GEORGIA SOUTHERN UNIVERSITY FOUNDATION, INC.

Minutes of the Meeting of the Board of Trustees

May 16, 2009

The Board of Trustees of Georgia Southern University Foundation, Inc. met at 10:30 AM at Nessmith Lane Room #2911 on the Georgia Southern University campus. Trustees present were: Wayne Akins, Troy Athon, Patrick Blanchard, Tommy Bond, Derrick Brown, Charles Chandler, Michael Curry, Tommy David, Margot Dawkins, Julius Edel, Jimmy Franklin, Jenny Gentry, Billy Griffis, Bruce Grube, Tracy Ham, Caroline Harless, Bill Hatcher, Don Howard, Mike Kennedy, Joe McGlamery, Rod Meadows, Ricky Nessmith, Mike Skinner, Connell Stafford, Jr. and Ric Tomlinson. Trustees not present were: Gene Bishop, Barbara Christmas, Terry Coleman, Greg Colson, Ron Core, Pat Douglas, Lee Fulcher, Lamar Hennon, Billy Hickman, Jimmy Hodges, Kara Martin, Harry Mathews, Phil Moore, Martin NeSmith, Pat O’Connor, and Ann Purcell. Others present were: Dr. Jean Bartels, Russell Keen, Jodi Collins, Michelle Pittman, Carole Smith, Marshall Raucci, Melanie Mosley and Samantha Nesmith.

Welcome and Opening Remarks: Mr. Stafford welcomed everyone to the Spring Board Meeting of the Georgia Southern University Foundation. Mr. Stafford thanked Mr. Griffis for the reception event that was hosted at his home on Friday evening.

Approval of the Board Minutes: Mr. Stafford referred Trustees to the minutes of the winter meeting and asked for any revisions or corrections. With none given, a motion was made by Mr. Rod Meadows that the minutes be accepted as presented. This motion was seconded by Mr. Troy Athon, and it passed unanimously.

Presidential Search Update: Foundation Board Member Caroline Harless gave an update from the Presidential Search Committee. After reviewing the list of committee members, Mrs. Harless discussed the goals of the committee as they continue the search for the next president of Georgia Southern University. She then introduced Dr. Jean Bartels, Department Head for the School of Nursing, who informed the Board of qualifications required for the presidential position. Mrs. Harless asked that all the board members get involved in the search by looking for prospective candidates that would be suitable for Georgia Southern University. A timeline was released and reviewed with anticipation that a new president will be hired by the end of 2009. After responding to questions from the Board, the presidential search report was concluded.

Membership Committee Report: Mr. Jimmy Franklin presented his report on behalf of the Membership Committee. There are six current members whose terms expire in 2009 that were recommended to remain on the board for another five year term: Pat Douglas, Mike Kennedy, Rod Meadows, Marshal Mize, Ricky Nessmith and Connell Stafford. In addition, the following member will be retiring from the Foundation Board effective October 2009: Ann Purcell. One new nominee was recommended to serve on the Foundation Board; Tim Evans, founder of Evans General Contractors, LLC. On behalf of the Membership Committee, Mr. Franklin made a motion that these recommendations be accepted. Mr. Pat Blanchard seconded the motion and it passed unanimously. Next, Mr. Franklin made a motion to elect Dr. Barbara Christmas as the incoming Vice Chair. Mrs. Margot Dawkins seconded the motion and it passed unanimously. In concluding his report, Mr. Franklin made a motion to confirm the officers for the 2009-2011 term; Mr. Max Manack, Chair; Mr. Tommy Bond, Chair-elect; Mr. Billy Griffis, President; and Dr. Ron Core, Secretary/ Treasurer. Mr. Rod Meadows seconded the motion and it passed unanimously.

Investment Committee Report: Mr. Tommy Bond gave an overview of the investment report and introduced Mr. Marshall Raucci from Prime, Buchholz and Associates. Mr. Raucci reviewed the Executive Summary ending April 30, 2009 for the Georgia Southern University Foundation.

Development Committee Report for Corporate/Foundations: Committee member Mr. Wayne Akins gave the report in the absence of Committee Chair, Dr. Barbara Christmas. During the committee meeting, Carole Smith covered three key points that the members are to evaluate. They were asked to focus their attention more on prospects in the Savannah and Jacksonville areas and reach alumni that work in large corporations within these areas. Also, the committee reviewed the needs of Georgia Southern University and how they may be specifically related to corporations and foundations that may be willing to give. Lastly, there are many firms that are successful during economic downturns, and those firms may be excellent prospects to research and make a connection with. Mr. Akins reiterated the importance of receiving gifts, especially when the market is down. With no questions from the Board, Mr. Akins concluded his report.

Development Committee Report for Major Gifts/Planned Giving: Mr. Marshal Mize began his report stressing that the key to the short term is giving and contributions are essential to the success of the Foundation supporting the University's academic and outreach programs. Now more than ever the development committee, along with the Board, needs to help the Foundation to achieve their fundraising efforts by identifying potential prospects. With ideas presented by Michelle Pittman, members of the committee have been requested to do just that: identify potential prospects, explore new ways of approaching prospects, look for new networking opportunities and serve as ambassadors for the University.

External/ Governmental Relations Report: Committee member Mr. Ric Tomlinson gave the report in the absence of committee chair, Mr. Greg Colson. Mr. Tomlinson reported that Georgia Southern University has a tremendous amount of support from the local delegation including Senator Jack Hill, Representative Bob Lane, and many others on both the state and federal levels.

He discussed the four major projects that will be of great interest to Georgia Southern on the federal level: 1) renewable energy, 2) public health issues, 3) rural nursing, 4) water policies. Mr. Tomlinson also mentioned that Congressman Barrow made a visit to the campus and his office also recently hired two Georgia Southern students for internships. During the next State session, the University will seek approval of a bond program for $32.5 million for the construction of the Biology Building. Through the encouragement of Russell Keen, all board members have been asked to look into the online advocacy program and enter any relationships that members may have with state and federal legislators (this information will be confidential). This will prove helpful when working to build relationships in the Capitol in order to benefit Georgia Southern University. The web site is: www.ciclt.net\gasouthern. Mr. Tomlinson also mentioned regular email updates for the committee as well as regular committee conference calls to keep everyone current on the issues at hand. With no questions, the report was concluded.

Foundation President’s Update: Foundation President, Mr. Billy Griffis thanked everyone for attending the Spring meeting and for participating in the committee meetings.

Mr. Griffis began reviewing the financial statements through April 30, 2009. During the Board of Regents’ March meeting, the BOR approved the University’s purchase (from the Foundation) of three properties; Apex, the Bowling Alley, and Legends. The closing on these properties should take place before the fiscal year end and these funds will be used to pay off the loan on the Legend’s property as well as provide extra cash flow for the Foundation.

Under the Statement of Revenues and Disbursements, contributions total $3.3 million and with outstanding pledges, the Foundation hopes to have $3.5 million by June 30.

Under Unrestricted Budget Income, several outstanding contributions are expected to be received by June 30. A Day for Southern and Phonathon pledge reminders will be sent out soon in order to encourage fulfillment of these commitments. Income from investments is down (due to the downturn in the market) which was previously discussed. Also, the last quarterly payment of $25,000 under Royalties (from MBNA) will be received before June 30 as well. With no other questions from the board, Mr. Rod Meadows made the motion to approve the financials. Mr. Marshal Mize seconded the motion and it passed unanimously.

Next, Mr. Griffis discussed the effects that the market has had on realized and unrealized losses. The fiscal year 2010 budget for these areas was finalized in the fall of 2008. Many commitments for scholarships were made in the fall of 2008 for the upcoming fall semester in fiscal year 2010. The way the Foundation calculates funding is based on a 5% spending policy that is applied to a 3-year rolling average of the value of the various endowments. There is a one year lag, so this year’s number does not enter into the average until fiscal year 2011. After reviewing these accounts, there is enough funding in all of the endowments to cover the commitments for fiscal year 2010. The fiscal year 2011 budget that will be presented to the Board for approval in the fall will require a great deal of time and review from the Finance Committee this summer. After review, it is anticipated that there will be at least $300,000 reduction in funding available for scholarships, faculty stipends, eminent chairs and others. The 5% spending rate that is used is a little high when compared to the NACUBO national average of 4.6%. The issue of lowering the rate for the Foundation is another item that the Finance Committee will have to look at this summer.

Georgia Southern has almost 80% of its endowments that are currently “underwater”. This means that current market value of these endowments is worth less than the donor’s original gift, or donor principle. About half of the states across the country have a law that prohibits spending out of any endowment if the market value is less than the original donor principle, regardless if there is a reserve. This is having a drastic impact on many institutions. Fortunately Georgia and many other states, does allow institutions to spend out of underwater endowments if there are earnings/reserves that can be used, but these come with certain regulations.

There have been changes to the annual Wild Game Supper event hosted in Atlanta. The event location, The Railroad Depot, is now under private management and has made several policy changes over the last three years. Due to these changes, the cost has nearly doubled for the event. The University covers 50% of the total cost while the other 50% is split three ways among the City of Statesboro, Bulloch County, and the Chamber of Commerce. Officials from these areas, along with Dawn Cartee from Ogeechee Technical College, met to discuss the future of this event. It was decided that the Wild Game Supper should occur every other year. There will be no Wild Game Supper in 2010, and the next one is scheduled for 2011. Newly elected officials, taking office in January of 2011, will have the opportunity to attend the Wild Game Supper and learn more about Georgia Southern University and the Statesboro/ Bulloch County community. The Foundation will continue to have the yearly winter board meeting in Atlanta, keeping with the legislative theme and political guest speaker. The date and location will be released at a later time. With no other questions from the board, Mr. Griffis concluded his report.

University Update from the President: Dr. Grube began by thanking everyone for attending the spring board meeting. He announced that Provost Dr. Linda Bleicken has been appointed President of Armstrong Atlantic State University in Savannah, Georgia. He expressed his appreciation for the excellent work she has done for Georgia Southern University during her many years on campus. Dr. Gary Means will serve as the interim Provost.

Another newcomer to the University (thanks to assistance from Mr. Michael Curry) is Basketball Head Coach, Mr. Charlton Young. Mr. Young has brought a new attitude to the basketball organization and the upcoming season is already promising to be full of energy and excitement. Continuing with athletics, the baseball team has done a tremendous job this season and hopefully will head into the SoCon Tournament as the number 2 seed.

As for the construction occurring on campus, Centennial Place will be complete and open for occupancy by fall semester. There will be retail stores at Centennial Place, including Cold Stone Creamery, Einstein Bagel and others. Dr. Grube also reviewed plans to move the old Nursing Buildings to the wedge property as offices for Physical Plant.

Enrollment for the summer is over 10,000, a record for the summer semester. This not only helps the University, but also helps many retail stores in the Statesboro/ Bulloch County community. In addition, it is projected that the University will have over 18,000 students on campus this fall.

President Grube spoke about the severity of the budget cuts. The University experienced a 10% + cut in the budget for fiscal year 2009, but he reiterated that employees would not be laid off in order to cover the loss. Layoffs in a community such as Statesboro would cause a domino effect throughout the area. Dr. Grube shared that since the University is a large institution, cost shifting can be done and as a result of job turnover (from retirements and transfers), current jobs can be preserved. There is a possibility that the fiscal year 2010 budget will include more cuts as well, but the University is prepared and has a reserve set aside for that potential reduction. Dr. Grube expressed his deep appreciation for all the Trustee’s support, time, energy and focus on everything that has been occurring at the University. In addition, he thanked everyone for their contributions to the Foundation and Georgia Southern University. After answering a few questions from the Trustees, Dr. Grube’s report was complete.

Committee List: Mr. Stafford encouraged everyone to review the Committee assignments. With no further business, the meeting was adjourned.

* All meetings of the Foundation Board are recorded. The proceeding represents a synopsis of the proceedings. Any Trustee who wishes may come to the Advancement office and listen to the complete recording of any meeting.