Frequently Asked Questions
How are these funds treated on the books of this organization?
Assets transferred to the Community Foundation for an Organization Fund continue to be carried as assets on the books of the nonprofit that is the beneficiary of the fund. The Community Foundation carries those assets with an offsetting liability on its books. (FASB 136)
What are the costs of an Organization Fund?
There is an annual administrative fee of 1% of the market value of the assets in the fund, that declines incrementally on balances greater than $1 million.
How is the amount of the annual distribution to our organization determined?
The amount of the annual distribution from Community Foundation funds is described by the term “spending policy.” Spending policy is a fixed percentage of fund assets that provides for the charitable purposes of each fund while protecting the portfolio’s value from the effects of inflation. Currently, the annual spending policy is 5.25% of the market value of the fund averaged over the previous 20 quarters. The administrative fee (described above) is deducted from this amount and the balance is distributed to your organization.
What happens if my organization needs more than the spending policy distribution?
When you create an Organization Fund, your organization will choose what is permitted for your organization. The Agreement can provide for circumstances that permit your organization to request the Community Foundation Board to approve a distribution greater than spending policy, to approve the full transfer of the fund, or your organization can decide to protect the historic dollar value of the fund.
What happens if my organization decides to reinvest the spending policy distribution?
Your organization’s distributions can automatically be reinvested into principal based on your instruction.
How do I learn more?
We invite you to get in touch with us at any time by contacting Betsy Constantine at 716-852-2857.