Peoria State Journal Register

October 16, 2004

New members named to Bielfeldt Foundation
Change comes after AG's office confirmed it was reviewing board's financial dealings

of Copley News Service

WASHINGTON, D.C. - The Bielfeldt family has relinquished its majority control of the troubled Bielfeldt Foundation by bringing in four well-known community leaders to replace four family members on the board of directors.

The Illinois Attorney General's office confirmed in July it was scrutinizing the financial dealings of the foundation, whose assets have plummeted in recent years.

The inquiry began after a Copley News Service analysis of the foundation's tax records revealed that an unusually large portion of the foundation's money in recent years had gone to the Bielfeldts themselves primarily through investment management fees for family members.

Carlotta Bielfeldt, one of the foundation's founders, remains on the board, but relinquishes her title of president.

The newly reconfigured board agreed this week that Carlotta Bielfeldt would stay on as executive director of the family foundation and approved an undisclosed salary for her, new board president Douglas S. Stewart said Friday.

Stewart declined to specify the amount, which must be disclosed publicly in the foundation's required federal tax form for 2004, to be filed next year.

Stewart, 53, regional vice president of National City Bank, said Carlotta Bielfeldt gets a salary as of Oct. 1 that is smaller than the $110,000 annual salary she received in 2003. Her new, lower salary was based on an average for foundations of a similar size.

Gary Bielfeldt, her husband and co-founder of the foundation, had said in July that his wife no longer would accept a salary and that he and their son would forgo substantial investment management fees they had been receiving from the family's tax-exempt foundation.

The other new board members are Gary M. Anna, vice president for business affairs for Bradley University and a certified public accountant, William Barrick, retired managing partner of the KPMG accounting firm in Peoria and Decatur, and Jane B. Converse, founder and president of Converse Marketing Inc., a Peoria advertising and marketing communication firm.

All four of the new board members have extensive experience in serving on nonprofit and civic boards.

Stewart currently serves on the board of Lakeview Museum, among others, and on the Bradley University Board of Trustees.

Anna serves on the board of Fayette Companies, a human service organization, the Community Advisory Board for OSF St. Francis Medical Center and serves as a trustee for The Preferred Group of Mutual Funds.

Barrick serves on several boards including Excel Foundry and the Economic Development Council of Central Illinois.

Converse is serving or has served on boards for the American Red Cross, the Community Foundation of Central Illinois and the Heart of Illinois United Way.

They replace four Bielfeldt family members: Gary Bielfeldt and his three adult children, David, Linda Greene and Karen Bielfeldt-Wales.

Also Thursday, the new board instructed Carlotta Bielfeldt and Converse to review and establish guidelines for picking beneficiaries for foundation grants. They will recommend grant recipients to the board, which will have the final say.

The board also instructed Stewart, Anna and Barrick to develop a new investment policy for the foundation. The board plans to have a new investment manager in place for 2005, Stewart said.

"We really do feel that this now is an independent foundation and each of us are on the board because of the respect that we have for Gary and Carlotta Bielfeldt and what they have done for this community in the past," Stewart said.

Since its creation 19 years ago, the Bielfeldt Foundation has given $26.2 million to central Illinois charities, universities and churches, according to its tax returns.

During that time, the Bielfeldt family has been paid $21.6 million by the foundation, primarily for investment management, according to the foundation's tax forms. The foundation's assets have plummeted from a peak of $50.5 million in 1995 to $13.3 million in 2003 as a result of risky investment practices.

The foundation's assets remain at $13 million, Stewart said.

The amount and number of future grants undoubtedly will be reduced as a result of the rapid shrinkage of the foundation's assets and a $5 million commitment the foundation made to the expansion of the Glen Oak Zoo.

Last year, the foundation paid $500,000 to the Peoria Zoological Society as part of that commitment, accounting for most of the $686,736 that the foundation awarded to area charities in 2003. The foundation still is committed to making annual payments of $500,000 for the next eight years for the zoo expansion, Stewart said.

A multimillion dollar commitment to Bradley University has ended, Stewart said.

"We're putting into place policies so that we can continue to be a contributing member to the Peoria area. Hopefully with some investment performance that is positive along with the runoff of some of the obligations that we currently have that we are going to make meaningful contributions going forward," Stewart said.