On a positive note, it’s exciting to entertain a proposal of a $1M donation to ARRL.  Thanks to Mary Hobart and everyone who has worked on this effort to date.   The proposal deserves serious consideration and an effort to make it happen.  As Dave stated, renaming the ARRL Lab is a policy issue that should be decided by the full Board.  I appreciate President Kay’s and the A&F Committee’s desire to circulate the proposed Gift Agreement to the entire Board for review and questions prior to consideration of a motion. 

My main question and concern involves the renaming of the ARRL Laboratory to the “DX Engineering Lab at ARRL Headquarters” with that name to be used “wherever the lab is referenced” (along with the alternative term “DX Engineering Lab”) (paragraphs 4 and 12).  Thanks to Chris Imlay, the draft agreement does a good job of clearly preserving the ARRL’s control and independence of the business operations and analysis work of the ARRL lab.  But we need to also insure the appearance of impartiality.  Could that independence and appearance of impartiality be better preserved in the naming rights by distinguishing between the lab operations and the lab facility, i.e. the difference between tangible things (physical facility and equipment) as compared to the business of the lab (and the particularly sensitive role of testing and product reviews)?  I would be much more comfortable with retaining the right to continue using the name “ARRL Lab” to describe the operations and work of the lab, and use something like “ARRL’s DX Engineering Lab Facility” to describe the physical plant and equipment.  I am concerned that renaming the ARRL Lab to the DX Engineering Lab could negatively affect our lab’s reputation. 

I realize the line can be blurred between operations and facilities.  ARRL’s published named giving opportunities http://www.arrl.org/arrl-second-century-campaign (“What are the ARRL named giving opportunities?”) also include programs (LoTW, Education & Technology, Teachers Institute, and Historic Preservation).  The giving opportunities also include Chairs in various ARRL five pillars and operating areas (Advocacy, Technical Relations, Regulatory Affairs, Education and Youth Development, Public Service and Emergency Response, DX, Radiosport, and even QST Editorial Chair!).  In many of those program type areas, there will be no basis for distinguishing between operations and facilities, as I suggest with the ARRL Lab.  But that’s a topic for another day, which may soon be on the horizon if the renaming rights thing catches on!

A related concern involves the extent of the “signage” commitments in paragraph 12, which seems to contemplate ARRL agreeing to do substantial advertising for DX Engineering at conventions and Amateur Radio events.  Have we considered the effect on our marketing and advertising with third parties and balanced it against the benefit we’ll receive from the donation.

Paragraph 3 concerning funding the donation makes it clear that in the event Sergi breaches the agreement by failing to pay the entire Donation, ARRL expressly waives any claim or cause of action against Sergi, other than the right to adjust the time period of the naming rights.  I realize that collection of pledges to non-profit organizations are problematic for a number of reasons.  But here, this is essentially a gift with a condition involving what amounts to a sale or transfer of ARRL’s naming rights.  Should this be contractually enforceable, instead of a pledge? And if it is contractually enforceable, are there tax implications?  If it is not contractually enforceable, then in the event of a default in making payments on the $1M pledge, are we getting a fair return for transferring naming rights to the lab, even if we have the right to terminate the naming at the time of default?

Doug’s suggestion of a “morality” clause may be worthy of consideration, although I tend to agree with Rick Niswander that even without such a clause, I suspect the ARRL would be justified in renaming in the event of serious misconduct or breaches of moral turpitude.  However, we need to be aware that nonprofits can become embroiled in controversies where naming rights are concerned.   Some years ago, the University of Missouri named a $75 million sports arena after the daughter (and Wal-Mart heiress) of the donors of a  $25 million naming rights gift.  The daughter had graduated from USC and was later embroiled in allegations of paying a roommate to do her homework.  The donors relinquished the naming rights and the name of the sports arena was changed. I don’t recall any publicity about whether the school returned any of the gift, or what the agreement provided.  But controversies do arise.

A&F Chair Greg Widin’s explanation says that A&F believes “this agreement is as good a deal as can be negotiated.”  If this is a “take it or leave it” situation, then we may need to review it in that light.  Hopefully there is room for further negotiations to address some of the concerns which Board members may have, in an effort to conclude an agreement which protects the interests of both ARRL and the donor.

Cliff K0CA

From: arrl-odv-bounces@reflector.arrl.org [mailto:arrl-odv-bounces@reflector.arrl.org] On Behalf Of Sumner, Dave, K1ZZ
Sent: Friday, May 30, 2014 2:50 PM
To: arrl-odv
Subject: [arrl-odv:22762] CONFIDENTIAL Proposed Gift Agreeement for Re-naming of ARRL Lab

CONFIDENTIAL

ARRL Directors:

On behalf of the Administration & Finance Committee I am pleased to forward the attached Gift Agreement for your review and consideration. The Gift Agreement with Paul Sergi, NO8D, calls for a $1,000,000 donation to the ARRL in return for naming rights to the ARRL Laboratory. It has been reviewed by the attorneys for both parties.

The following explanation comes from A&F Committee Chairman Greg Widin, K0GW:

“The agreement in principle was approved by A&F, and is acceptable to HQ management as well as ARRL Laboratory personnel.  Further development of the specific wording involved Mary Hobart, Rick Niswander, Chris Imlay and me.  

“The agreement is contained in the file named ‘Sergi ARRL Gift Agreement-final-May27-14.’ The second attachment is a listing of high-level ‘deal points’ concerning the agreement, and the benefits and protections included.

“In recognition of this contribution, the agreement will re-name the ARRL Laboratory as the ‘DX Engineering Laboratory at ARRL Headquarters’ for a period of 25-30 years.  Regardless of the re-naming, the agreement provides protections for the continuing independence of ARRL Laboratory, its operations, and related editorial matters.  Please review the relevant clauses in the agreement.  The ‘deal points’ indicate the specific paragraphs in the Agreement related to maintaining the independence of the Lab.

“The A&F Committee believes that this agreement is as good a deal as can be negotiated and it is in the best interests of the ARRL.  We also believe this agreement will not only provide significant funding to support the Lab for decades, but it also will also encourage further contributions to the Second Century campaign.”

While naming opportunities have been envisioned for several years this is the first to proceed to the point of an actual agreement. The re-naming of the ARRL Lab is a policy issue that rightfully belongs before the full Board. Fulfilling the terms of the agreement require that it be completed prior to the Centennial National Convention, which is before the next in-person meeting of the Board.

Article 6 of the Articles of Association gives the Executive Committee the discretion to submit proposed resolutions to the Board for mail or electronic vote. At this time the Executive Committee has not considered the matter; only the members of the Administration and Finance Committee have had that opportunity. Because the issue ultimately will be considered by the full Board, in the interests of timeliness and efficiency President Craigie and I feel that it is appropriate to place the information concerning the agreement before the full Board now rather than engaging in a two-step process. Therefore, all Board members are invited and requested to review the attachments carefully and to pose questions to the A&F Committee and management, on the understanding that it will be the prerogative of the Executive Committee to authorize the actual vote by the Board. An appropriate resolution at that time would be along these lines:

RESOLVED, that in accordance with the recommendation of the Administration & Finance Committee and management, the ARRL Board of Directors approves renaming the ARRL Laboratory in the manner and for the time specified in the Gift Agreement between ARRL and Paul D. Sergi, NO8D.

Finally, please note that this matter is CONFIDENTIAL until such time as both parties are able to make the announcements specified in the Gift Agreement.

73,

David Sumner, K1ZZ, Chief Executive Officer and Secretary