Parker Ranch Foundation
trust changes governance

The Hawaii Probate Court on Aug. 9 approved changes in the governance structure of the Parker Ranch Foundation Trust. The trust was created in 1992 by the late Richard Smart. It has assets exceeding $30 million and is the sole shareholder of Parker Ranch, Inc. The ranch, one of the largest in the U.S., was founded in 1847 and surrounds the town of Kamuela on the Big Island.

The trustees – Warren Haruki, Timothy Johns and John Ray – received approval to reform the trust's governance to qualify for a new federal tax status, known as a Type I supporting organization. “Conversion to Type I supporting organization status – from the Trust’s current Type III status – was requested in response to recently-enacted federal legislation containing tax law changes related to charitable reform,” The trustees said in a Aug. 10 statement.

“Because the legislation subjects Type III supporting organizations, but not Type I’s, to additional operating restrictions and requirements,” the statement said, “conversion enables the Trustees to move forward with careful and planned asset management to optimize ongoing support to the Beneficiaries over the long term, which was Richard Smart’s primary purpose in creating the Parker Ranch Foundation Trust.”

The current trustees will resign once between 3 and 5 successor trustees have been selected by the Beneficiaries. Current Trustees may be considered for reappointment. The trust planned to advertise between Aug. 19 and 26, for qualified individuals to apply to a beneficiary-appointed selection committee.

The trust has four beneficiaries: North Hawaii Community Hospital, Parker School Trust Corporation, Hawaii Preparatory Academy and the Richard Smart Fund of the Hawaii Community Foundation. Since under the new structure the trust's four beneficiaries appoint trustees, they will have more control of the trust and its financial distributions. Cumulative distributions since 1998 were more than $13 million in cash and land.