INVESTMENT CUSTODIAN RELATIONSHIP

On November 16, 1998 the Investment Committee approved seeking proposals from other investment custodians to provide custodial services to the Foundation.

In this connection, proposals were requested from the following custodian banks:

Firstar Trust Company

Chase Manhattan Bank

Harris Bank

Mellon Bank

Northern Trust Company

State Street Corporation

A copy of the proposal request is included as a separate booklet.

Proposals were received from five of the six custodian banks. Harris Bank did not respond because they adopted a new strategy to focus their business on smaller personal and institutional trust customers.

The process has been very educational with the following two conclusions:

1.	The Foundation should change custodians. The two custodian arrangement for the domestic and international security portfolios is administratively inefficient and potentially more costly. Firstar Bank has not kept pace with the industry relative to reporting and performance, system technology, online access capability and security lending activity.

2.	Northern Trust Company and Mellon Bank have been identified as the two preferred candidates. They both are very competent and either one could serve the Foundation well. There capabilities are so comparable that at this point a specific recommendation is pending. Additional discussion and review will be completed between now and the meeting and a specific recommendation will be made at the meeting.

Comments regarding the custodian banks not selected:

Firstar Trust Company

See comments above. The Foundation has outgrown the capabilities of Firstar. Firstar has not adequately served the Foundation in such new initiatives of alternative investments, security lending, granting appreciated stock and on-line data access. Their data information system is outdated and not user friendly.

According to Firstar personnel, in June, 1999 the present system will be converted to the Star Banc trust accounting system. Based on discussions regarding the system, the effort is too little too late.

The Firstar proposal does include a fee reduction of up to 25% for certain transaction and account fees. At this point, the fee reduction does not compensate for the potential problems associated with the conversion and the lack of comparable services and technology offered by the other custodian banks.

Chase Manhattan

Chase has been a disappointment. Their proposal effort lacked enthusiasm and interest in serving the Foundation and did not completely address the items requested in the proposal. Their current service level to the Foundation is adequate at best. They gave the impression they cater more to the larger dollar trust accounts.

State Street Corporation

A very good organization except for one thing. The Foundation's portfolio is not large enough to meet their minimum threshold amount for participation in their security lending program. Given this could mean over a $100,000 annual loss in revenue to the Foundation, State Street was dropped from consideration.

The Foundation has identified the following criteria that an investment custodian should be able to provide:

Northern	Mellon

Trust	Bank

1.	A custodian that has the capability to process both domestic

and international securities.	Yes	Yes

2.	Reporting system that will provide financial and investment

information for the annual 990- PF tax return.	Yes	Yes

3.	Experience with processing and reporting alternative investment

transactions.	Yes	Yes

4.	Readily accessible and user friendly comparative performance

data and benchmark information.	Yes	Yes

5.	On line capability to permit customer access to custodian

data base.	Yes	Yes

6.	Security lending program that will maximize the revenue from

the Foundation's available lendable securities.	Yes	Yes

7.	Risk management and investment objective monitoring programs.	Yes	Yes

8.	Timely preparation and issuance of monthly investment reports.	Yes	Yes

9.	Enhanced cash management program of pooled investment manager

cash funds.	Yes	Yes

10.	Investment reports that are flexible and adaptable to the

reporting needs and account classifications required by the

Foundation.	Yes	Yes

11.	Provide references that are supportive of services provided.	Yes	Yes

The attached information is provided for your review.

Item	Page

1.	Summary Table of Top 10 Custody Banks	4

2.	Comparative Characteristics between Northern

Trust and Mellon Bank	5

Any information or experience that the Investment Committee has regarding Northern Trust or Mellon Bank would be helpful.