A meeting of the USO World Board of Governors was held in Washington, DC on September 29, 1993 at i0:00 am. General Bernard W. Rogers, USA (Ret.), Chairman of the USO World Board of Governors, acted as Chairman of the meeting. The Chairman called the meeting to order. %~ne foll~wing B~ardmembers were present representing an official q~orum of the Board:
- Named Organization
- Air Force
- American Telephone and Telegraph Company (AT&T)
- Coca-Cola Company
- Joint Chiefs of Staff
- United Way (charity)
- Named Person
- Calhoun, Jerry L.
- Christie, Ed
- Cowboy, Dallas
- Davis, Ruth M.
- Dorn, Edwin
- Dyke, Bill
- Dyke, Charles W.
- Fey, Thomas H.
- Fuqua, Don (Congressman (FL))
- Galvin, Mary B.
- Glass, Ron
- Green, Grant S., Jr.
- Grier, Charles P.
- Hagan, John
- Harrell, Wiley
- Haub, Helga
- Herres, Robert
- Herres, Robert T.
- Kelsey, Robert P., Jr.
- Kidd, Richard A.
- Lambright, Stephen K.
- Lambright, Steve
- Lloyd, Jay
- Lloyd, R. Jay
- Nitsche, Bruce G.
- Nottingham, R. Kendall
- Overstreet, Harold
- Powell, Colin L.
- Rogers, Bernard W.
- Rowden, William H.
- Ryan, Stephen M., Jr.
- Swan, Alfred W., Jr.
- Tedesco, John J.
- Tucker, William
- Turner, James E., Jr.
- Wax, Morris
- Williams, James F.
- Williams, Jim
- Wood, James E. (Stephano Brothers Inc. Gen. Manager)
TI PR Committee o
- Woods, Jim
- Zimmerman, Matthew A.
- Date Loaded
- 18 Jul 2005
Page 1: TI38922477
U~O ~OP~D ~ OF
A meeting of the USO World Board of Governors was held in
Washington, DC on September 29, 1993 at i0:00 am. General
Bernard W. Rogers, USA (Ret.), Chairman of the USO World Board of
Governors, acted as Chairman of the meeting. The Chairman called
the meeting to order. %~ne foll~wing B~ardmembers were present
representing an official q~orum of the Board:
Hon. Jerry L. Calhoun
Hon. Chapman B. Cox
John B. Damoose
Hon. Ruth M. Davis
Charles W. Dyke, LTG, USA (Pat.)
RADM J. H. Flatley, IiI, USN (Ret.)
Hon. Don FUqua
Mary B. Galvin
Hon. Grant S. Green, Jr.
Charles P. Grier
Frau Helga Haub
(Represented by Bill Vitulli)
Gen. Robert T. Herres, USAF (Ret.)
ETCM(SW) John Hagan, USN
Wilhelm C. Kast
Robert P. Kelsey, Jr.
Sgt. Maj. Richard A. Kidd, USA
Stephen K. Lambright, Esq.
(Represented by Wiley Harrell)
MCPO R. Jay Lloyd, USCG
Bruce G. Nitsche
R. K~ndall Nottingham
Sgt. Maj. H. G. Overstreet, USMC
Gen. Bernar~W. R~gers, USA (Ret.)
VADM William H. Rowden, USN (Ret.)
Stephen M. Ryan, Jr.
Mary G. Sethness
Lee J. Stiilwell
Ma~ha C. Sundquist
Alfred W. Swan, Jr.
John J. Tedesco
James E. Turner, Jr.
Rudolph A. Vignone
Gen. Carl E. V~ono, USA (Ret.)
James F. Williams
James Wood (Rep. by Bill Vitulli)
Maj. Gen. Matthew A. Zimmerman,USA
Gen. Rogers thanked Jim Williams and Coca Cola for the
previous evening buffet. He advised that the Army Chief of Staff
attended and gave remarks. P~ welcomed Board ~ers attending
for the first time: John Damoose; MCPO John Hagan, USN; MCPO Jay
Lloyd, USCG; and S~ Maj Harold Overstreet, USMC. P~ also
wel~ed W!l~ Ha~ll (representing Anhe~ser-Bus~ for Steve
Lambright), Bill Vitu111 (representing Helga Haub and Jim Woods),
Ron Glass (President, Federated Foods), ~ert Stuart and Gary
Landwirth (Give Kids The World), LTC Dave Mi;tchell (Chief, Armed
Forces Professional Entertainment Office), and Mary Sethness"
Minutes of the Board of Governors meeti~ of May 13, 1993,
havin~ been maile~ to the Boaz~ of Governors ~o weeks prior to
the meeting date, were approved as written.
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The Hon. Grant S. Green, Jr., representing Gen. Lawrence A.
Skantze, USAF (Ret.), Chairman, gave the report. It was mo~ed,
seconded and carried that the following individual be elected to
the US0 World Board of Governors, by virtue of his office and in
accordance with the By-laws.
Hon. Edwin Dorn
Assistant Secretary of Defense (Personnel and Readiness)
It was move~, seconded and carried that the foll~wing
individual be electe~ to the USO World Board of Governors as an
Gen. Colin L. Powell, USA
Chairman, Joint Chiefs of Staff
VADM William H. Rowden, USN (Ret.) reported that the
financial condition of the US0 is satisfactory with the revenues
being on budget and the expenses being below budget by
approximately $1 million. He stated that there is a surplus of
$939,000 against a budgeted fiqu~ of a loss of $195,000
indicating a total favorable variance of approximately $I.i
million. VADM Rowden mentioned that the figures presented are
for Headquarters only and did not include activities for the USO
centers worldwide. Finally, ~e projected surplus for
Headquarters will be $200,000 this year, which is below the
surplus projected at the beginning of the year.
VADM Rbwden discussed the restricted revenues. Again, the
revenues are on budget and expenses are well behind budget with
expenses being about 60% of the budget figure. He cautioned that
the expenditure figure will increase because of several
suh~l.a~ip p~ymmr#~s ~.at a~ed~e. H~wever, the ~ense figures
will be well within the budgeted figures and there will be a
surplus at the end of ~the year.
He fo~sed next on the balance sheet for the USO with total
assets being constant at approximately $15.6 million. He
remarke~ that ~ slight ~ecllne cf $1 million in liability
improved the fum~balanoes by approximately $1million.
~Bx~w~enreporte~thatthe internal audits conducted at
five USO centers this ~rterwere fottnd to be favorable aD~
within the ~ of what is expected within the organisation.
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Although there are deficiencies, they can be corrected t~hrough a
combination of headquarters and field actions.
Development & Marketin,q
Mr. R. Kendall Nottingham, C~hairman, Development & Marketing
Committee, reviewed the various types of revenue under the
purview of the Development and Marketing Department. The direct
response program, which is the solicitation of funds through
mailing is currently on budget and is expected to reach revenue
goals for year-en~. Expansion of the do~r file has been
positive ~er the last six to ni_~e mo~ths. With encouraging
results in expanding USO's donor file, management is re-
evaluating the .efforts put forth in expanding the donor files.
Expanding the list of donors is very impo~ant to the
organization ~erall because the current base file is very aged.
Without new names added to the donor file, over time the file
will decease with natural attrition.
The annual fund has achieved $ii million of the Phase I goal
of $12 million. The United Way revenue is still declining. The
Combined Pedera! Campaign raises about $10 million from overseas
activities. USO receives less than 2 percent of the total
revenue. Management has decided to increase activity through
public relations and operating centers located overseas to
increase the specificCFC designation of the donation to the USO.
Mr. Nottingham gave an overview of "Give Kids The World",
outlining the ~ose of the program. USO has sta~ed to raise
revenue to fund participation by military families with
terminally ill children in "Give Kids The World". USO hopes to
raise enough revenue to sponsor 20 to 25 familles in a one-year
Mr. Nottingham reviewed the status of the USO Christmas Gala
Celebration. Mr. Nottingham outlined the entertainment theme and
Mr. Nottingham reported that the "Always Home" brand has
been in~vel~nt for the past two to three years. Two
i~po~ant steps have occurred since May of this year. First,
after a source selection process, management has ~etermined that
Federated Foods, a Chicago age~y, will p~ide ~he expe~
assistance needed to expand a two-brand program to a private
label program. Federate~ Foods" role will be brand management,
quality assu~nue, marketi~ an~ strategic planning. Mr.
Nottingham reviewedthe payment structure of brand revenue. A
gross fee of 4% is ~ivi~ed in half allott~ 2% each to Federate~
F~ods and~SO. The ~SO's 2% is then subdivided; 5~% will c~ to
USO; 25% will be distributed to the local MWR facility wherever
the c~ssary is located; am~ th~ re~almi~g 25% will be
distributed to the local USO center nearest the c~m~issary.
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Mr. Nottingham reported on t~he "Affinity Card- for USO.
outlined the various ways of marketing the credit card.
The USO Travel Agency has been moving forward with no new
changes since the last board meeting.
USO and AT&T are conducting a program called "Countdown to
IStardom". This contest involves 22 military installations
conducting a talent search of active duty military personnel
choosing first, second and third prize winners. In addition to
this program, AT&T will continue to offer 5 entertainment t~rs.
American InterD~tional Group, Inc. will also Continue funding
• entertai~t tours.
Program &. C~uncil Relations
Charles W. Dyke, LTG, USA (Ret.), Chairman, Program and
Council Relations, provided the report.
General Dyke remarked that entertainment continues to be a
very important part of the programs offered by USO, and that the
tours are also a very important part of the USO image. He added
that several tours had recently been completed which included the
"R&B Live" tour, Char!ie Daniel's visit to the USS Theodore
~mosevelt and the USO Comedy tour. Other tours are currently
being scheduled including the Dallas Cowboy Cheerleaders who will
travel to the Pacific in early December 1993.
General Dyke added that US0 is trying to reduce the
entertai.nment subsidy provided by USO World Headquarters. The
goal is to become completely funded by corporate sponsorship.
This issue was addressed in th.e US0 Five Year Plan. U$O's
ultimate objective'is to provide maximum service to the troops at
The "USO/AT&T Countdown to Stardom" talent search is an
opportunity for servicemembers overseas to win a major label
recording session. He added that this program has been very well
received in the field.
U.S. affiliates are currently working in closer harmony with
World USO than at any time in the past. There is now a close
interaction a~ exchange of ideas. All domestic affiliate
charters are up. to date.
The Mid-Amerlca Region representatives of the Board-
Affiliate Advisory Council (BAAC) met in St. Louis on June 29,
1993. The gr~u~ ~isc~ss.e~ ways in which W~rl~ USO am~ domestic
affiliates ca~ strenqthen their ties an~exc~e i~eas.
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General Dyke then moved that the Charters of James S.
McDonmall USO, Inc., USO of the Pikes Peak Region, Inc. and USO
of Northern California, Inc. be renewed for three years. He
additio~ally ~oved that the Charters for USO of Hawaii, Inc., USO
of Puget Sound, Inc. a~nd USO of Kentucky, Inc. be renewed for one
year. Mo~ed, seconded, and carried.
USO of Delaware, Inc. will be independent as of January i,
1994. Also, the USO of Greater Ft. Lauderdale, Inc. is still in
the process of closiI~g. T~nere is one issue that is being
resolved with the Internal ~venu.e Service. Following
resolution, the corporation will dissolve.
uso of the Greater Los Angeles Area, Inc. officials and
members of the Board of Governors will meet in L~s A~ngeles in
November in an attempt to resolve several issues regarding
Charter Agreement requirements and provision of Army Grant
records to World Uso.
In overseas operations USO Frankfurt and USO Weisbaden have
merged. The new name of this operation is the USO of ~ein Main
Area. USO Fulda will close operations. As the military drawdown
in Europe continues, uSO resources will be placed where they may
best serve the community.
Headquarters programs are running well. The Budweiser/USO
Scholarship and Vinson Foundation Scholarship are being promoted
through General Dyke's letters to the Chiefs o.f the Services.
Genes1 Dyke wiil also write letters to the Public Affairs
The Desert Storm Education Funds were provided to ensure
higher education for the surviving family members of those killed
in the Desert Storm conflict. The actuarial study which was
performed to determine a schedule by which recipients would be
paid has been reviewe~. The Committee has agreed .that this
scholarship is being invested and paid in a financially sound and
General Dyke introduo~azy Lan~wirth, Dire=tot of
Operations and R~bert Stewart, Director of Devel~.pment for "Give
Kids The World". This program p~ides termimally ill ~hi!dren
with a one-we~vaaatlon to Disney World in Orlando., Florida.
USO will provide transportation for military f~lies selected
for this program. ~r. Landwirth and Mr. Stewart them gave a
brief presentation about "~Ive Kids The World".
The G~neral ~mlcs ~Ity Service A~ will be
presen÷_m~ at the ~993 ~SOChr~~ala. ~ ~I program
recognises one outstand~volumteer fr~each service branch.
Page 6: TI38922482
In the absence of Mr. Thomas H. Fey, Chairman of the H~man
Resources Committee, Mr. James E. T~rner, Jr. provided the
report. He began with discussion of the compensation and
benefits review for USO employees that is being conducted by the
Baltimore Consulting Group. The purpose of this review is to
develop a compensation program which addresses internal and
external equity for all employees in areas of performance
appraisals, succession plannin~ and incentive compensation. He
stated that the study is about 90% complete and the report will
be available by the end of October 1993 which will be in time for
the 1994 budget process.
Mr. Turner commented that the Homan ~sources Committee is
pleased with the quality of the survey and that USO Headquarters.
Man~ge~ent will gain significant benefits in other areas relating
to organizational str~cture and improved operations. He stated
that from the information given, USO is doing reasonably well in
the upper and lower levels. There are, however, adjustments
reco~mmended in the mid-range that the committee believes will fit
well within the planned budget for 1994. When the Headquarters
review is completed, attention will be given to ~he international
USOs and those reports will be completed by early April 1994.
Mr. Turner also focused on the World Leadership Conference
to be held at Andrews Air Force Base, October 17-20. The purpose
of this conference will be to discuss strategies to i~lement ~he
uso Five Year Plan and to develop a new partnership between
Headquarters and affiliates.
In closing, Mr. Turner remarked that normal operations of
the Human Resources function are being handled in a timely and
professional manner. The focus at present is on health care
changes and using all available resources to ensure the best
possible coverage for USO emp!~yees.
Ladies and Gentlemen, it's a great time to be a part of the
USO. I hope that you were as inspired by some of the things
you've seen and heard today as I am. I have several thank-yous
before giviD~ my formal report.
First, I want to ~ all of you for coming. Those of us
that are on ~ ~n~gemer~t aRd s~aff of Hea~aarters w~rkvery
herd an~wehave~c~etent~llea~ues at Headquarters, b~t a
lot of the time we ~t s~ wra~ ~ each tr~e ~ that
s~et~ we lose ~%rpersp~ctive o~ the forest. YOU really help
%is re~im that pe~ive and I want to ~k~verymuch for
Page 7: TI38922483
c~min~ ~d spe~nding your time and your own financial resources to
get here and to stay for the two days. You really do help us
keep our perspective. You give us outstanding, highly
professional advice, and for your financial and personal support
we are very grateful.
I want to thank especially Mary Sethness who made a
tremendous effort to be here today. As many of you k~ow she is
q~ite ill and ~s been for some months. She got out of the
hospital to come here. Her husband just passed away a coterie of
we~_ks ago. i think it was a very gallant thing for her and I'd
like the record to reflect that we all appreciate the effort she
Next, I would like to thank our USO Head~arters staff for
their preparation for this meeting. It's been a great meeting,
and I want to thank them.
Then I personally want to thank both the Board and our staff
around the world for the great privilege of serviD~ as your
president. Being a representative of the USO is a very
heartwarming part of my job - there are a lot of challenges, a
lot of hard work, and a lot of reasons to be discouraged, but
many reasons to be proud and thankful for this job you all have
I want to share a little bit of that with you today if I
can. I w~Id like to focus on 3 of my experiences as your
president sln~e the l&st board meeting, all relating to the great
USO tradition in which we all participate.
First is one that relates to. the past. This happer~d at a
social event which I attended just last week. A retired
businessman came up to me and said: "Mr. Cox, I knew you were
going to be at this event, so I brought you something." Then he
pulled out of his pocket a 1951 black and white photograph, very
fa~ed, of the USO in Oklnawa. He said that the Uso really
touched his life in 19Sl, that he saw this picture recently in a
photo album and re~mbered the times when he experienced
io~eli~s and iso1~ti~n ~ ~ the U~ helped bring him
~o~_ragement. He fe!~heneeded to reach out tO USO. Although
he doesn't have very many resources now, he wanted USO to have
The second experience relates to the pzememt. I recently
had the prlvile~e of interpreting ~ flve-year plan to o~_r field
operations in northe~ Eu_~0p.e. I came away from thatmeeting
~ed~ the pEofessi~alis~, ~~ication, ~q~har~work
of o~_r ~reer staff ~le L~ the field. ~work har~, ~
make do with llttle res~es, an~ they really do bring a home
-away from h~me to ~-r men am~ w~me~ w~o are o~rt there on the
front 1Lnes. All the way from the f~targenerals in~
Page 8: TI38922484
theater ~ hea~ers, down to y~ ~listed people who
are on their ver~ first o~erseas tour, people Would ~ up to am
a~d say: "~r. Cox, thank yo~ for the work that this director or
that volunteer or this staff person is doing overseas. -
One of these stars is here with us today. From USO Israel,
Gilla Gerzon received the Navy ~endatlon Medal fro~ the
Secretary of the Navy for her work ~in~ De~ Stor~, and was
also one of ~ first to volunteer to go to So~alia during
The th~r~ hea~wt~a~mi~ experle~ that I'd li~ ~o ~are
it on ~. ~ ~~ ~at~. N~ ~ly are ~ p~d~ role
mo~is for ~ ~ii~ pe~el to ~ in~l~ ~n c~ity
se~Ice (that's ~at ~e ~SO/~D =~Ity se~i~ awa~m a~ all
about). We're a~ pa~ ~is tr~ti~ ~ t~ ~ ~~
generation of p~ivate citizens. In ~e ~e ~edom's Po~datlon
in Va11~ F~ p~e~ted ~e USO wi~ ~elr a~al P~iln Awa~
for Outstan~Im~ ~ri~i~ms to ~e highest vales of our
I had the privilege of accepting that awa~ and participate
on the second day of the =elebratlon in a sy~poslu~ with high
school honor students about the great values of our daocrat~
system. This sy~posiu~ last~ for 3 hours at which we were asked
questions first hy a commentator and than by the students
themselves. The panel consisted of the ~ee !993 award winners:
Ger~ral Noz1nan SchwaEs~pf, R~er Millikln, and mys~f.
I'd like to skow you how we are passing this tradition of
s~i~e on. Here dee s~e exce~s of the video re¢o~ of ~o
I showed you the tape to indicate one of the ways that we
are trying to pass on ~Is USO ~Eadlt!on of s~v~e. B~t I also
showed it to co, lend all of you f~
high value of ~ d~Eatl= s~i~y, n~ly, for adopting a
cause, getting invo!v~ £n It, ~d s~~£~ i~ wi~ all of yo~
ve~ gra~ful to y~ f~ ~a~ ~d I
There were no i~ fro~ the Executive C~aittee that
require acti~ by the
For th~ last ~ F~ar~, ~ ~ ~ ~ i~ ~ ~
difficult ne~latl~ a~d !iti~atim ~ thr-~at~n~l the ~
Page 9: TI38922485
existence of our office space. Just this week "we resolved the
last te~hnical dispute related to our previous agreement in
principle to settle these problems. We expect to close the
settle~nt next week and dismiss the law suit. The settlement is
on very favorable conditions.
The new owner of the building (who foreclosed on our
previous landlord), in return for our withdrawing our condomini~um
claim, ~ms agreed to pay us $15,725 a month for 15 years whic~ is
an income stream of about $2.8 million. We have c~itted to the
Executive Committee to deposit those funds in a reserve account
wh~ it will draw interest over the 15 years. By the end of the
income stream, we expect to have at least $4 million in that fund
to give us permanent office facilities for the future. We are
very proud and happy with this settlement.
Next week I will receive the escrow deposit which secures
payment of the landlord's obligation.
General Rogers commended Mr. Cox.
Ladies and gentlemen, I am pleased to be able to give you
the most positive report since becoming your President three and
a half years ago. We have met some very difficult challenges and
there are more to face, but the future looks very bright for USO.
There are many reasons for this, but i'd llke to tick off i0 of
them for you this morning.
i. For the first time in my 7 years with USO as president
and board member, ~ur third quarter financial condition is not
only substantially ahead of budget, but also shows a significant
s~lus. We are also maintaining our capital reserves at the
desired level. We have over $3 million in capital reserves and
over $6 million in total reserves.
2. Thanks to the hard work of Ed Christie and his staff, we
regularly receive monthly financial statements within 15 days of
m~th-~d whi.ch~a~ly Eef!eut n~t only the p~.~eof
~a~ers, ~t also a~urately refl~t the p~u~ ~f ~r ~vers~s
operations. ~ now ~ve t~ ~i~y and ~u~a~e
is so vital ~ maintaining financial c~t~! ~d s~ility.
3. Thanks to the tremendous contribution of Bill Dyke's
Joint Planni~ Committee, we h,~ve an ambitious ~ s~und five-
~r plan which p~ides direction and expanded s~ice within a
sta~le fiman~ial framework. We have spem~ the last four~
inte_rpreting that plan to, an~ ~_~eiv~ in-p~t from, ~ st~aff
~"~ volunteers in the field, as we!! as ~mi!itary leadership.
Page 10: TI38922486
~aintaini~g USO's great tradition of service into the next
4. As I just reported infor~ally, after two years of
acrimony and adversity including troublesome litigatlon, we have
negotiated a favorable settlement of our interest in the
5. The first l~hase of our major gift campaign is nearing
success. We have ~ralsed nearly $11 million of o~r $12 ~llion
goal fcr~ flrstphase and expect to go overt he top in 1994
~u~erthe leadership of ~~ Chai~, No, AuguStine, of
6. The marketing of USO's Always Ho~e brand is in a
crltical develop~aent stage which looks very promising and we
expect it to succeed.
7. We have the best team of professional staff in the
field operations that I have seen ~y 7 years with the
organization° My reoent trip to Europe relnforoed this uo~fidsnce
that the competence and dedication of these people will equal any
$. Our Headquarters staff also continues to i~_prove.
Despite~he morale problems caused by pay cuts and budget
reductions, these dedicated professionals have shown courage,
maintained ~thelr enthusiasm and have continued to pull to~ether.
We have l~st some, but th~se ~Anlng a~e a s~Eong tea~who are'
excited about the prospects of achieving our goals under the
9. We are buildlng stro~er partnerships with our MWR
operations in the local co~ms~ds, also with MWR on a Head~arters
level through the DOD/MWRJo!n~ Steering Group. We are also
growing stronger partnerships with our US affiliates than I have
10. And finally, our entertainment and service delivery
P~fi~ ~ ha~ use ~ncl~ In ~e~ .~~cy pl~ f~
So as I nentioned at the ~i~i~ of my rena~ks, I believe
we a~e in the most positive p~siti~ in my experi~ with ~SO.