News Releases
Friday, June 29, 2007
SMART’S VISION CONTINUES WITH NEW PARKER RANCH FOUNDATION TRUST GOVERNANCE STRUCTURE
OVER $13 MILLION DISTRIBUTED SINCE 1998
The Trustees and the Beneficiaries of the Parker Ranch Foundation Trust have taken action to change the governance structure of the Trust in order to best continue Richard Smart’s charitable support for education and health care in the Waimea community.
The Trustees, with the full support of the Trust’s four Beneficiaries – North Hawai‘i Community Hospital, Parker School Trust Corporation, Hawai‘i Preparatory Academy and the Richard Smart Fund of the Hawai‘i Community Foundation – have petitioned the Hawai‘i Probate Court for approval to reform the Trust’s governance structure in order to qualify for a new federal tax status, known as a Type I supporting organization.
If approved, the new structure will allow for more input and control by the Beneficiaries; it will provide more flexibility for the Trust’s annual distributions; and it will allow the Trust to continue to make meaningful distributions to the four beneficiary groups.
Conversion to Type I status – from the Trust’s current Type III status – is in response to recently-enacted federal legislation containing tax law changes related to charitable reform. Because the legislation subjects Type III supporting organizations, but not Type I’s, to additional operating restrictions and requirements , conversion will enable the Trustees to move forward with careful and planned asset management to optimize ongoing support to the Beneficiaries over the long term, which was Richard Smart’s primary purpose in creating the Parker Ranch Foundation Trust .
The Trust’s four beneficiary organizations each played a key role in the decision to convert to Type I supporting organization status and each Beneficiary’s governing board has endorsed the conversion. Working cooperatively, the Parker Ranch Trustees and the Beneficiaries undertook a comprehensive analysis of the Trust’s asset base and determined that the change to a Type I supporting organization status better facilitated near and long term planning.
Under the new structure, Parker Ranch Trustees will be better able to support the specific short-term and long-term needs and desires of the four Beneficiaries, and thereby the Waimea community as a whole. As part of the conversion to Type I status, the beneficiary organizations will appoint successor Trustees, and the current trustees will resign upon selection of new trustees by the Beneficiaries.
The Beneficiaries are currently working to develop a process for selecting and appointing Trustees and they will release more information regarding the selection process after the Court has ruled on the requested Trust amendments.
“We support the Trustees’ efforts and willingness to make such a key organizational change, which calls for more involvement from Beneficiaries and provides Beneficiary support in perpetuity,” stated Beneficiary Distribution Committee Chair Pat Bergin. “For all of us, sustaining Richard Smart’s legacy and ensuring longevity of his incredible gift to the Waimea community is and always will be the ultimate goal.”
“The Trustees believe that the conversion to a Type I supporting organization will enable the Trust to effectively fulfill the needs of our Beneficiaries and the Waimea community. The Beneficiaries will become even more engaged within the new structure, while also allowing the Trust to implement diversification strategies that will increase Trust assets in the long term, while preserving the character of the Waimea community,” stated Trustee Warren Haruki.
The Parker Ranch Trustees determined that this reformation is the best way to continue carrying out the vision of Richard Smart, the last owner of Parker Ranch. The Petition for Reformation of Trust was filed with the Third Circuit Court in Hilo.
The Parker Ranch Foundation Trust was created in 1992 by Richard Smart, a sixth generation descendant of John Palmer Parker, founder of Parker Ranch. The Trust was formed exclusively for health care, education, and charitable purposes within the Waimea community. Cumulative distributions to the four designated beneficiary organizations have totaled more than $13 million in cash and land since distributions began in 1998. Current Trustees are Warren H. Haruki, Timothy E. Johns and John B. Ray.
The Trust is the sole shareholder of Parker Ranch, one of the largest and most historic ranches in the United States, spanning approximately 150,000 acres across Hawai‘i’s Big Island. Founded in 1847, Parker Ranch surrounds the town of Waimea and spreads between the Kohala and Mauna Kea mountains. Chris J. Kanazawa serves as Parker Ranch President & CEO.
North Hawai‘i Community Hospital (NHCH) is a full service acute care hospital centrally located in Waimea. Governed by a local board of directors, this community owned non-profit hospital opened in May 1996 and primarily serves the 30,000 residents and visitors of the northern region of the Big Island. NHCH offers a full spectrum of acute care hospital services with a commitment to patient-centered care that treats the patient as a whole person—mind, body and spirit—in the context of family, culture and community. Designed as a “healing instrument,” NHCH is fast becoming a prototype for the careful integration of select complementary healing practices with high quality medical care.
Parker School Trust Corporation (PSTC) provides funding and support to Parker School, a small, independent, co-educational day school for students in grades K-12. For over 25 years, Parker School has provided students with a college-preparatory program with emphasis on personal and educational excellence. PSTC also operates Waimea Community Education, established in 1984 to provide educational programs that enhance the living experience of people of all ages in the Waimea Community. Courses offered by Waimea Community Education are as diverse and interesting as the Waimea community, ranging from professional development courses to classes for sheer fun and personal enrichment, including courses that celebrate the Hawaiian culture through language, arts and hula.
Hawai‘i Preparatory Academy (HPA) is one of the Pacific region’s leading boarding and day college-preparatory schools, featuring a remarkably low 10:1 student-to-teacher ratio and courses and activities that make use of Hawai‘i’s unique geographical and social setting. Founded in 1949, HPA is an independent coeducational school providing a full range of opportunities for students from kindergarten through grade 12. The school has two campuses in the town of Waimea: the Lower and Middle Schools are located on six acres in the heart of Hawai‘i’s ranching country, while the Upper School is located just two miles away at the foot of the Kohala Mountains.
The Hawai‘i Community Foundation (HCF) helps people make a difference by inspiring the spirit of giving and by investing in people and solutions to benefit every island community. HCF provides support and services to donors, volunteers, other nonprofit agencies, grantseekers and the community. The Richard Smart Fund was established by Richard Smart at HCF to support health care, educational and charitable purposes that improve the general welfare and quality of life for the people of Waimea. The fund is currently being used to provide grants to Waimea organizations for increasing community and organizational capacity, including a special initiative supporting Waimea Elementary School’s restructuring and change in leadership efforts.