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Jim Key: Now welcome back
our financial adviser.

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There he is down there.

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Come on up.

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The lawyer's is going
to come back and give

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the financial advisers report.

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And unless I miss
a bet, there'll

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be a history lesson
embedded in it somewhere.

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You've got to move faster.

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I'm just saying.

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Larry Ladd: As a
committed White Ally,

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it's an honor to follow the
Journey Toward Wholeness

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Committee's report.

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I have a clicker here,
which is generally not

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consistent with the way
General Assemblies are run,

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so I'm waiting for
the slide to move.

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There we go.

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The topics this
afternoon-- and I

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believe I am the last
substantive item before you can

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go off and eat and enjoy
workshops and so forth-- is

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the role of the
financial advisor,

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for those of you
who may not know.

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Describe a few activities.

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Describe some financial results.

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For those of you who
wondered, why isn't he

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wearing a bow tie this year,
some of the financial results

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are not good, so I picked a
conservative rep tie instead.

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I'm going to talk about growth,
and finally, about generosity.

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So the role of the
financial advisor,

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for those of you who do not
know-- and I know many of you

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are here at a General Assembly
for the first time-- the role

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is to provide the president,
the board of trustees,

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and the General Assembly with
an independent and expert

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evaluation of financial
issues and fiscal health,

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and to make
recommendations for how

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to make the financial
condition better.

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It's one of the three
officers of the association,

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and it is elected by
the General Assembly.

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And I served on the
board of trustees.

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And you saw there-- let's see
if we can make it go back.

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You saw there a picture of
the four white males who

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have served in that role at
least since the mid 1980s.

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And yes, I have noticed,
it's four white males.

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That's some diversity
we are working to fix.

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This is probably the
best narrative summary

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of what the role has been
conceived of historically.

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And this is from a
long-time minister

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of the University Unitarian
Church in Seattle.

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He wrote this to
me in the process

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of deciding whether I was worthy
to be the financial advisor

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back in 1996.

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This was his advice to me.

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"Those of us who serve
volunteer organizations,

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even if we have
fiscal awareness,

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cannot reach to the
heart of finances.

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The treasurer usually
represents management.

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What we need is a person who
strives mightily, not always

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successfully, to give us an
independent and critical view,

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the best assurance available
that we are being responsible.

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The financial advisor must
take that role as central."

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Now, Peter taught many of
the ministers in his room.

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He also taught me.

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Your board of
trustees, in addition

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to working with the
president to cast

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a vision for the
association, also

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has a legal responsibility.

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And one of my roles
is to help them

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do the best job they
can in that regard,

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and particularly with the
legal responsibility that's

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called the duty of care, which
is, we did the best we could.

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We took all responsible steps.

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It doesn't necessarily mean
the outcome is always perfect,

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but we did what we
believed we needed to do.

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So the financial advisor
serves on a few committees.

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This is less than when
I served in the '90s

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as financial advisor, but
it's a lot of committees.

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You can read my
written report if you

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want to know more
about those committees.

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And there are a lot of assets
that are within the UUA orbit.

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And again, I'm not going
to go through these.

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You can read about
them in the report,

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but I want to just give
a sense that there's

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more than just the budget,
and actually more than just

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the endowment.

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There are a variety of
assets that we oversee.

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So this is a set of standards
for financial performance

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that are also in
the written report,

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so I will not
describe them to you,

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but they do become
particularly relevant because

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of the not-so-good news that I
will include among the results.

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So this is my ninth report
to the General Assembly

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as the financial
advisor, but there

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were nine years between
the eighth and the ninth.

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I'm an unexpected
financial advisor.

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And I think it's important
to remind myself, and perhaps

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you, of the parting advice that
I gave to the General Assembly

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in 2005 that is timeless.

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It's just as relevant
now as it was then.

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The first two bullets you
see up there is to not get

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too caught up in
ourselves, to not

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focus so much on governance,
on wording, on budgets,

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that we forget the core mission
of what the institution is all

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about.

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To the extent that we look
inward rather than outward,

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we are not serving
our faith well.

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The third, which
again will relate

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to the bad news I bring
you, is respect roles

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and responsibilities.

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The fourth, be
worthy of our youth.

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You are looking
at someone who was

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in the first youth
caucus in 1969.

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The board of trustees
consists of 14 individuals, 11

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at large and three officers.

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Two of those individuals were
in that first youth caucus.

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Me and Reverend Robert
Eller-Isaacs down here.

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So, youth caucus,
when you look at me,

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I hope you do not
say, oh my god,

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this is what we will become.

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I hope that you will
become better than that

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but stayed connected
to the faith.

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So lastly-- I sometimes
give talks on this topic.

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Everything I know about
money I learned in the UUA

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in the late 1960s.

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Everything important that
I learned, I learned then.

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Because all the issues around
the alignment of assets

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and our values together
played out during that time.

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So there are some
activities I've

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engaged in that I'll
actually now skip

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that in the interest of time.

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I know the moderator
is keeping track.

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So those, again, are
in my written report.

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So the financial results.

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We're going to start with
the overwhelming good news.

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We'll get to the bad news.

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But the overwhelming
good news that

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hopefully will dwarf but
not ignore the bad news.

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First, our endowment
performance remains strong.

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That means that the endowment
performance not only supports

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the UUA and its activities, but
half of the common endowment

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fund, our endowment
assets our congregations

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have entrusted to
the UUA to provide

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professional management.

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So it's particularly important
that the endowment performance

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be good.

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Second, we received a
clean opinion on our audit.

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That's never an applause line.

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All right.

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Let's hear it for the audit.

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And for the first
time in at least

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my knowledge, the budget for
the new fiscal year actually--

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there is a written
narrative that

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describes how that budget
helps us achieve the ends

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and strategies of
the association.

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That is an accomplishment.

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And lastly, there is in the
works a capital campaign.

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I am an advocate of perpetual
capital campaigns, in which you

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just relabel them,
and go on and on.

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Not because the UUA doesn't
have enough assets--

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although it could use
more-- but because we

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all should be giving
more to our faith.

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That's why we should be giving.

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And I'm going to actually
talk more about that later on.

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So this is a little more detail
on the endowment performance.

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The most important way to
measure endowment performance

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is not indices of
how the DOW has done

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or the Standard & Poor's
500 or any of those,

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but how other
endowments have done

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that have had to deal with
all the complexities of issues

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that we have to deal with when
we're managing our endowment.

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And so if you look at
the other endowments

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of the same approximate
size as ours,

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we are in the top
quartile of performance,

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and have been consistently that
way for 5, 7, and 10 years.

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So that is very good.

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And if your congregation
has an endowment

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or your other UUA organization
has an endowment that is not

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entrusted to the
UUA for management,

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you still control
how it is spent,

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you should seriously
consider the kind

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of professional management
embedded with UU values

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that the common endowment
fund represents.

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So the budget results.

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Now, we're going to
get to the reason

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why I'm wearing the
conservative rep tie.

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The budget of the UUA
last year and this year

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relied on the receipt of a
small number of very large gifts

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in order to support operations,
in order to produce a balance.

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And those gifts did
not materialize.

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They may at some
point materialize,

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but they did not
materialize when

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they were needed to
balance the budget.

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So there were three
principles that I hold dear

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as a financial
person that were not

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followed as a result of that.

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First, the board and
the administration,

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particularly the
administration, was not

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staying on top of the
revenue situation.

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I advise boards when
they're approving budgets,

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the expenses are usually
well under control,

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because they're mostly people.

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You can decide to
hire or not hire.

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You're usually in a budget don't
have a problem on the expense

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side with results.

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What you do, though,
have is a problem

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on the revenue side if
the annual fund doesn't

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come through or something else.

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In both of those years, all
the other revenue sources

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came through except
for a few large gifts.

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So you were doing your part.

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The congregations
were doing their part.

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And I trust and hope you will
continue to do your part.

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But a few gifts that were
expected to come did not come.

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And lastly, the president was
not on top of fundraising.

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I was quoted in the UU
World web version on that.

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The president is the chief
fundraiser of the association,

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and he knows.

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He should not have
been surprised.

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The exact words he used with the
board when reporting this was,

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I was surprised and I
should not have been.

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So when we get back to roles
and accountabilities, remember,

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I talked about that as one
of those important lessons.

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The board and the
president know their roles

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and accountabilities.

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He has accepted responsibility.

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The board itself accepted
its particular part

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of the responsibility.

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And there are processes
in place to-- I can't say,

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make sure it never
happens again,

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because this is a human
organization-- but to reduce

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the likelihood that something
like that will happen again.

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So mistakes and
surprises happen.

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If you want to be part of
a perfect organization,

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keep looking.

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Keep looking.

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They will happen.

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I have over 40
years of experience

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as a senior executive of
large not for profits,

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a trustee of large
not for profits.

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I have seen lots of problems.

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This isn't a big
one in relationship

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to all those others.

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It's important.

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We can't ignore it.

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We can't steal it as trivial.

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We have to take a
very, very seriously.

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But do not read more
into it than it is.

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And the board and
administration are

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committed to establishing
good practice.

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And I picked the word
practice intentionally,

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00:15:38,190 --> 00:15:40,760
because often people
think, oh, now we

251
00:15:40,760 --> 00:15:44,360
have to create 20 new policies
to make sure something will not

252
00:15:44,360 --> 00:15:45,380
happen again.

253
00:15:45,380 --> 00:15:47,840
This was not a
problem of policy.

254
00:15:47,840 --> 00:15:54,380
This was a problem of practice,
of people making decisions

255
00:15:54,380 --> 00:15:58,850
that in retrospect were
not as wise as they

256
00:15:58,850 --> 00:16:00,250
needed to have been.

257
00:16:00,250 --> 00:16:03,640
So revenue needs to be
predicted conservatively.

258
00:16:03,640 --> 00:16:08,920
We need an operating budget that
does not rely on large gifts

259
00:16:08,920 --> 00:16:10,170
to support it.

260
00:16:10,170 --> 00:16:12,920
And we need to address
the systemic issues

261
00:16:12,920 --> 00:16:15,310
of the actual
reporting processes

262
00:16:15,310 --> 00:16:18,210
for why this was a surprise.

263
00:16:18,210 --> 00:16:22,480
The board and the administration
are committed to doing that.

264
00:16:22,480 --> 00:16:27,460
So while you need to be
aware of it, alert to it,

265
00:16:27,460 --> 00:16:29,500
you do not need to fix it.

266
00:16:29,500 --> 00:16:34,770
And I say this
because I know you.

267
00:16:34,770 --> 00:16:37,410
I love you.

268
00:16:37,410 --> 00:16:41,840
I said the same
thing to the board.

269
00:16:41,840 --> 00:16:43,810
In protecting their
own role, they

270
00:16:43,810 --> 00:16:46,620
have to be careful that they
don't get inside management

271
00:16:46,620 --> 00:16:47,750
and try to fix it.

272
00:16:47,750 --> 00:16:50,720
Because management
can fix it, and that's

273
00:16:50,720 --> 00:16:56,020
the right place
for it to be fixed.

274
00:16:56,020 --> 00:17:01,150
So now I'm going to
talk about growth.

275
00:17:01,150 --> 00:17:05,790
If you look at the
numbers of adult members--

276
00:17:05,790 --> 00:17:09,349
and I know these numbers,
the adult membership

277
00:17:09,349 --> 00:17:11,910
and religious education
enrollment numbers

278
00:17:11,910 --> 00:17:14,470
are not great numbers.

279
00:17:14,470 --> 00:17:18,430
And I mean that in the sense of
the quality of those numbers.

280
00:17:18,430 --> 00:17:21,550
They're just the best we have.

281
00:17:21,550 --> 00:17:25,500
We just have to be aware of
the flaws in those numbers,

282
00:17:25,500 --> 00:17:28,780
and particularly aware that
sometimes a congregation's

283
00:17:28,780 --> 00:17:32,860
numbers go up and sometimes a
congregation's numbers go down.

284
00:17:32,860 --> 00:17:37,810
But in general, over time,
these are an indicator.

285
00:17:37,810 --> 00:17:41,750
So I don't look at
one year's blip.

286
00:17:41,750 --> 00:17:42,880
I look at trends.

287
00:17:42,880 --> 00:17:46,660
And when you see trends,
you start to say,

288
00:17:46,660 --> 00:17:48,440
we have to pay attention
to this and see

289
00:17:48,440 --> 00:17:50,380
if there are some issue here.

290
00:17:50,380 --> 00:17:53,970
So if you look at
our adult membership,

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00:17:53,970 --> 00:17:58,520
it has declined slightly each
year, not by large amounts,

292
00:17:58,520 --> 00:18:02,230
but it has declined
slightly for five years.

293
00:18:02,230 --> 00:18:05,100
More significantly, I
think, RE enrollments

294
00:18:05,100 --> 00:18:12,650
have been declining a bit more
than slightly for seven years.

295
00:18:12,650 --> 00:18:16,820
But the total numbers
are deceptive,

296
00:18:16,820 --> 00:18:21,450
because they hide
large swaths of growth

297
00:18:21,450 --> 00:18:22,820
within our association.

298
00:18:22,820 --> 00:18:26,260
You have to look beneath the
numbers, behind the curtain,

299
00:18:26,260 --> 00:18:28,020
to see the full story.

300
00:18:28,020 --> 00:18:30,630
And I'm going to talk
briefly about that.

301
00:18:30,630 --> 00:18:36,340
This is a historical
artifact that I love.

302
00:18:36,340 --> 00:18:38,450
Ladies and gentlemen,
this is the first effort

303
00:18:38,450 --> 00:18:44,695
the UUA made in 1997
at performance metrics,

304
00:18:44,695 --> 00:18:47,960
at measuring how we're doing.

305
00:18:47,960 --> 00:18:55,270
This graph shows our adult
membership and RE enrollments

306
00:18:55,270 --> 00:18:58,170
since the consolidation in 1961.

307
00:18:58,170 --> 00:19:02,320
Now, like the
quality of all data,

308
00:19:02,320 --> 00:19:04,830
you only look at
some of the trends

309
00:19:04,830 --> 00:19:07,450
and make interpretations
out of it.

310
00:19:07,450 --> 00:19:11,170
You'll see high
numbers in the '60s.

311
00:19:11,170 --> 00:19:15,160
The numbers were higher in
the '60s than they are now,

312
00:19:15,160 --> 00:19:18,490
but the '60s were
before fair share,

313
00:19:18,490 --> 00:19:21,870
and the minister just filled out
a number and sent it in to 25

314
00:19:21,870 --> 00:19:25,270
Beacon Street.

315
00:19:25,270 --> 00:19:26,630
So it was higher.

316
00:19:26,630 --> 00:19:29,350
There's no doubt about that.

317
00:19:29,350 --> 00:19:32,220
But how much higher,
we really don't know.

318
00:19:32,220 --> 00:19:34,040
There was no fair
share, so there

319
00:19:34,040 --> 00:19:37,620
was no consequence to
what the number was.

320
00:19:37,620 --> 00:19:39,440
But they were higher.

321
00:19:39,440 --> 00:19:43,840
And then in 1969 and '70,
they started to decline.

322
00:19:43,840 --> 00:19:47,070
That's probably a real
decline you see there.

323
00:19:47,070 --> 00:19:50,120
From too high a
perch-- that perch

324
00:19:50,120 --> 00:19:53,220
that is too high--
probably it would

325
00:19:53,220 --> 00:19:55,770
be significantly
below that, but high.

326
00:19:55,770 --> 00:19:59,110
And then miraculously,
and for reasons

327
00:19:59,110 --> 00:20:01,110
no one understands,
although everyone

328
00:20:01,110 --> 00:20:03,700
can pick their
favorite issue and say

329
00:20:03,700 --> 00:20:11,720
that's why, in 1982
the decline stopped.

330
00:20:11,720 --> 00:20:14,830
And until five years
ago, basically we

331
00:20:14,830 --> 00:20:19,430
were growing a half a
percent or a percent a year,

332
00:20:19,430 --> 00:20:22,830
slow, gradual growing
at the same time

333
00:20:22,830 --> 00:20:25,320
that liberal Protestant
denominations continued

334
00:20:25,320 --> 00:20:28,480
to plummet in their membership.

335
00:20:28,480 --> 00:20:31,120
So we were doing well--
nowhere near as well

336
00:20:31,120 --> 00:20:33,520
as we should be doing,
could be doing--

337
00:20:33,520 --> 00:20:37,700
but we've been doing
pretty well in light

338
00:20:37,700 --> 00:20:40,160
of how those others are doing.

339
00:20:40,160 --> 00:20:44,650
It's not good news, because we
should be doing so much better.

340
00:20:44,650 --> 00:20:47,420
This graph, which you
can read in my report,

341
00:20:47,420 --> 00:20:51,080
shows that three regions
of the country are growing

342
00:20:51,080 --> 00:20:52,750
and the others are not.

343
00:20:52,750 --> 00:20:54,490
So this is an
example-- there are

344
00:20:54,490 --> 00:20:59,040
other examples in the report--
of how there is growth

345
00:20:59,040 --> 00:21:07,210
and there is not growth
spread around the country.

346
00:21:07,210 --> 00:21:11,217
And this is a demonstration
that about half--

347
00:21:11,217 --> 00:21:13,050
if you look at that
little red arrow, that's

348
00:21:13,050 --> 00:21:18,910
pointing to about half of the
congregations that are growing.

349
00:21:18,910 --> 00:21:27,190
I think we all want to
be in that quadrant.

350
00:21:27,190 --> 00:21:33,900
So with respect to growth, we
need both urgency and hope.

351
00:21:33,900 --> 00:21:37,610
We are seeing growth in close
to half of our congregations

352
00:21:37,610 --> 00:21:40,480
in three of the five regions.

353
00:21:40,480 --> 00:21:43,920
When we talk about
growth, we need

354
00:21:43,920 --> 00:21:51,320
to use the word congregation
as often as we can.

355
00:21:51,320 --> 00:21:56,550
Fundamentally, our growth will
come from the transformation

356
00:21:56,550 --> 00:22:01,150
and sustaining of
our congregations.

357
00:22:01,150 --> 00:22:04,280
We need to address the
decline in RE enrollments.

358
00:22:04,280 --> 00:22:07,810
That decline actually began--
there have been some bumps,

359
00:22:07,810 --> 00:22:10,810
but it began over 10 years ago.

360
00:22:10,810 --> 00:22:13,910
That's got to be a bad sign.

361
00:22:13,910 --> 00:22:17,100
And we need to be blunt
about the facts of decline

362
00:22:17,100 --> 00:22:23,690
and nuanced about
the facts of growth.

363
00:22:23,690 --> 00:22:29,170
So lastly, I want to
talk about generosity.

364
00:22:29,170 --> 00:22:38,370
Let's hear it for generosity.

365
00:22:38,370 --> 00:22:41,970
I didn't invent this phrase,
but to me, all religion

366
00:22:41,970 --> 00:22:44,370
is summed up-- the
purpose of all religion

367
00:22:44,370 --> 00:22:47,920
or the message of all religion
is summed up in that phrase,

368
00:22:47,920 --> 00:22:52,420
you are not alone.

369
00:22:52,420 --> 00:22:56,410
And too many of us, too
many of our congregations,

370
00:22:56,410 --> 00:23:01,570
like to behave as if we are.

371
00:23:01,570 --> 00:23:05,660
We are indeed interconnected.

372
00:23:05,660 --> 00:23:09,170
And part of that interconnected
is a spiritual practice

373
00:23:09,170 --> 00:23:14,480
of generosity to one another.

374
00:23:14,480 --> 00:23:19,520
So I hope, actually, that we
will give-- congregations give

375
00:23:19,520 --> 00:23:22,240
to the UUA, congregations give
to local community groups,

376
00:23:22,240 --> 00:23:25,900
individuals give to the UUA
and to their congregations--

377
00:23:25,900 --> 00:23:30,990
as I said earlier, not because
of what those groups are

378
00:23:30,990 --> 00:23:34,570
doing-- not
fundamentally that way.

379
00:23:34,570 --> 00:23:37,160
You don't want to
give to bad causes.

380
00:23:37,160 --> 00:23:40,150
But not because of what
those groups are doing,

381
00:23:40,150 --> 00:23:44,460
but because of what
that does to you and me.

382
00:23:44,460 --> 00:23:50,570
I give as a spiritual
practice and judge

383
00:23:50,570 --> 00:23:54,040
only slightly how
that money is used.

384
00:23:54,040 --> 00:24:01,000
I do that for me.

385
00:24:01,000 --> 00:24:06,060
I don't give because I'm
giving until it hurts.

386
00:24:06,060 --> 00:24:12,350
I'm giving it until I
just burst with joy.

387
00:24:12,350 --> 00:24:21,890
Then I've given enough.

388
00:24:21,890 --> 00:24:29,110
So I want to close with a very
famous quote from this lady

389
00:24:29,110 --> 00:24:33,910
here.

390
00:24:33,910 --> 00:24:37,330
I promised Jim at least
a little bit of history.

391
00:24:37,330 --> 00:24:43,150
During our history,
people of color and women

392
00:24:43,150 --> 00:24:50,280
struggled hard and mightily to
provide religious leadership

393
00:24:50,280 --> 00:24:52,790
to our congregations.

394
00:24:52,790 --> 00:24:55,800
It was not easy.

395
00:24:55,800 --> 00:25:00,610
If you read the
story of this lady,

396
00:25:00,610 --> 00:25:05,890
she did not have an easy time.

397
00:25:05,890 --> 00:25:11,000
But she made possible
the ministries so many

398
00:25:11,000 --> 00:25:12,760
of the-- she and
people like her.

399
00:25:12,760 --> 00:25:15,210
She did obviously not
do it all herself.

400
00:25:15,210 --> 00:25:19,950
But of those who struggled--
the Ethelred Browns, the Joseph

401
00:25:19,950 --> 00:25:25,470
Jordans, the Olympia Browns,
all of those people--

402
00:25:25,470 --> 00:25:28,980
they made possible
the diverse ministry

403
00:25:28,980 --> 00:25:30,970
we are beginning to see now.

404
00:25:30,970 --> 00:25:37,570
They made possible the ministry
of my wife, my daughter-in-law,

405
00:25:37,570 --> 00:25:44,240
my daughter, all that possible
because of the struggles

406
00:25:44,240 --> 00:25:48,280
that she and people
like her went through.

407
00:25:48,280 --> 00:25:52,190
So I just love this quote
with which I will end.

408
00:25:52,190 --> 00:25:58,290
This is in 1926 at the end
of a very difficult career.

409
00:25:58,290 --> 00:26:01,700
"Dear Friends,
stand by this faith.

410
00:26:01,700 --> 00:26:06,260
Work for it and
sacrifice for it.

411
00:26:06,260 --> 00:26:09,920
There is nothing in all the
world so important to you

412
00:26:09,920 --> 00:26:16,460
as to be loyal to this faith
which has placed before you

413
00:26:16,460 --> 00:26:22,600
the loftiest ideals, which
has comforted you in sorrow,

414
00:26:22,600 --> 00:26:25,680
strengthened you
in the noble duty,

415
00:26:25,680 --> 00:26:31,750
and made the world
beautiful for you."

416
00:26:31,750 --> 00:26:46,570
Thank you very much for
the opportunity to serve.

417
00:26:46,570 --> 00:26:49,130
Larry never disappoints
on the history.

418
00:26:49,130 --> 00:26:50,680
Thank you, Larry.

419
00:26:50,680 --> 00:26:54,946