Atlanta IV

     Over a year ago, the Executive Committee initiated a review of Board of Trustees Policies which had been established over many years.  They needed to be coordinated and many were out of date.  The task of codification and revision was divided up and the Financial Advisor was given the responsibility for Investment Policy.

     Last January, after almost a year of study by the Investment Committee, your Board of Trustees adopted a new Investment policy.  Later in the year, as public concern about conditions in South Africa mounted, we took this question up in the context of our new investment policy.  In successive actions at our April and June meetings, our Board adopted a specific policy regarding investment in such securities.

     It was very hard to find the right path, balancing the responsibility to nurture our investments, and trying to achieve the greatest possible return on our investments to fund what the General Assembly, the Administration and Board believed we should do.  As the elected Financial Advisor, I was captive to the dilemma of South African Investments as much as anyone and, perhaps, by background, more caught on each of its horns than many of my fellow UUs.

     The issue of apartheid itself is simple.  Adopting the appropriate institutional response was complex, and in itself, posed ethical problems.  What the Board put on the scale was a simple question wrung out of the complex issue.  Was there any position, short of a commitment to complete divestiture, that would make clear to our constituency and to the outside world our overriding concern about the moral issues raised by apartheid?

     We knew some of the 60,000 to 70,000 blacks employed by American companies in South Africa could suffer directly, and many more of their dependents and others in the economic chain could suffer as well from a withdrawal by U. S. companies from South Africa.  We knew our action by itself might accomplish little more than a P.R. ripple.  We knew, although we could limit our direct monetary losses to only the transaction costs by carefully executed sales, the test would be:  in what do we invest the proceeds of divestiture sales?  We knew we were going to be seriously handicapped in reinvesting those proceeds.

     The bottom line is that there is an ongoing cost association with the operation of a South Africa-free portfolio and, although it is difficult to quantify, our investment managers placed it between one-half and one per cent per year.  In other words, on the approximately $30 million of assets  in the UUA’s own investment portfolio, we might expect to realize some $150,000 to $300,000 less each year as a result of the adoption of a divestiture policy.

     Sometimes, great issues can only be dealt with in the simplest terms.  The UUA Board of Trustees weighed all these factors and adopted a policy calling for full divestiture.  The ultimate bottom line was perceived to be apartheid and that is what we dealt with.

     I have to tell you that many UUs, myself included, have had a very difficult time with this issue.  I have literally agonized over it for the better part of the past year.  Those of us concerned have had to find the right path, balancing:

     1.  The responsibility to nurture our investments as the Trustees we are and achieve a return on our investments to enable us to fund as many as possible of the programs and services we believe we need;

     2.  Questions about how much a policy of divestiture would, in fact, influence conditions in South Africa; and

     3.  The need, in the context of this issue, to make a religious statement about apartheid that is clear and unambiguous.

     In the eyes of our own constituency and of the world outside, we needed to say -- all investments considerations weighed -- the ultimate consideration was our conviction about apartheid.

     Our decision making process has been as informed as it could be.  We know other responsible fiduciaries of religious and charitable organizations and foundations have taken similar action.  And we have looked ourselves in the eye -- checked our profiles in the three way mirror -- and said:    We must do this.

     To allow no ambiguity, no misunderstanding about our perception of apartheid, we are going to accomplish this divestitute in the quickest and most reasonable way.  We know it will not be easy.

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