, COL Faber Gen Taylor did not vote. The motion passed.

Gen Hargett asked if this recommendation would have to be made to the NGAUS Board tomorrow. Gen Ross answered no, that the recommendation of the Finance Committee is a $25,000 split between NGEF and NGAUS.

COL Faber suggested appointing a group to sit down with the three consultants and report their recommendation at the November meeting. Gen Hargett said the November deadline would be missed.

Gen Ross made a motion to accept Changing Our World, Inc as the consultant. Col Reneghan concurred as the Chairman of the Finance Committee. COL Faber seconded.

Gen Spruance made a substitute motion that Gen Koper make the final decision on which group that he thinks we can best accomplish our mission. He said if his substitute motion is accepted he will contribute the $30,000 with any member of the Board who wants to contribute to reduce that amount so that he does not have to pay the total amount. Gen Spruance so moved.

Gen Ross accepted the substitute motion and withdrew his motion. Gen Ross seconded in favor of the substitute motion offered by Gen Spruance. Gen Ross seconded. COL Faber withdrew his second on the first motion.

COL Faber suggested that one solution is not to adjourn this meeting and Gen Koper re- interview the groups and report to the Board, then the Board could have a telephone vote based on the recommendation. The meeting would be adjourned and closed at a later date.

Gen Koper commented he would read the presentation materials again all of which do not offer much variation in them.

The motion was restated by COL Faber, that Gen Koper make the final decision from the three candidates selected and approved by the board, and report back to the board within seven days. Gen Ross seconded. Motion carried.

NGEF Report—Jason Hall Jason reported on the OEF/OIF Presentations. The first two were the ones not recommended by the Museum Advisory Committee. If approved by the Board, the display will be ready to be presented by Industry Day, December 6, 2006. He thanked Hazell for her efforts to help raise the funds for the OEF/OIF.

The Presentations not recommended by the Advisory Committee: Adler Display: Have done some work with NGAUS Their display would go into the second to last room in the Museum

10 Display not secure

Xhibits Corporation: No text, but photographs on the wall Can only display 100 photographs; more would cost additional The company can only enter photographs at an additional cost Very little of the story of OEF/OIF is told

The display that was recommended by the Advisory Committee is: Hartman Historical Services: Owned by Doug Hartman He is a Guardsman who specializes in doing military history exhibits He has a vested interested Jason will be able to add exhibits at no cost Will have a kiosk listing war casualties All donors to the exhibit will be added Touch control for each state displays Manikins Encased in plexiglass

Gen Ross moved to adopt the Hartman Historical Services. Gen Hargett seconded. Motion carried.

Jason gave an update on Normandy Monument and gun from the French Army Museum. The conditions they reported. Sure it is a German 88 gun Seaspray causing perforation to the gun Bunker is imploding Beams are buckling Rebar protruding Tires are gone and gun is on cinder blocks

Their recommendations: Ice blasting which does not cause as much dust Remove old paint and repaint Secure Bunker

Jason reported the web site has been moved from KMA Net. The process has been slow but they are working out the bugs and taking care of issues as they arise. The Guard Muster will become more user- friendly.

Budget Report—Pam Buckler Pam reported that most of the things from the budget had already been approved, which included the exhibit, the fund development plan and $10,000 was added for the cost for repair to the Normandy Monument. She reported that overall the revenue and expenses from the budget went down $3,250.

11 Gen Ross moved to adopt the mid-year review changes to the budget. Gen Hargett seconded. Motion carried.

Gen Ross offered a recommendation from the Finance Committee that funds be approved, to do a letter mailer to our members, for a contribution to the Education Foundation in view of its tax-free status.

Gen Ross moved to accept the recommendation from the Finance Committee to send a letter to our membership asking them to make a tax-free contribution.

COL Faber said he would second the motion with modification that the letter would target the Museum, because a contribution to a Museum in Washington would be more appealing. Gen Ross agreed to the modification.

COL Faber suggested that the mailer be address labels. Gen Ross said that is a different thing and would take more effort to produce. Pam said that NGAUS had done the address labels before.

Gen Ross said he would accept any modification as long as we send something in the mail asking for a check.

Chief Brown offered the EANGUS mailing list for the mailer, which includes over 60 thousand people.

COL Faber seconded the motion with the caveat that it go with the Museum too.

Gen Ross said he was sure we would get the mailing cost back and that the Finance Committee will find the money to fund the project.

Gen Spruance commented that the website should include all the projects being done in the Museum so that it will be visible to the public. Jason said that one of the pages will include that information.

Call for question on the motion. Motion carried.

Gen Williams moved to adjourn the meeting. Gen Hargett seconded. Motion carried.

Col Kirkpatrick suggested a motion to clean up the By-Laws to take the words ex-officio out of the requirements that the Board officers hold on this committee. He said it is in the By-Laws two times and he would like it to be taken out. He said ex-officio has other meanings and it does not need to be in there. Col Kirkpatrick said he would present it to the Board on Saturday.

Gen Ross moved to accept the recommendation of Counsel to delete the two entries of ex-officio from the By-Laws. Gen Hargett seconded. Motion carried

12 On suggestion from Gen Spruance, the Board applauded and thanked Gen Dutko for his fundraising efforts.