jmf 2011 chairmans report
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1 JMF 25th AGM “As We Contemplate The Future” June 28, 2012
JAMAICA MEDICAL FOUNDATION
25th ANNUAL GENERAL MEETING, June 28, 2012
IAJ HEAD OFFICE
CHAIRMAN’S REPORT 2010/2011
THEME: ‘AS WE CONTEMPLATE THE FUTURE’
INTRODUCTION
Colleagues of the Jamaica Medical Foundation, Special Guest Mr. Hugh Reid, newly
elected President of the Insurance Assoc. of Jamaica (IAJ), IAJ and other Insurance
Company Executives, Other Distinguished attendees, Ladies and Gentlemen
Welcome to this the 25th
AGM of the Jamaica Medical Foundation.
It is always a pleasure to meet and update you on the activities of this very important
Foundation and, this year being our 25th
Anniversary; it makes it even more important
that I do. I will do so under the Theme “As we contemplate the future”.
Allow me to begin with a quote shared with us by Mr. Lloyd A Vermont Sr., our Hon
Secretary, at our Trustee Meeting of Jan 03, 2011. It is this:
“A man may not achieve anything great he has dreamed about,
But, he will never achieve anything great without having dreamed it first”
(William James, Father, American Psychology, 1842-1910)
The reality is that, we believe that the attainment of age 25 offers us an opportunity for
evaluation, review and forward planning and so, much of my comments will revolve
around this theme.
Before I focus on some specifics, let me further put things in perspective by putting it
this way. In the future of which we speak, and which begins as of now, our Foundation
can take one of two forms as follows:
1. Figuratively, it can take the form that majors in minors i.e. being able only to do
small gifting from a small capital base (even though we know that there is an
important place for small donations) or
2. The form that embraces the philosophy of great philanthropies and, over time,
build and pattern itself off such as the Rhodes Trust, and Nobel Trust, (worldwide
philanthropies), whose ability to do big gifting is the norm because, they do so
from a capital base that was allowed to grow to a very large size
In the process of introspection, it is important that we reflect on these things if we are
to fulfill the mandates of our founders which are to:
2 JMF 25th AGM “As We Contemplate The Future” June 28, 2012
a. Give assistance for medical interventions at individual and institutional levels,
and
b. Fund research into the medical conditions that affect our Jamaican people
In these respects, and as we keep on saying against the perspective of a ‘raging sea of
requests’, the ‘couple million dollars’ in our name (Twenty Four Million at this time) do
not ‘cut any dash’ . The Fifteen Million that we had bravely promised for a Prostate
Cancer Research Project, something very badly needed, would eat up more than half of
it! Hence our Theme at this AGM.
It could be time for a game-changer. Should your Foundation, for example, be the
starting point for a truly Jamaican Philanthropy with a broad-based directorship that
engenders a secure funding base?
FOCAL POINTS THIS YEAR
In my last Report to you, I spoke on six (6) of the seven items below and, of necessity, I
will have to speak to them again with one important addition. We have started a new
investment account in a Foreign Currency. More on this later.
The seven (7) topics are:
1. Better alignment with the present Insurance Industry in search of a more secure
funding base and the Constructional Review that this would require bearing our
mandate in mind
2. Cultivation of the Diaspora in search of an additional funding base
3. Financial Report for F/Y 2010-11
4. Opening of investment in a foreign currency
5. Review the matter of the adequacy of our ‘Twenty Million Dollar’ base to more
seriously respond to our mandate
6. Donations during the year
7. The proposed 25th
Anniversary Banquet
These, in fact, remained the focus during the year under review and I will update you
accordingly.
3 JMF 25th AGM “As We Contemplate The Future” June 28, 2012
ITEM # 1
Better alignment with the present Insurance Industry in search of a more secure
funding base and the Constitutional Review that this would require bearing our
mandate in mind
I believe I can say that we have made some progress in this regard and, in my next
Report, I hope to be in a position to give you the specifics of that progress
As you know, the Foundation started as the outreach arm of the life insurance industry
(No General then) of the 1980s. Then, there was a close working relationship between
the Foundation and the leadership of the industry because, in a real sense, the industry
was the parent of the child (‘JMF) but, this relationship went further than just
parent/child. During those times, the Foundation knew for sure where its support base
was and had the confidence that this base was there to support its various functions and
assist in growing it’s capital base. The idea was that it (Foundation) would grow to
become a really pivotal Jamaican philanthropy.
It is now, however, a matter of public knowledge that the Jamaica of the 1980s when,
for example, the exchange rate was in the region of J$5, is a different ‘person’ from
what it is today. Nearly everything has changed. The exchange rate yesterday was
J$88.7 (www.mayberryinv.com) and, the economy has remained not just tight, but
stifling.
The net result is that, the industry that gave birth to the Foundation is no longer in
existence. Like the country, that industry has changed. There is now a new kid on the
block (‘IAJ). To its’ credit, (and not because the new IAJ President, Mr. Hugh Reid is our
Special Guest today) it has gone out of its way to be very accommodating to us. What
your Foundation would like to do, however, is to concretize the upgrading of the
relationship from ‘accommodating’ to one that takes us back to where we were when
we were founded.
As I said earlier, a lot of background work has been done since my 2010 Report to you.
We, your Trustees, have looked at an integration and alignment framework that we
believe is both doable and workable. The IAJ, for its part, has done an extensive review
of Corporate Social Responsibility (CSR) regimes within the Industry. Our expectation is
that, in a short while, the IAJ will accept our invitation for dialogue. This is how we see
it. The JMF has Twenty Four Million Dollars (2011 Audit) built up over 25 years and is
interested in finding a support base for its development into a major Jamaican
Philanthropy. We believe we have most, or much, of the platform that the Industry
(IAJ) may be looking for as a kind of launch pad for its Social Responsibility Outreach.
With goodwill on each side, the base is probably well set for discussion that could lead
to permanent alignment. If so, your Foundation, in a sense, would have ‘gone back to
the promising future’ that we once had.
4 JMF 25th AGM “As We Contemplate The Future” June 28, 2012
ITEM # 2:
Cultivation of the Diaspora in search of an additional funding base
We did not ‘test the waters’ in the Diaspora as we had intended to do. One main reason
was our preoccupation with the new Constitution and alignment with the Insurance
Industry. Another is the continuing search for the best way to explore so that any trip
will be successful in generating some funds or at least cover our expenses. The search
goes on.
ITEM # 4
Financial Report for F/Y 2010-2011
Even though the economic environment remained difficult, the Foundation’s financial
position showed some overall improvement over that for the prior year in some key
areas as follows, 2011 vs. 2010:
a) total investment value $19.3 vs. $14.8 up 29 % (22% in 2010)
b) finance income $1.5 vs. $1.82 down 15% (-18% in 2010)
c) administrative expenses $1,099,975 vs. $662,000 up 66% (-19% in 2010)
d) surplus for the year $3.8M vs. $3.0M up 26.8% (up 667% in 2010)
e) Total reserves $24.2 vs. $20.4 up 18.7% ( up 17 % in 2010
As you know, consequent on the JDX, everyone who earned interest on their investment
suffered a fall in interest income and your Foundation was no different. Happily for us,
because of our equity investment protocol, we continually leverage our share value to
give us an advantage whether the market is going up or down.
What we do is to use our dividends to buy additional numbers of shares in the
companies that pay these dividends. The result is that when share prices drop, a unit of
dividend buys relatively more units of shares and vice versa. The net result of this
strategy is that the Foundation keeps on building up more shares and, when share prices
go back up, the additional number of shares is reflected in a better than normal upswing
in investment value because, there are now more shares in the pool.
Not surprisingly, therefore, there has been shift in the composition of our Investment
Pool. In respect of the investment value at a) above, the breakout is:
2011 2010 2009
Fixed income $ 6,064,219 $5,094,138 $5,033,985
Equity value 13,064,691 9,728,963 7,051,689
Whereas the F. Inc/Equity mix in 2010 was 34.7$ vs. 65.3%, in 2011, this was changed to
31.7% vs. 68.3%
5 JMF 25th AGM “As We Contemplate The Future” June 28, 2012
ITEM 4
Opening of investment in a foreign currency
During the year under review, we used One Million Dollars of the dividends from our
Equity Investments to open a Foreign Exchange Account. While the country’s exchange
rate was stable for the longest while in a very long time following the successful JDX
protocol, we felt it was prudent to hedge some of our ‘financial bets’ going forward.
Accordingly, we opened an Account in Scotia Group’s Caribbean Income Fund,
denominated in US dollar when the exchange rate was J$86.1 (Sept 30, 2011). You will
recall that I said earlier that yesterday it was J$88.7 (June 26, 2012) meaning that our
initiative is ‘bearing the fruit’ that we anticipated. Two reasons guided our choice of the
Fund. Firstly, it is under the umbrella of the strong and reputable Scotia Group.
Secondly, it is registered outside of Jamaica in a tax free regime which means no
deductions from our investment earnings.
ITEM 5
Review the matter of the adequacy of our ‘Twenty Million Dollar’ base to more
seriously respond to our mandate
Much was said about this in my last Report and at the beginning of this one and, since I
have indicated we are at a point where we can dialogue with the Industry about closer
integration, it might be appropriate not to say much more about this at this time. Suffice
it to say that we must always bear in mind the admonition of a former insightful Prime
Minister who has always reminded us that “it takes cash to care” Let me say, though,
that it is against this background that the Foundation is seeking to identify a support
base from which to move its ‘twenty-something’ million capital base, over time, to one
that could, for example, accommodate the Fifteen Million Dollar request for the
Prostate Cancer Research Project.
ITEM # 6 DONATIONS
During the year, the Foundation gifted away more than Three Hundred and Sixty Two
Thousand Dollars ($362,000) to five recipients at an average of just under Seventy Five
Thousand ($75,000) Dollars. This is an area in which we want to be more active and
hence the matter is under careful review especially in light of the fall off in interest
income
6 JMF 25th AGM “As We Contemplate The Future” June 28, 2012
ITEM 7
The Foundation’s 25th anniversary in 2012
In my last Report, I indicated that the year 2012 marked the Twenty Fifth (25)
anniversary of your Foundation and that we would celebrate it with our best Banquet
ever. However, in reviewing the matter, we agreed that although it was registered in
1987, it did not start operations until 1988. We therefore decided to mark the event in
2013 and have set the date of Saturday, March 30, 2013 for this Banquet and I invite
you to mark your diary because, I am sure that Trustee Thomas James and his Banquet
Committee are going to make it a stellar affair .
FOUNDATION WEBSITE
I also want to remind you that our website is now fully operational and can be visited at
www.jamaicamedfoundation.com It is linked to the Jamaica Gleaner’s website, one of
the most visited websites in Jamaica and the Diaspora. In due course, we will optimize it
to receive funds from anyone wishing to contribute to whatever cause we are focusing
on from time to time.
These then, are the updates on the seven (7) areas of focus and I trust they have spiked
your interest and will give you much food for thought.
Thank you very much.
.
Prepared for Chairman by
Lloyd A Vermont Sr.
Hon. Secretary
June 27, 2012