Chapter 18
Chapter
Eighteen
Sawyer welcomed Bill Packman to his office.
They had already met for an entire day, going over various options for the multi-millionaire and how he could make the most of his estate, possibly by establishing a nonprofit organization.
Today, Sawyer was going to talk with the older gentleman about forming a private foundation, which he believed would make the most of Bill’s money and help a wider variety of those in need.
“Good to see you, Bill. Let’s take a seat in the conference room. Want some coffee?”
“No, thanks. I’ll pass. Caffeine and I aren’t getting along these days.”
His client accompanied him to the small conference room, where Sawyer had copies of various documents set out.
“You know my expertise is in criminal law, but I’ve practiced a lot of family law since coming to Hawthorne.
You’ve kept me busy though, ever since we met.
I’ve been researching corporate law. How organizations and business are formed.
How corporations deal with their investors, shareholders and directors.
How everyone interacts with one another.
Yes, I had some law school classes on these topics, but I’ve really hit the ground running, refreshing myself on financial matters and how best to make your money work for you—and keep working—after you’re gone. ”
He paused. “I hope you don’t mind, but I contacted a buddy of mine from law school who’s in the corporate world. With my research and advice from him, what I believe best in your situation is to form not simply a nonprofit organization but a private foundation.”
“Why private?” Bill asked. “I’m wanting to help the public.”
“Nonprofits consist of a cycle of three things. Donor acquisition. Fundraising efforts. And mission-driven work. As the money runs out, the cycle starts over again, continually looping. If we create a private foundation, we can support many other organizations—and individuals—of your choosing. Basically, it’s a private charity which allows you to take community service to a higher level for long after you’re gone. ”
He explained how a foundation was sustained by private donations, securities, and other financial funds and didn’t solicit public donations, although they were allowed to do so if they chose that as an option.
“A private foundation basically grants funds to charitable activities. They don’t directly get involved with the programs or services the grants fund. They allow that organization to handle things since they know their needs better than anyone else.”
Bill nodded thoughtfully. “What about taxes? I know they can eat up things fast. And administrative costs, too. That’s a consideration.”
“A private foundation is exempt from income tax, like any nonprofit would be. It is responsible for up to a two percent excise tax on any income generated by investments, however. Your foundation would need to give a minimum of five percent of the net assets via grants every year to be functioning correctly. More if the board chooses, of course.”
“And you say the grants can be to a charity group or an individual?”
“That’s right. Your board of trustees would vote on who receives the grants, and those can vary in amounts from small to very large.”
Sawyer spent a good hour explaining the legal structure they would set up, including naming the foundation, registering it, and creating articles of incorporation and bylaws which would specify how to name a board of trustees and manage the foundation’s funds.
“I can do all that for you and serve as the attorney for the foundation if that’s your desire.”
“Absolutely,” his client said. “I can’t imagine proceeding without you at the helm, Sawyer.
I know I’ve already put you on retainer and that you’ve billed me for the legal documents you’ve already created for me, but this sounds as if it’ll take a good deal of your time.
I’d like to have a salary set aside for you because of the amount of time you’ll be involved with the foundation. ”
This would be a godsend. While he had saved a portion of his salary while an ADA in Dallas, the savings were slowly eroding.
He paid Isaiah Smith to rent his offices each month.
He took on most every client who came to him, but family law didn’t pay nearly as well as corporate law did and wasn’t steady.
His earnings were hit and miss. Having a guaranteed income and all the work the foundation would bring meant he could save more. Buy a house.
Make a life with Paisley.
“I won’t get into the particulars with you now, Bill, but I’m assuming you’ll want a big chunk of your investments liquidated and placed into an endowment.
Basically, the principal would remain untouched, and we’d invest in various assets.
The earned income from investments is what we would use for the grants we issue.
We’d also pay a salary to any employees hired by the foundation.
At the beginning, I can handle everything.
Eventually, though, you’ll need someone to manage some of the day-to-day operations.
Review grant requests. Meet with prospective clients.
Make presentations to the board. That kind of thing. ”
“Let’s talk about that board of trustees,” his client said.
“They’ll guarantee the foundation is operating correctly based upon its mission statement. They’ll vote on the various grants. They act not only as stewards but ambassadors for the foundation.”
He paused. “Does this sound like how you’d like to have your money working, both now and in future decades to come?”
“I’ve always trusted my gut from my wildcatting days. It’s telling me now that this is the right thing to do. That I could make a big difference with the money I’ve accumulated by having you draw up the necessary documents to create this foundation.”
“The advantage of doing so would be that you could help the town of Hawthorne and still go far beyond that. You might want to pick three to five causes which interest you and concentrate on helping those in need through a variety of organizations. Or you let the board be the guiding influence on the groups and individuals you invest in.”
“Let’s talk more about that board,” Bill said.
“It’s important to me to keep it local. I don’t want it to be the kind of thing where bigwigs from all around the country fly in for a board meeting.
I want locals who will truly be invested in it.
First of all, because it’ll make Hawthorne a better community, but I also want likeminded people who are average Joes and want to simply do good with the mad money I’m providing.
Do you have any suggestions on who we could approach? ”
“Since I’ll be acting as the organization’s attorney, I wouldn’t feel right about taking up a slot on the board.
The first person who comes to mind, though, is my uncle Joe.
He’s Dr. Joe Sutherland, superintendent of Hawthorne ISD.
He’s lived in Hawthorne his entire life and dedicated himself to public service the last forty years.
More importantly, Uncle Joe has told a handful of people that he’ll be retiring at the end of this school year.
In my mind, he’s still young and has many years left ahead of him.
He’s already talked to me about ways he could act as a servant leader in this second chapter of his life.
He would be ideal to serve on the board, maybe as its president. ”
“I like that idea, Sawyer. I’ve never met your uncle, but I read about things in the newspaper, and I’ve talked to people who’ve worked with him. I think Joe Sutherland would be a brilliant choice to head our foundation’s board. Any other suggestions for board member?”
“My cousin Autumn is married to Dr. Eli Carson. Eli came from nothing and has made himself into someone really special. He came through the foster care system and is a medical doctor as well as an administrator. He currently serves as the medical director at Triple H, which has become a vital part of the Hawthorne community in a short amount of time. I think Eli is a solid choice.”
Bill wrote down the two names Sawyer had suggested and then looked up. “Anyone else you can suggest?”
“It would be good to involve someone from the community with a different perspective. There are still a lot of farmers and ranchers in the area. My cousin Summer is married to Chance Blackstone, owner of the Blackstone Ranch. Chance would not only bring a rancher’s experience to the table, but he’s also a businessman since the Blackstone is the largest ranch in the county.
He’s quiet. Reflective. But when Chance does speak, others listen because he has something important to say. ”
Once more, Bill scribbled the name next to the others. “That’s three men. I would like a female perspective. Can you think of anyone who would be qualified?”
“The woman who has her finger on the pulse of the community is Marge Bliss. Shorty handles all the food prep at BBQ Bliss, from smokers to grills. Marge is the brains. Handles all the bookkeeping and menus. She’s on practically every committee in the community, from Parks and Rec to president of the women’s club at her church. Marge is likeable and has great ideas.”
“Sold,” his client said, adding Marge’s name to their growing list. “One more woman.”
Sawyer thought. “I think Mischa Sabbatino would be good.”
Bill frowned. “The gal from Pizza Palace?”
“Yes. She and Mario came here probably twenty years ago or so from Brooklyn. Mischa is friendly. She doesn’t put up with nonsense. And it might be nice to have the perspective of someone who has come to Hawthorne and made themselves a part of the community.”
“I’ll put her down.”
“That would make for five board members, Bill. I wouldn’t go much larger than that. At least in the beginning. I’m sure you’ll want a seat on the board as well.”
His client shook his head. “No, I need to step away.”