2000 OAH Financial Reports

• Receipts
• Disbursements
• Assets and Liabilities
• Investments

Report of the OAH Treasurer

Gale E. Peterson

The OAH Endowment Fund
Shortly after succeeding Collum Davis as the OAH Treasurer several years ago, I consulted with him and with Bill Aeschbacher, with whom so much of the OAH's institutional history resided, to ascertain the nature of the OAH's investment account. I no longer recall which of them described it as having been established as a sort of "rainy day" fund. Years ago, those in the association's leadership hoped to protect the solvency of the Mississippi Valley Historical Association should it suddenly lose its institutional home or experience some similarly catastrophic event. Small operating surpluses, life membership purchases, and some directed gifts were deposited in the fund and left to grow. Reflective of its origins, the account has always been managed by a bank in Lincoln, Nebraska, the MVHA's hometown for many years.

While the absence of restrictions on money deposited in the "rainy day fund" make the designation "endowment fund" something of a misnomer, that is how everyone gradually came to think of it. During my immediate predecessor's tenure, operating surpluses were deposited in the fund, and all earnings were reinvested. In addition, a special fund-raising initiative was launched to support new initiatives by the OAH, resulting in the Fund for American History.

Over the past decade, declining institutional memberships and slow (and frequently no) growth in individual memberships, combined with broader expectations of services from an association whose members no longer exclusively held academic positions, produced difficult budgeting challenges. The Executive Board increased individual and institutional memberships, journal advertising and annual meeting booth rental fees in a continuing search for ways to expand revenue from a largely static population. Among the policies adopted, beginning in 1993, the OAH began to transfer about five or six percent of the endowment fund's market value into operations each year.

To cover the deficit in one particularly bad year (1994) when the annual meeting underproduced and a round of membership rate increases had not yet generated additional funding, the board borrowed $75,000 from the Endowment Fund. It was never able to repay the loan, and decided last year to write it off. Over the past three or four years, the endowment fund has ranged in value between $900,000 and $1,000,000.

Taken as a whole, the OAH's membership should feel well served by how conscientiously a succession of elected governing boards have worked to balance the needs of the profession with the resources of the association. The OAH's administrative and journal staff members have worked equally as hard to do the most they could for the profession with the resources available to them. To a remarkable degree, during the past decade, the OAH has succeeded in broadening its services.

And then it rained. Last spring, when controversy developed about charges of racial discrimination by the Adam's Mark hotel chain, through many conference calls and e-mail messages, the Executive Board sought to balance their values and beliefs with their fiduciary responsibilities as trustees of the association. The full financial impact of the board's decision to move the annual meeting away from the hotel are not yet known. To date, however, it has been quite modest.

The expenses associated with moving the conference to Saint Louis University, including shuttle buses, hotel rooms for staff members (that otherwise would have been largely complementary), set-up costs in the new venue, and legal fees have amounted to about $100,000. This amount, again in round numbers, has been offset by $60,000 in outright contributions from members, $30,000 in new life and patron memberships purchased in response to the OAH's special appeal, and a loan from the endowment fund of $15,000. While the life memberships normally would have gone into the endowment fund, and the loan is an obligation to be repaid, the membership has been generous in its support of the Executive Board's decision. There remains one important uncertainty, and that is the eventual disposition of a lawsuit filed by the Adam's Mark suing the OAH for $100,730. Both the eventual settlement and the legal fees in reaching it, whether through negotiations or a trial, cannot yet be calculated.

While the Adam's Mark issue may not have been the type of rainy day the MVHA's leaders had in mind when they began to set aside funds, all of the association's members can more fully appreciate the importance of having an endowment fund today. Would the OAH have taken the principled stand that it adopted last spring if the fund did not exist? Even the worst potential outcome from the unresolved suit will not be catastrophic for the organization.

While it is my own view that the costs of the Adam's Mark crisis must be borne to the fullest extent possible by the association's members and not paid for by cashing in the Endowment Fund, there is no doubt the assets of the fund can tapped for this purpose. The greater issue, however, is the need for the OAH to increase the Endowment Fund very substantially. At present, the five- to six-percent transfer into operations covers only three percent of the budget.

Everyone on the Executive Board is deeply appreciative of the generosity of so many OAH members to the immediate need last spring. We may need to ask for your help again as the legal process unfolds. Taking a longer view, as the OAH approaches its centennial in 2007, as members we must make a concerted effort to expand the organization's endowment fund. We need to do this to increase the OAH's capacity to provide services to our profession. And, we need to do it to protect the organization against the unexpected. As we learned this past year, we cannot be sure when we will experience a rainy day.

Finally, on a personal note, I want to join the chorus of others singing praises of Jeanette Chafin. In the mid-1970's when I worked on the United States Newspaper Project at the OAH, I had the pleasure of getting to know Jeanette and working with her. Her work ethic was of the "old school" tradition, and her dedication to the OAH was contagious in the office. One of the pleasures of coming back as Treasurer these past several years has been the opportunity it has provided to renew and deepen the friendship with one of the finest people I have ever worked with. And, if Jeanette and Vernal ever invite you over for Sunday dinner, be sure to go--and take a healthy appetite with you. She is, simply, the best. Thank you, Jeanette, for many things.