the recent arrival of a steady stream of press releases announcing substantial donations to the National Association of Electrical Distributors (NAED) Education and Research Foundation piqued the curiosity of A|L editors. What prompted the donations? And why the sizable amounts? The answer is a response to changing economic developments. In light of unpredictable revenue flow and in order to provide up-to-date practice management information for its membership, NAED has implemented a two-phase plan to sustain and expand its services.
Before April 2003, the NAED Foundation focused solely on industry training. But in order to better reflect the needs of its members, the Education and Research Foundation, as it is known today, established a long-term endowment fund called the Channel Advantage Partnership (CAP). In November 2003, an initiative began to bring a steady flow of funding to the Foundation to support future education and research projects, and create financial stability. 'The NAED Foundation is the vehicle that can help us,' says Bill Elliott, current NAED chairman, 2004-05 CAP chairman, and 2003-04 Foundation chairman. 'By creating an endowment fund, we will have the resources to address issues like competing with the retail channel, redistributing product cost effectively, and increasing profits.'
Designed as a perpetual fund, the principal amount of each company's pledge will remain untouched, while the interest will be used to commission projects. Since the endowment was established, 24 distributors and 11 manufacturers have pledged a total of $6.4 million. There are four contribution levels: Governor Level ($100,000), with 23 contributors; Guarantor Level ($250,000), with eight contributors; Regent Level ($500,000), with three contributors; and Visionary Founder Level ($1 million), with one contributor. Lighting manufacturers that have contributed include Legrand North America, Thomas & Betts Corporation, Lutron, Osram Sylvania, Philips Lighting, GE Consumer & Industrial, and Hubbell. GE Commercial & Industrial vice president, Michael Petras, says of the company's contribution to the fund, 'The Foundation's research and education initiatives are critical in keeping our industry successful with new technology and ideas.'
While minimum pledges of $100,000 (for distributors) or $250,000 (for manufacturers) are required-and earn companies a permanent position on the CAP Council, which selects future educational programs and research projects-donations of lesser amounts are accepted through the Annual Contribution Campaign. While the endowment fund will eventually provide for all education and research, contributor pledges are paid over a number of years with slowly accruing interest. Until the fund becomes self-sustaining, the Annual Contribution Campaign will continue to (continued on page ) (naed endowment; continued from page )
support existing training programs.
Elliott explains the drive to take part in the CAP: 'NAED is the only trade organization that represents our business and can address the specific needs of our industry. Contributing to the fund is like putting money in the bank. The money will be there indefinitely to help us improve our industry.' This perspective will likely aid the upcoming second phase of the endowment campaign. For more information, visit www.naed.org. A|L