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RE: Echo and how it was paid for



I don't want to debate the merits of Echo vs. Eagle donations or the
effectiveness of the BOD.  That has been to personal on this BB for a
while and probably should tone down for the sake of getting new members.

As a CPA, both sides of this funding argument have valid issues.  You
can't wait for the donations to possibly trickle into AMSAT and lose a
launch window.  Taking money out of reserves is not necessarily a bad
idea.  However, like an insurance company, when premiums don't cover
losses, the reserves are hit.  However, in a market that investments may
not do as well, the replacement of reserves can be difficult.  The
solutions for the insurance company may be to raise rates or right less
risk. Certainly, they could not pay the claims incurred, but that
defeats their purpose, just like AMSAT can sit on reserves and not
launch satellites.

In AMSAT case on replenishing reserves, more donations or if that fails,
infrequent satellite launches due to a lower reserve and lower
donations.  I think we need to appreciate that the organization will
launch, though, it may not be an AO-40 replacement and go forward to
build new capital.  The BOD cannot control the market for their
investments, but, the organizations purpose is to build and launch
satellites.  

The above is not to flame one side or the other.....just a perspective
from a financial person that happens to be a member.

73
Greg
N3MVF

-----Original Message-----
From: owner-AMSAT-BB@AMSAT.Org [mailto:owner-AMSAT-BB@AMSAT.Org] On
Behalf Of Barry
Sent: Tuesday, June 01, 2004 7:11 AM
To: Arthur H Feller
Cc: amsat-bb@AMSAT.Org
Subject: [amsat-bb] Echo and how it was paid for


On May 31, 2004, at 11:32 PM, Arthur H Feller wrote:

> Hi, Barry,
>
> Perhaps I can help here.
>
> At 06:13 AM 31-05-2004, Barry wrote:
> Didn't we also take money from the reserve to pay for Echo?  The above

> statement isn't actually correct.  The bulk of the money for ECHO was 
> taken out of the reserve and will never be replaced. Which is it? Do 
> we pay for satellites from the reserve or donations?
>
> To answer your questions.
>
> [1] ALL money in the reserves came from contributions over many years.

>  Much of the reserve funds came from Life Members' lump sum payments.

> Interest and dividends from investing the reserves pays for their 
> services and provides some other income to AMSAT whenever possible.
>
> [2] Much of the money paying for AO-Echo came from contributions 
> specifically designated for that purpose as required by law and rule.

> See audited financial statements on line for more details.
>
> [3] Your representatives on the Board of Directors thought it wise to 
> borrow some money from the reserves to see that this satellite becomes

> a reality as soon as reasonably possible.  Donations received were not

> enough to cover the entire cost.  The reserves will have to be repaid 
> to meet Life Member commitments.  (Keep those checks coming in!  Use 
> PayPal!  Call Martha!!)
>
> [4] Nothing is free except a great deal of work and in-kind donations 
> contributed by Members and friends.
>
> [5] We still need money to pay for services and commodities we cannot 
> get donated.  Money, securities, and other donations from Members and 
> friends helps enable AMSAT to deliver the services and facilities you 
> have come to expect and enjoy.
>
> Make sense?
>
> 73, art.....
>
>
>

Perhaps you might provide a break down of money from donations and 
money which was taken from the reserve and will never be replaced. In 
the two budgets I helped prepare there were two large payments out of 
the reserve towards ECHO.(100,000 dollar range)

Since the reserve is made up of stock shares and mutual funds and the 
the reserve lost value over the last few years I can't imagine there 
being much extra income coming from the reserve.

I regards to point # 5 the services AMSAT delivers are shrinking and 
"Services" exclusively for members is almost non-exsistant. Our yearly 
dues is basically paying for a monthly Journal and Martha's salary and 
the related expenses.

So most of what you said makes sense I am just not sure to who.

----
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