BAPTIST TOWERS FOUNDATION, INC

ABOUT BAPTIST FOUNDATION

Mission and Purpose

     The purpose of the Foundation is to provide financial support to The Towers of Jacksonville, Inc.

to enhance the collective quality of life of the residents of The Towers of Jacksonville.

The bylaws of the Foundation authorize the board of directors to make contributions to The

Towers of Jacksonville, Inc. for the following purposes:

1. For capital improvements to buildings and grounds of The Towers;

2. For the welfare of residents of The Towers; and

3. For such other purposes as the Foundation board of directors may from time to time

determine which serve the best interests of The Towers.

History of the Foundation

     The impetus for the creation of the Foundation was the sale of a real estate parcel that had

been donated to The Towers of Jacksonville, Inc. At that time, The Towers of Jacksonville, Inc.

was regulated by the U.S. Department of Housing and Urban Development because it owned

and managed The Towers of Jacksonville, a multi-family residential community for senior

citizens of low to moderate income which offered subsidized rents.

     When agreement was reached to sell the donated real estate to the Ronald McDonald House,

the board of directors for The Towers of Jacksonville, Inc. voted to form a foundation to receive

the proceeds to prevent the possibility that HUD would declare them to be “excess funds” of

The Towers. The HUD regulatory framework does not allow for accumulation of non-operating

cash by the owners of subsidized housing communities. Had HUD determined that The Towers

had “excess funds,” rent increases would have been prohibited until the excess funds were

consumed through normal operations. The board foresaw a material risk that the proceeds

from the land sale would be dissipated if retained as an asset of The Towers of Jacksonville, Inc.

     When the Foundation was chartered, cash in the amount of $223,252.66 was transferred from

The Towers of Jacksonville, Inc. This sum represented the proceeds from the sale of the land

plus all accumulated investment earnings on those proceeds up to that time of transfer.

Expenditures by the Foundation Since its Formation

     In keeping with our mission, the Foundation has funded numerous initiatives by the Towers of

Jacksonville, Inc. to benefit The Towers and the quality of life of its residents. This is

accomplished through an annual contribution by the Foundation to Towers of Jacksonville, Inc.

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Assets and Income of the Foundation

     The assets of the Foundation consist of a modest amount of operating cash plus an investment

portfolio composed of equity and fixed-income mutual funds and exchange traded funds.

Investments are made in accordance with a sophisticated investment policy adopted by the

Foundation board of directors. The investment objective is to generate an average annual

compound rate of return of 7.5 percent over full market cycles.

     As The Towers of Jacksonville, Inc. receives future installments of developer fee from the

renovation and refinance of The Towers, these will be added to the Foundation’s investment

portfolio. In total, future developer fee payments are projected to exceed $1 million.

Governance of Foundation

     The Foundation is governed by a nine-person board of directors who are elected by the board

of directors for The Towers of Jacksonville, Inc. Board members serve three-year staggered

terms of office and may be re-elected without limitation on the number of consecutive terms

served.

     Officers are elected by the Foundation board of directors and consist of a president, vice

president, secretary, and treasurer.

     Additionally, the work of the board is carried out by three standing committees: the Investment

Committee, the Audit Committee, and the Nominating Committee.

The board of directors meets quarterly.

Baptist Towers Foundation, Inc.

Post Office Box 56098

Jacksonville, Florida 32241

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foundation@thetowersofjacksonville.com

GOVERNANCE