Letter from HQ - Bylaws and Trust Agreement

This letter was sent out from HQ last week to all Alumni Board (aka AVC) Presidents.  We publish it here without further comment. However, unlike the statement made in the body of the letter, comments and suggestions entered in response here ARE welcome.

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February, 2006


TO:     Alumni and Volunteer Corporation Presidents

FROM:     Archer L. Yeatts, III, Grand President

Re:          Bylaws & Trust Agreements


Let me begin with some history.  Sigma Phi Epsilon at the national level, including Headquarters staff, “Nationals,” has always had the undergraduate chapter and its development as its focus and, historically at least, the AVC has focused on the property and its maintenance, and keeping the house full.  It also oversaw the chapter’s finances.

AVCs were expected to execute a Transfer of Assets Agreement which provided that in the event of the loss of the charter, the AVC should hold the assets in trust for 21 years after which, if no chapter was re-established, the assets would be conveyed to the Fraternity’s Chapter Continuation Fund.

Problems developed.  Not long before I became Legal Counsel in 1979, an AVC had sold its property and thrown a big party for itself.  In more recent times, we have had AVCs sell the assets and donate the proceeds to a nursing home and to a university.  In the latter two instances, we were able to retrieve most of the assets for the chapter, but it took expensive legal action.

Sometimes, we have AVCs which are not in compliance with the basic corporate requirements of their states and, without corrective action, are thereby jeopardizing the assets.

In addition, in recent years, we have come to expect more from AVCs in terms of mentoring our chapters’ leaders in areas beyond finances.  As your chapter’s board of directors, you have taken added local responsibility to mentor and hold the chapter accountable for its performance in the areas of recruitment and member retention.  (I have appointed a Volunteers Commission which has begun its work to develop a program which will, inter alia, train our AVCs to be even better mentors.)

As a result of the foregoing, the Grand Chapter at Conclave in San Antonio, Texas, in 2003 adopted two pieces of legislation amending the Fraternity’s Bylaws.

The first created a new assets document called a Trust Agreement, which will be executed by the Fraternity and the AVC, and recorded locally in the land records.  Now, instead of the AVC holding the assets in trust for 21 years, the Fraternity or its National Housing Corporation can elect to accept transfer of a chapter’s assets, to be held in trust by that entity for the purpose of re-activating the chapter in the future.

The other legislation gives the NBD the authority to replace a local AVC that is not acting in the best interests of the undergraduate chapter or of the Fraternity.

The amended Bylaws further require that each AVC amend its bylaws to comport with the above provisions.

I want to assure you that only when the NBD determines that a local AVC is not functioning at all or is acting against the best interests of the undergraduate chapter or the Fraternity so as to jeopardize the existence of the chapter on that campus will it exercise its rights under either of these Bylaw provisions.  We are not interested in spending time and resources on real estate or finding AVC members unless absolutely forced to do so.

Suffice it to say, the response by AVCs to the Grand Chapter legislation has been underwhelming.  I enclose the Trust Agreement and the sample Bylaws.  You can revise your bylaws to reflect your local way of doing business or your state’s requirements, as long as language like Paragraph VII is included.

I ask that you return the executed Trust Agreement and a copy of your revised bylaws to Headquarters to the attention of Kathy Johnston by June 30, 2006.

There is no need to send me objections to the documents or suggestions for improvements to them, unless your executed documents are enclosed with your comments.  I have requested the Board of Trustees of the National Housing Corporation to decline to have any conversation with an AVC about financing the purchase or renovation of property until the documents are in hand at Headquarters.

I will assure you that all of this will be re-considered by the National Board of Directors prior to the 2007 Conclave in Atlanta, Georgia, if the present Bylaws are complied with, and thereupon I encourage you to share your comments and suggestions.

If my comments appear heavy-handed, I apologize.  But, just as we are a nation of laws, not of men, so is our Fraternity.  Until Conclave legislation is amended, it is my duty as Grand President to see that it is enforced.

Thank you for all you do for your undergraduate chapter and the Fraternity.  We are blessed with great volunteers.  I hope to see you at Carlsons and the Conclave.

ALY/s/1-168

Enclosure

cc:     District Governors
     National Board of Directors