Saturday, January 30, 2010

A Matter of Interest

Gahagan Preserve has a house (we call it the cabin) and a big yard. It's like anyone else’s household. It takes money to run. (There is one exception: everyone gets to use it!)
Like any household, we need to manage a budget. Marguerite left some money to keep it operational and the volunteers who manage the preserve used conservative, interest accounts like CD’s to grow the assets and produce some revenue. Using these conservative instruments was fortunate during last year’s market collapse. The money was safe. We did not lose money like most individuals and institutions did during the downturn. Yet it sure has had an effect.
We now face a different dilemma. There is no interest out there any more! CD rates are either low or lower. Activities like our school education programs, community events and general operations relied partially on interest income from our endowment assets. Interest rates are not expected to rise for some time and we cannot afford to draw down the reserve in order to do the same level of effort. We have had to make some changes.
We spent much time last year analyzing our investment structure to look longer term. We are in the process of analyzing the school environmental education programs to reduce cost, if possible. We likely will delay improvements around the preserve and reduce operating times to save money. Lastly, we need to raise funds through a variety of means. (Sure, donations of time or money are welcome!)
It all is a matter of interest.

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