Presentation Given at Llama Assembly ‘97

The Lama Steering Committee picked up where the Unification Working Group left off. Our job was to implement the plan of unification.

Let's review briefly the Lama Strategic Planning Group's goals.

1. Achieve a broad membership base of the North American populace in the lama industry. The use of "one L" lama here indicates that the Alpaca community should be included in this broad base. The term "broad base" would indicate as many of the lama owners participating as possible.

2. Have an organization structure reflective of the mission. Present a unified front throughout North America in the realm of governmental issues, research, marketing and promotion. The words marketing and promotion are not bolded to indicate this committee feels it didn't achieve that part of the goal. We did focus on the "unified front throughout North America in governmental issues and research. We feel those two issues are where the lama community has the highest level of concern and therefore the highest possible likelihood of being approved if the unification effort is to be successful. ? MARKETING? of who's lamas, yours and not mine. Who is going to pay for the marketing of your lamas, me? The Steering Committee left the door wide open for further development of the idea of marketing. This is a subject that will take time to develop a plan, and should be done by an elected Board representing the entire lama community, not an appointed committee like ours.

3. Develop stable financial structure of the newly formed organization. This committee feels that if we accomplish nothing else, we should try to come up with a stable financial source for issues of national concerns such as the Canyonlands. As stated earlier today, the Canyonlands Tasks Force has sufficient funds for the immediate task at hand thanks to all the generous and heart warming donations. ....But what are we going to do if the litigation gets protracted. Will we need more funds? Do we suspend the litigation process and launch another fundraiser. What level of comfort will our attorneys have knowing our bank balance is a bit shallow. We can't and shouldn't always turn to the ILA. The ILA launched a fundraiser of their own to just cover phone expenses that Scott and Stan ran up dealing with Walter. Is this the way our industry should operate? We must come together and find a better way!

4. Address issues of widespread industry interest. The Lama Strategic Planning Group clearly stated widespread concerns not local issues, our committee endorses that idea 100%. This committee has intentionally NOT addressed all issues of widespread interest. We feel again those issues should be addressed by a group elected and representative of the entire lama community.

MISSION & VISION

This is basically restating the goals reworded in the form of a mission statement. The Lama Strategic Planning Group must have felt that the mission statement should be the cornerstone of any new effort at unification.

"Present a unified front throughout North America in the realm of governmental issues, research, animal health, marketing and promotion."

And the VISION should be ". . . . An organizational structure reflective of the broad interests and diverse backgrounds of the membership with the ability to continually attract and maintain new members." "....reflective of the broad interests and diverse backgrounds of the membership...." This is what this committee felt could not be overlooked, it must be a part of any plan we come up with !!

The Lama Strategic Planning Group stated ...

...We believe that this Steering Committee ( they are referring to our Steering Committee) should include officers of the ILA, ILR and ALSA as it must be determined whether a consolidation of these organizations is possible. The Steering Committee should then meet with AOBA, LANA and other interested organizations (RMLA) to discuss their participation in a new national organization.

Nelson and Marilyn have answered the question "determine whether a consolidation (MERGER) of those organizations was possible." If the votes were close, one might make the argument to continue dialogue along the lines of merger...but a vote on average of 2:1 opposing merger is not close. So what is next? Let's look to see what the Unification Working Group had to say at last year's Llama Assembly about continuing the unification process.

.....Both the ILA and ALSA have expressed a willingness to be an integral part of the formation and possible implementation of unification plans...

Here is a problem ALSA never agreed to be a part of UWG's merger plan. They did say they would consider any plan that was placed before the Board and give it a fair hearing. Once it became evident that the word unification meant MERGER, the ALSA Board said thanks but no thanks.... let's just say that no amount of orgling was going to get any other response then the stud gets from a pregnant lama when he tries to mount her, you're going to get spit off. Just the assumption that ALSA would consent to merger may have played a role in ALSA taking not one but two votes dealing with the question of affiliation with the ILA. The answer was no affiliation both times and one must assume that means no merger as well.

The UWG goes on to say....."ILR has expressed opposition both to the Strategic Plan and the work of the Unification Working Group. We believe it is crucial to the future of this industry for the ILR to participate in the unification effort. If it does not do so, ( here is the definitive statement ) we see no point in attempting to implement the Strategic Plan at this time."

Not only did the ILR not go along with the merger but ALSA didn't either. Coupled with the fact that probably all ILA members are ILR members and that approximately 25% of those responding to the ILR survey were ILA members one might make the case that the ILA membership doesn't support the merger plan either, at least not overwhelmingly so. That would be 2 out of 3 and maybe 3 out of 3 organizations involved in the Merger Plan saying no.

This is where this committee came on the unification scene. This Committee worked to retain as many of the necessary key goals and stay as close as possible to the original mission statement.

"Present a unified front throughout North America in the realm of
government issues, research, and animal health..."

But where do we start?? RMLA had a survey, as well, and there we find a glimmer of hope

"Do you feel that a charter or constitution could be written such that you could endorse it? 64% said YES

This tells us there just might be a unification plan that would be acceptable, it just hasn't been presented yet. The Lama Steering Committee needed to formulate a starting place for the unification process. But would the lama community contribute to any lama organization? After all the ILA had asked their affiliates to contribute $2.00 per member, less than the price of lunch at McDonalds. The affiliates said no and it was explained that they just couldn't afford the $2.00. Why couldn't they see the value of addressing issues of national concerns? Maybe its not the amount, but some other factor! Let's look at what the RMLA membership had to say about supporting a national organization.

If RMLA would ever join a unified group, what percentage of your dues should be committed to fund this new organization? 27% of their dues or about $9.45.

You all met the RMLA Treasurer earlier today and with that thought, she is probably having kittens in the back of the room as we speak. That % would be a real stretch for us, or is it? The Utah Llama Association donated over $60.00 per member to address the Canyonlands issue. The point is I doubt that $2.00 is the real issue here.

What is the difference between an ILA affiliate paying a $2.00 tax and RMLA, LANA and many other lama organization willingly contributing far more. The difference, this committee feels, is that those donating have a say, or determination, in how those moneys are spent. No tax without representation....I think we should have learned that lesson at a tea party a couple hundred years ago.

I am going to address the Governance of the organization responsible for collecting funds and determining how those funds are to be spent. I will not address the amount of funds to be collected, Mary Reed will address that later.

This proposal is to create a new lama organization. I know, this is the last thing we need, one more lama organization, we need to consolidate not create a new layer of bureaucracy. But wait, we probably have close to 100 lama organizations, I have identified just over 60 and I'm sure there are many more, particularly if you begin to count local marketing organizations. So what is one more organization if it becomes the final road to unification, the focal point? Where key issues of national concerns are addressed such as medical and government relations. What is truly different is that ALL lama organizations may participate, share their views and then vote on the issues. VOTE not just collected opinions.

What we have is a nine member Board of Directors. The national organization will have what we are calling "permanent seats." This simply means the person sitting at that seat has been appointed by their respective organization as opposed to being elected. ALSA, AOBA, ILA, and the ILR are the national organizations with permanent appointed seats.

There are five regional seats held by individuals elected from geographic regions across the country. The boundaries for those regions were drawn to reflect regional points of view. The Committee felt that regional points of view should be protected and not homogenized in such a way that they lose their distinct points of view. The second objective was to draw those boundaries in such a way as to have equal numbers of lama owners in each. As you can see we failed on that point unless we can convince a mass migration from Oregon to New England. We have gone ahead and drawn our map and all of you have copies, so take your felt pen out and come up with five regional boundaries of your choice.

Regional lama organizations within the regions may nominate a candidate. That name would be turned into the Trust Fund office. Candidates would submit position papers or campaign statements and biographies to the office. Prior to the election all the candidates names and bio's would be distributed to the Boards of Directors within the region along with a ballot. Each organization would cast a vote equal to their previous year's membership. Later you will see that contributions are tied to the membership and consequently votes. This ties funding and governance decisions together.

We now have our nine-member Board. They will take a vote among themselves to determine who will serve as corporate officers. We envision that Board meetings will be handled in the same fashion as many other lama organizations via teleconferencing.

In an effort not to duplicate the efforts currently being made by existing lama organizations, it is intended that current organizations be utilized as much as possible. Note: the two committees that the Trust will be funding are to be administered by the ILA and dove tail in with their current Government relations program. The Government Relations Task Force committee may in fact be some of the same people at ILA currently fulfilling that task. We would like to add AOBA and officially recognize their contributions currently being made in government relations. The ILR's representative is asked to be included in recognition of their large and diverse membership. In order to combine funding and the decision making process it is necessary that the Trust Fund Board have faith in the recommendation of the committees. Therefore, all committee members will be ratified by the Board.

No changes are recommended nor contemplated in regards to the Lama Medical Research Group. We are fortunate to have a committee of this level working on our behalf and the Trust Fund is looking forward to assisting, to whatever degree necessary.

Both of these committees are to continue to be administered by the ILA. But now not only will the entire lama community share in the benefits derived from their efforts but we will now be sharing the expenses as well.

The National Lama Trust Fund will be a corporation with a nine member Board. The remaining question is what type of corporation. In this case there are two, maybe three possibilities to be considered.

The first is designated by the IRS as a 501-C3. Dues paid to a C3 corporation are considered charitable donations for tax purposes. The ILA is a good example of this type of corporation. All your dues and, most importantly, your contributions and fundraisers are tax deductible. But, what the IRS giveth, it can taketh away. In this case the down side is that a C3 corporation can not involve itself in "government lobbying." The actions of the Canyonlands Task Force are considered lobbying. Education is ok but not lobbying. When you sue the National Park Service you are now lobbying with extreme prejudice.

The ILA is unable to lobby in this fashion. That is why the RMLA, a 501-C5 corporation, is named on the Canyonlands action. All 501-C3 funds should be directed to non-lobbying activities such as medical research and education.

A 501-C5 corporation can lobby, educate, collect funds for research and conduct fundraisers. But the dues and contributions are not charitable deductions on your tax return. They may be deducted as a business expense, but only to the degree that you have profits from that business.

Some of you are thinking let's write our check to a C3 corporation and have that corporation pass those funds along to a C5 for lobbying purposes. Well "mon contraier monfair" the IRS has already closed that loop hole. A C-3 can not send a check to a C-5 but a C-5 can past along a check to a C-3.

The accounting firm of Mayer Hoffman McCann, the largest independent accounting firm in Kansas City and specializing in "not-for-profit corporations" Recommends "Based upon your desire to conduct both education and government relations (lobbying) for your members, I would recommend you set up two separate organizations. One organization would be a 501 (c)(5) organization. This entity would handle at least the government relations, as well as any other functions relating to promoting the lama industry. The second entity would be set up as a 501 (c)(3) organization with its primary purpose being education. With this organization being a 501 (c)(3), it could receive deductible charitable donations.

Please understand that if your only purpose is education and government relations, you could perform both those activities in one 501 (c)(5) organization. The problem with having only one entity is that donors could not make deductible charitable contributions to a 501 (c)(5), but they could if you had a separate 501 (c)(3).

If you decided to establish two separate entities, the IRS would allow you to have the same Board of Directors for both entities. However, for accounting purposes, if you had the same Board of Directors, you might have to issue combined financial statements including both entities together."

That last statement means that for our members we should issue combined financial statements. This is not a problem and is entirely desirable.

Here is how all this tax stuff works. Lama organizations like the ILA with members taking charitable deduction could contribute to the C-3 part of the National Trust Fund. Individuals and estates wishing to take a charitable deduction, as well, could donate here. Those funds could then be passed along to medical research, as needed. Care needs to be taken to insure that those moneys don't end up on the Government Relations side.

Contribution from 501-C5 organizations like the ILR or RMLA may go to either the C-3 or C-5 parts of the National Lama Trust Fund. The C-5 Trust can contribute to either medical or governmental relations.

A third type of corporation to consider is a C-6. It is more like a C-5 and was created for agricultural organizations, but it is slightly more restrictive. At this time we don't know which would be best and we will be working with Mayer Hoffman McCann to make the final determination.

There remains one more important question to be answered. How much will this cost in overhead? What is the point of creating this organization to collect moneys for research if it all goes to office overhead?

We contacted Hobert Office Services of Estes Park, Colorado to get an estimate of our office expenses. AOBA contracts with the Hoberts for all their office needs. This is called contract labor, and is a nearly identical arrangement that ALSA has for their highly effective and I might add cute General Manager now manning the overheads. The Hoberts manage several other non-lama organizations ranging from home owners associations to clubs. I think their expertise with Alpacas makes them a natural for what we are doing.

Management services for the Association

  • Rent, utilities and general overhead.
  • Office equipment
  • Office supplies
  • Maintain data bases for Membership
  • Do monthly bookkeeping including checking account.
  • Maintain a mailing address.
  • Provide accountant with annual financial data.

For the above services: $175.00 per month = $2,100.00 per year. Hoberts shall be reimbursed for out-of-pocket expenses: telephone, printing, postage, copies, mailing services.

This comes to $175.00 per month retainer for all those services. This figure is low because we only pay for the services we need. There is no rent, payroll or office equipment to buy. Should we need more services sometime in the future, they are always available.

Plugging those numbers into our proposed budget we come up with.......

So what do you get for $5,000? You get the beginnings of true unification. You get support for Lama medical research and governmental relations at the ILA. For the first time ever the ILR and ALSA are contributing along with the rest of the lama community in a unified and fair manner. We have met the challenge passed to us from the Lama Strategic Planning Group and the Unification Working Group. Their goals and our accomplishments are:

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