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FFI Changes
December 2, 2202
Dear Friends,
I am writing to all active Friendship Force participants around the world, in my capacity as Chairman of the Board of Trustees of Friendship Force International (FFI), in order to provide factual information regarding events at the Dallas Conference.
I would encourage you to share this letter with all of your Club members and other Friendship Force contacts who may not otherwise receive this information.
The Conference was attended by some 400 people, which is obviously a small minority of our worldwide membership, and from some of the Emails and messages which my fellow Board members and I have received there does appear to be a considerable amount of distorted information, not to say unfounded rumour and speculation, going around the network of Friendship Force participants and contacts.
This letter is therefore intended to provide a factual description of certain matters surrounding events at the Dallas Conference, and the resignations of Mrs. Rosalynn Carter as Honorary Chairperson and Chip Carter as President of the organisation. In this letter I shall endeavour to stick to entirely factual matters, and if I feel that anything is my subjective opinion rather than a matter of fact then I shall state so.
I also apologise in advance for the amount of detail in this letter, but there is, in my opinion, no alternative if the situation is to be clarified. Also, I have received more than 200 Emails on this matter since returning home from Dallas, and as a full-time Chartered Accountant, and a spare-time unpaid Chairman of the Board of Trustees, I simply don’t have time to respond to them individually, for which I also apologise.
Can I first of all introduce myself to those whom I have not met or communicated with. My wife and I were on the first ever Friendship Force flight on 4th July 1977, and have been involved with the organisation ever since; our two daughters, neither of whom were born at the time of that first flight have also been very active in the Friendship force over the years. I have been on the Board of Trustees for 10 years, was Chairman from 1996 to 1999 and have been Chairman again since 19th July 2002 and retire as a Trustee at the end of December 2002.
Among the many highlights of our involvement were the home-hosting of Amy Carter for two weeks in 1982, the home-hosting of President and Mrs. Carter from 3rd to 5th
July 1987, and several visits to the Carter home in Plains - we have been personal friends of the Carter family for 20 years, and my personal relationship with Mrs. Carter, President Carter and Chip has always been warm and positive, although we obviously had a major difference of opinion in Dallas.
The Friendship Force is registered in the State of Georgia, in the U.S.A., and as such is subject to the laws of the State of Georgia. In 2001 the Board took legal advice regarding it’s responsibilities, and that advice included the following extracts:
“…service on a non-profit corporate Board requires more than just showing up at meetings and rubber stamping recommendations…”
“…Trustees must take their fiduciary responsibilities seriously…”
“… (Trustees) should exercise due diligence in their duties; and they should ask probing questions and demand accurate, timely, and well-reasons responses to questions…”
“…Board members must speak up and oppose matters that are not in the best interests of the organisation – that is their duty…”
It is my opinion that in taking the action that has been taken, the Board has endeavoured to fulfil it’s responsibilities.
In his presentation at the Dallas Conference, Chip supplied certain figures that require amendment.
He stated that $1 million had been raised during his Presidency, including $300,000 of “in-kind” contributions. Chip took office during 2000, but was effectively involved since the London Conference in December 1999. The audited figures in the accounts for the year to 31st December 2000 show “Contributions” of $181,655, and for the following year to 31st December 2001 Contributions of $67,632, while the Management accounts prepared by Staff for the ten month period to 31st October 2002 show Contributions received of $216,204, resulting in a total of Contributions received from 1st January 2000 to 31st October 2002 of $465,489.
Chip announced in Dallas that his father was donating a $100,000 speech fee directly to FFI, and a Board member advised that a contribution of $10,000 had been pledged; as at 26th November 2002, these contributions had not been received. I do understand from Constance Swank, our Executive Director, that Mrs. Carter has been in contact with her in order to identify the deficit that FFI will be faced with at the end of the year (which in my opinion will probably be between Zero and $100,000) and that it is Constance’s understanding that we can anticipate that the Carter family will make a final contribution to clear that deficit.
The best estimate of total Contributions received by FFI for the three years 2000 to 2002 inclusive is therefore somewhere between $465,489 and $575,489, and will most likely, in my opinion, be between $500,000 and $550,000, or an average of approximately $175,000 per year.
The sum of $300,000 to which Chip referred in his Dallas presentation as “In-Kind” donations, actually related to costs incurred. Thus, the projected figures for the year to 31st December 2002, as prepared by FFI Staff, show anticipated expenditure of $207,189 on Consultancy Services, PR and Marketing, and New database/Software. Communications have been received from the suppliers of these services that their true total value would be in the region of $500,000, but that they have been discounted to FFI who have been charged approximately $200,000 in total. In my opinion, as a practicing Chartered Accountant, there are two ways to consider this matter, either that the services were worth $500,000 and that FFI have received a worthwhile discount, or that the services have cost FFI approximately $200,000 of expenditure.
The other figure which requires clarification relates to payments made to retired personnel, and particularly to Wayne Smith, Claude Armendarez and Levy Tavares. Chip mentioned a figure of $700,000 in his presentation, and I know that there has been considerable speculation that this sum has been paid to Wayne Smith.
I obtained the relevant figures of payments to retired members of staff from FFI Accounts Department on Tuesday 26th November 2002. The total amount of planned payments over a three year period were $573,000, and Chip did “face” this liability when he took office, but following certain legal action the actual payments were significantly reduced.
The actual payments made to those three members of staff after they had retired were as follows:
$87,500 to Wayne Smith, Founder of FFI and President for 23 years.
$79,550 to Claude Armendarez, Finance Director for at least 15 years.
$25,000 to Levy Tavares, Regional Representative in South America for at least 15 years.
The total payments were therefore $192,052, and there were further legal expenses incurred of $106,915, although a small proportion of these fees did not relate to payments to the retired parties, so that the total actual costs to FFI, for all three retirees plus legal costs was a little under $300,000.
The 2003 Budget presented to the Board of Trustees by Chip and the management of FFI showed a surplus of $1,669, after anticipated Contributions received of $311,000. There was therefore a projected deficit of $309, 331 before Contributions. Furthermore, the projected figures assumed an increase in exchange revenues over 2002 of $120,139, Club Membership Fees of $115,000, and a profit on the 2003 Conference of $50,000. Of course if things go well these expectations may be exceeded, and a larger surplus earned leading to a smaller requirement for Contributions to balance the operating budget.
However, if we do not see the projected growth in exchange revenues, Club membership fees and Conference profit, the deficit could be considerably worse, in my professional opinion, leaving us to require Contributions of up to $500,000. The fact of the matter is that we have raised an average of Contributions in the last three years of about $175,000 per annum. Another fact is that these Contributions are needed to fund operating expenses, and that further additional Contributions would be required to raise monies to support new projects and further development of FFI.
I cannot speak for any other parties, as I do not know their personal thoughts, but for me the crux of the matter was therefore whether we try to continue as an organisation that requires large annual donations to effectively stand still in a financial sense, and to have to repeat the fund-raising exercise year after year in order to guarantee survival, or whether to reduce outgoings in a steady and measured way, and match operating expenses with revenues, thereby guaranteeing the future survival of FFI for many years to come. My view of FFI is that we should continue to raise funds through donations, and then utilise those funds for development of new programmes, rather than having to raise funds to survive.
At the meeting of the Board of Trustees in Dallas on Thursday 7th November, one Agenda item related to the election of new Board members. Nominations were made and properly voted on, and Mrs. Charlene Terrell of Big Canoe, Georgia and Ambassador Gordon Streeb of The Carter Centre, Atlanta were re-elected for a further three year term. Mrs. Margo Lindl, Bill Hagan and myself retire at 31st December 2002 and have been replaced by Mr. Bunkichi Itoh of Japan, Mrs Fritzi Logan of Tennessee and Mr. Bill Blaine of Ohio. Mr. Itoh was suggested to the Nominating Board by Chip, as was Ambassador Gordon Streeb when he was initially nominated to fill a Board vacancy approximately a year ago, while Fritzi Logan and Bill Blaine were suggested by the Nominating Board itself.
On Saturday morning in Dallas, two days after the Board meeting, Chip addressed both the Club President’s breakfast and then the Conference in full, advising that he had been in communication with his mother, Mrs. Rosalynn Carter, who had asked him to advise the Conference that she wished to have the Board appointments to be changed, and for two of the newly elected Board members to be replaced by two nominees who she had put forward at Thursday’s Board meeting but who were not elected.
At dinner on Saturday evening (for the avoidance of doubt, Chip and I were seated on the same table and communicating in a very sociable manner) Chip handed me a letter from his mother announcing her resignation, to be presented on Sunday morning.
The Board met at 7.00 a.m. on Sunday 10th November 2002 in Dallas. Chip presented his mother’s request, and I asked him whether the possibility of putting Mrs. Carter’s nominees on the International Advisory Council, with a fund-raising brief, would be acceptable, and he replied that it would not. I then asked him if the possibility of expanding Board membership to accommodate the two nominees could be considered, and he replied that the only acceptable position was to remove the two U.S.A. Board members who had been elected on the previous Thursday and to replace them with Mrs. Carter’s nominees.
A motion was proposed and seconded to remove the two new Board members and replace them with Mrs. Carter’s two nominees, and a vote taken. Of the thirteen votes to be cast, four members voted in favour, six against, and there were two abstentions – the remaining single vote was not cast as the relevant Board member was on vacation in Turkey and could not be contacted. Chip then announced his mother’s and his own resignation, in a very courteous manner.
The Board of Trustees did not want Mrs. Carter and Chip to resign, nor did they ask them to do so. Of the five Board members who were elected at the Dallas Board meeting, two were nominees of the Carter family and the other three were nominated by the Nominating Committee of the Board. Had the Board accepted Mrs. Carter’s proposals, then four of the five new Board members (out of a Board membership of 12 plus the Honorary Chairperson) would have been nominated by the Carter family and one by the Board Nominating Committee. Neither Mrs. Carter nor Chip explained why they thought the proposed changes should be made, nor did they explain why they made the proposed changes to Board membership a resignation issue.
Friendship Force has lived through several interesting times during the last twenty-five years, and no doubt there will be more to come in the future. However, we believe that FFI will be solvent at 31st December 2002, and there is undoubtedly a great and very positive future for the organisation if we move forward rather than looking into the past, and I am sure that there will be some exciting developments to announce in the weeks ahead. In the meantime, I would encourage everyone to focus on next year’s plans and to move forward into 2003 in a positive manner.
The Board has certainly listened to suggestions for improving transparency and communications, and will, I understand, be reporting developments in that field in the New Year. As far as I am aware, the Bye-Laws and audited annual Accounts of FFI have always been available for anyone who asks for them, which very few people have done until the events of the Dallas Conference. I understand that moves are afoot to make the audited accounts available on the web-site at some time in the New Year, and can confirm that the Bye-Laws are available now on the FFI website, “www.friendshipforce.org”, in the “My Friendship Force” section, to be found on the left-hand side under “Friendship Force International Board of Trustees.”
Thank you for taking the time to read this long letter. The Friendship Force has been a great organisation which has achieved so much over the past 25 years. The Carter family have certainly played their part in those achievements, and we all acknowledge their significant input, but now it is time to move on and take the organisation further forward.
At the Dallas Conference we had several good speakers, and most agreed that one of the best was Dr.Luis Martin who spoke at dinner on Saturday evening. I shall close by quoting a part of his speech in Dallas that evening, which I also quoted on Sunday morning in Dallas:
“Nobody is the centre of anything. We all live together in a great world.”
In Friendship,
Tony Coates.
Chairman
Board of Trustees
Friendship Force International
FFI Changes
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