Our Strategy

Establishment of Acaa Endowment Funds 1992

In 1992, at the ACAA Convention, there was, by unanimous vote, a decision that all designated and endowed funds shall be preserved in the principal amounts and only the income from dividends, interests, and other means shall be expended. This decision mandated to the newly elected ACAA Board of Directors & each successive ACAA Board of Directors thereafter; that this task be formulated and prioritized prior to the next convention.  Immediately, the newly elected ACAA Board of Directors in 1992 under the Chairmanship of Vasken Aivazian created the Property & Asset Committee-Endowment Funds Committee and appointed three Trustees to manage, in a professional & conservative fiduciary manner; the investments & real property assets of the organization into a viable and organized fiduciary funds management concept.  

Prior to this mandate, the stock portfolio had been in a dormant status since its previous aggressive management by Ret. Col. Harry Sachaklian, who had brought its existence into a recognizable condition.  Previous capital donations or bequest had been inter-mingled with normal operating funds and utilized into the daily operation.  This new mandate demanded a different approach and Bedros C. Bandazian, as the Managing Trustee was assigned, to formulate the proper process for administration & accounting of these funds.  Once instituted into a proper and recognizable format, the ACAA Board of Directors anticipated that with good public relations, efforts by our ACAA Membership and by education, these funds would indeed grow and enhance the operation of the organization. 

Since the Armenian Cultural Association of American, Inc. had previously been established on May 10, 1969 in the Commonwealth of Massachusetts as a 501©3 not for profit corporation, a new tax-exempt entity was not necessary.  The initial operation of the funds management was under the direction of the parent corporation, but the intense management and documentation was instituted as a viable subsidiary entity.  A separate management concept known a Standing Committee but under the ACAA ownership.

Income Allocation

In 1997, the ACAA Board of Directors created a financial policy that the funds from any endowment income shall be allocated to an ACAA Equipment & Repair Reserve Account.  Thus, the board established a separate account to receive the income from the investments.  Whenever the funds accumulated to a reasonable amount and needed office equipment or repairs were necessary, then the funds could be utilized for this purpose.  During these many years, this system has allowed the office to purchase new computers, new software programs, new telephones and many other items needed to run a modern and efficient office.  It is not known if this practice is currently being followed or adhered.

Previously, these funds had been co-mingled into the existing accounts of the organization without any true identification or purpose.  This income was then used to supplant normal operating expenses and the value was buried in the maze of everyday office business.  This new process enabled the office to be assured of special funds not anticipated in budgetary operation.   No longer was there the difficulty of constantly seeking outside sources for new equipment or repairs. Funds began to accumulate to the benefit of the operation.  Thus the benefit of this system became more relevant and visible, adding to its credibility of a more modern fiduciary control.

A.C.A.A. Endowment Fund - Policy & Procedures

In order to solidify this new process, a definite policy and procedures needed to be established. This was created through the adoption of certain standards created by the Endowment Funds Committee with the approval of the ACAA Board of Directors. Three Trustees were appointed to manage and supervise these accounts. Each Trustee was granted a term of Seven (7) Years but serve at the will of the ACAA Board of Directors. During the Trustee Term of Office, No Trustee shall be elected or serve in any capacity as ACAA Board of Directors, its Officers or Paid Employee. The Managing Trustee handles the day-to-day nuisances of the funds management with direct dialogue and input from the other Trustees. Only the Managing Trustee is involved in the relationship with the brokerage house, accountant and legal counsel. This system was established in order to avoid multiple voices and to avoid confusion of policy. In matters of policy, procedures, mandates or other viable matters, the Managing Trustee must have the approval of a majority of the Trustee Body in order to move forward. The Trustee shall receive no salary or paid compensation except travel expense for ACAA Endowment Business, supplies and postage, back office expenses for administrative duties of the Endowment Fund. Basic administration is left to the Managing Trustee with the advice and counsel of the other Trustees. Though initially appointed as the Trustees for the Hairenik Endowment Fund, these three Trustees operate now as the administrative body for all of the fiduciary funds owned by the organization and its various entities. The policy and procedures is documented with all brokerage companies handling our funds. Deviation from this policy must be made by properly executed corporate resolutions in accordance with adherence to current statutes of Federal and State Governmental bodies.

An annual report is given to the organization administrative body in written format. This report is presented to the membership and the input from this membership is an integral part of the entire report. A separation of reports is necessary in order to preserve the integrity of the funds and the concept of endowment. The principal of these funds is never invaded and only the income can be utilized. Because of the 501©3 status, extreme care must be adhered in order not to violate Internal Revenue Tax Codes. A violation of governmental tax-exempt codes would disenfranchise the status of the Armenian Cultural Association of America, Inc. Trustees and the Board of Directors can be personally held accountable for any violation of the tax-exempt status of this entity. Extreme diligence and strict compliance must be exercised in order not to violate governmental regulations and public trust.

In 2000, the named Trustees, Bedros C. Bandazian, Harold Mardoian, and Kenneth V. Hachikian were designated by the board to continue their administration of this fund in conjunction with the other accounts of the organization, so recognized as Endowment Funds. Kenneth V. Hachikian resigned in 2002. Harold Mardoian resigned subsequently in 2003 because of health reasons. Aram A. Sarafian was appointed by the board to complete Hachikian’s term which expired on May 23, 2003 and serves to date. At its official meeting in April 3, 2010, the ACAA Board of Directors in consultation with the Managing Trustee of the ACAA Endowment Funds, appointed Richard J. Krikorian as an Associate Trustee. This appointment has been ratified by a Corporate Resolution of the same date designating, Richard J. Krikorian as an Associate Trustee for the term beginning May 2, 2010 and ending on May 1, 2017. This Seven (7) Term will continue in subsequent years unless the ACAA Board of Directors decides otherwise. All Trustee serve at the pleasure of the ACAA Endowment Fund. Removal can be for just cause of change of focus in management principles. Increase in the number of Trustees must be mandated and approved by the ACAA General Membership at its annual meeting with proper discussion and allowance of substance cause. The ACAA Board of Directors cannot deviate from the normal policies and procedures established over the years. Any illegal manipulation could be subject to Federal Investigation and voidance of the non-profit status of the ACAA.

The ACAA Board of Directors has been advised that formal corporate documentation is required of any appointment with proper resumes and background. These documents must be filed with the governmental bodies and brokerage houses to have validity and credibility in the operation. Again, the income from this fund is passed on from the ACAA Board of Directors to the Hairenik Association for the benefit of equipment and other capital needs that are deemed necessary by Hairenik management. The Trustees do not dictate the use of the funds once disbursed to the organization.

The Trustee’s responsibility is to use prudent fiduciary care in the management and administration of the organization funds. Conservative management, with the goal of principal preservation and income gain is the guiding policy of the Trustees. Speculative investments are avoided. A standard of management & investment strategy has been developed with the current brokerage houses of Smith Barney/Morgan Stanley, Inc. at their Washington, DC Branch, Morgan Stanley, Inc. at their Washington, DC Branch and Davenport & Company, Inc. of Richmond, Virginia. Our financial consultant at Salomon Smith Barney, Inc. was Mr. Aram Paul who was trained by Mr. Harry Sachaklian who administered our accounts until his retirement. Aram Paul has since passed away and the Endowment Fund Trustees have begun business with other brokerage houses, Morgan Stanley, Inc. of Washington, DC and Davenport & Company, Inc. of Richmond, Virginia. Each of these Brokerage Houses has full documentation of the policies & procedures of ACAA Fiduciary Management and demand for continuing this attitude of investment is primary. Any deviation is considered an exception to Policy & Procedures and any change must be written approval from the Board of Directors. The ACAA Board of Directors and Trustees receive the Monthly Statements from the brokerage houses. Advice & counsel of policies and procedures are welcomed from all parties. Whenever feasible, the Trustees attempt to meet to discuss the various activates of the accounts.

 The Creation of Trust Agreements for ACAA Endowment Funds

The preferred and recommended procedure for establishment of ACAA Trust Agreements is to have the Donor, their Attorney, the ACAA Trustees and the ACAA Board of Directors create the Trust Agreement prior to an Estate status. By negotiating in advance, all parties are aware to the intent of the Donor and the realistic ability for the ACAA Endowment Fund to handle the bequest. The Trust Agreement can establish the details of the intent with or without funding at the current time. If the Donor wishes to begin the Trust prior to any bequest, is no issue but a once the Trust has been created and all parties are in agreement; then all parties will execute the drafted Trust Agreement. The Donor, the ACAA Board of Directors primary Officers and the ACAA Endowment Fund Trustees all must sign the Trust Agreement Implementation will begin once the Trust has been funded.

When the ACAA Board of Directors receives bequest and there is no prior Trust Agreement, the standard and accepted principles of management normally negotiated by a Donor and/or its Estate with the ACAA Board of Directors and its Endowment Fund Trustees, will then follow the accepted principle of preserving the principle, distribution of the annual dividends and interest and annually distribute any Equity enhancement using the accepted accounting system developed for the ACAA. Legal opinion has stated that once the funds are placed into the Endowment Funds system, it would become illegal to change this method and funds so deposited cannot again be withdrawn if considered principle dollar value amount. This is in accordance with the federal and state rules and regulations. Donor’s intent should be followed. Donors give in order to establish a Legacy.

In the event there is any invasion or taking of dedicated funds, the ramifications for the ACAA Board of Directors and Trustees are grave. Those who violate any of the policies and procedures could be subject to criminal charges and the Organization could lose its non- profit status and be dissolved by governmental authorities.

One of the most important aspect of fiduciary management is to maintain credibility. Donors must feel that the designated funds will remain intact and the remembrance will be ad infinitum. This perpetuation of the memory creates a positive image with the Donor and encourages continual giving. Credibility in the management, usefulness of the funds income and continual memoriam are successful combination for management of Endowment Funds. All the ACAA used brokerage houses are fully aware of the policies and procedures in the management of these funds. This has been documented within their archives. With each new broker, the entire philosophy of the ACAA Endowment Fund management principles is reviewed. There is a positive and clear understanding of management directives of these funds. Any deviation will warrant “red flag” and consequence measures must be adhered. Our goal is first to preserve capital, derive positive annual income and enhance respectable value without jeopardizing the Goals and Mission of the Armenian Cultural Association of America, Inc.

Acaa Endowment System Now Being Utilized by Affliates

For the past several years, this manner of administration has been reviewed and many inquiries have been received by our Affiliated Organizations for guidance and assistance in management of their Funds.  The ACAA Board of Directors took an active role in promoting the assistance to these Organizations to help management of their financial and fiduciary duties.

This system which has been developed by the ACAA Board of Directors and Trustees has now gained a respectable image among many others.  It has been continually revised and involved many professional management individuals and experts to develop an Organizational System which will be acceptable for our Organization and Affiliated Organizations.  With the approval of the ACAA Board of Directors, the ACAA Endowment Fund Trustees worked to create these new and future Endowment Funds