By Alex Rinfret-The fledgling Gwaii Forest fund has lost approximately $700,000 in its first year of operation because of downturns in the financial markets, Gwaii Trust administrator Errol Winter revealed this week.The fund, handed over the islands by the federal and provincial governments last year, is now worth $24.7-million, Mr. Winter said. It started off with almost $25.5-million.With markets continuing to decline, the executive and administrators of both the Gwaii Forest Society and the Gwaii Trust Society met Monday (July 14) to talk about possible courses of action."The good news is with the downturn in the markets, the two societies want to be proactive," Mr. Winter said. "We're coming up with some really creative excellent ideas."The executive will be presenting these ideas to their boards in the coming weeks and then plan to hold public meetings to share with islanders the challenges they're facing, he said.The Gwaii Forest fund was set up to operate much like the very successful Gwaii Trust fund, which has earned healthy returns since it started in 1994, has given out millions of dollars worth of grants and is now worth about $70-million.The Gwaii Trust has been somewhat affected by the markets, Mr. Winter said, but its strong growth in past years has allowed it to build up a buffer to weather the downturn. Not so for the Gwaii Forest fund, he explained, which found itself in punishing market conditions before it had time to grow.The Gwaii Forest board had to add $400,000 on Dec. 31 to the core $24-million to protect it from inflation, Mr. Winter said. That left barely anything for operations or to distribute as grants, creating an extremely challenging situation for board members and chair Irene Mills.At the Gwaii Forest Society's first-ever annual general meeting, held this past Sunday (July 13), Ms Mills explained that the board did go ahead and approve 14 projects this year, and has borrowed $800,000 from the Gwaii Trust so it can award these grants and to cover this year's administration budget. That money will have to be paid back at some point, she said.Ms Mills also explained that the Gwaii Forest fund is operated in a more complicated way than was envisioned by the islanders who lobbied Ottawa and Victoria to bring the fund under local control.When the governments eventually agreed to turn the $24-million-plus over, they put in a last-minute demand that the fund be controlled by a "trustee" rather than the nine-member board islanders had planned to set up.What this means is that the money is actually held by the Gwaii Forest Charitable Trust, which is made up of three trustees: the Gwaii Trust Society board, and two Gwaii Trust executive members, Warren Foster and Rose Russ.The Gwaii Forest Society works for the Gwaii Forest Charitable Trust. The society is made up of four directors from the Haida Nation and four from the non-Haida communities, with the chair appointed by the Council of the Haida Nation. Directors for the coming year are: Beryl Parke, Harold Yeltatzie, Ron Williams, Ed Russ, Barry Pages, Michael Muller, Travis Glasman and Wally Cheer.