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Agency Endowments
Although the majority of the Princeton Area Community Foundation's charitable funds are created by individuals and families, many have been established by New Jersey nonprofit organizations as endowments to support future programs and operations. These funds are invested and tracked by the Community Foundation, and a percentage of the fund is distributed back to the agency. The Community Foundation currently manages agency funds for various organizations, including the United Way of Greater Mercer County, The Trenton Area Soup Kitchen, Princeton Pro Musica and the Friends of the New Jersey State Museum.
Here are some of the benefits of establishing your agency fund with the Community Foundation:
Professional and Diversified Investment Management
When you place your agency fund with the Community Foundation it becomes a part of our pool of funds. Investing as part of this pool, which is valued at over $54 million, diversifies your agency fund across many more asset classes than would be possible investing it individually. The Community Foundation’s investment pool is managed using a diversified strategy and is invested on a "total return" basis (combining capital appreciation and earned income), with a variety of asset classes used to lower volatility. Within each asset class, the Community Foundation retains highly skilled investment managers who specialize in that particular asset class. To ensure that the Community Foundation's portfolio is managed effectively, our investment committee, led by Community Foundation Trustee Andy Golden, oversees the investment pool’s manager selection, best strategies and appropriate benchmarks, and closely monitors the performance, asset allocation, and style adherence of each of the fund managers. For more information on the Community Foundation’s investments, please refer to our Investment Objectives page.
Princeton Area Community Foundation Fund Management Services
The Community Foundation provides several
services to agency fundholders. Basic administrative services include
accounting and record keeping, including quarterly reports, and
automatic grant distributions to your organization. We can also manage
various types of gifts to the fund, including appreciated securities,
real estate, closely-held stock, insurance policies, tangible personal
property, and bequests. Planned Giving and Endowment Fundraising Support
Our staff is available to meet with your agency staff, board
members, and donors. We have a planned giving specialist on staff who
can speak to your donors about planned gifts, and other vehicles to
benefit your agency fund. Increased Donor Confidence
Having a fund with
the Community Foundation
affiliates your agency with a respected nationally
certified public charity with deep roots in the community and total
assets of over $55
million. This affiliation can be especially helpful if the agency is new
to major gift fundraising, planned giving, or wishes to attract new
donors. Your
Community Foundation fund can also provide increased exposure to potential
donors and the general public, through listings in our publications,
press releases, web page, and participation in
Community Foundation events. Automatic Calculation of Annual Spending from the Fund
The Community Foundation distributes a portion from agency funds according to a
pre-determined spending formula customized for each fund’s individual
agreement. To determine the annual distribution amount for your fund,
the Community Foundation calculates the average value of the fund over the past 8 quarters,
and makes this pre-determined percentage available to your organization;
payments of this distribution can be issued annually, semi-annually or
quarterly. Alternatively, agencies may choose to reinvest its annual
payout in the fund at any time. Built-in Fund Protection
Community Foundation ownership of the assets in the fund* helps provide a layer of separation to ensure the fund is maintained in perpetuity. This separation can provide a “buffer of protection” from excessively spending your endowment to meet short-term needs, which can erode donor confidence, violate donor intent, and jeopardize the long-term health of your agency. Putting the assets with the Community Foundation can also insulate them from liability and litigation.
*While at the Community Foundation, the assets become the property of the Community Foundation – as required by IRS regulations. Ultimate control of investments and disbursement is given to the Community Foundation's board while the fund's are held by the Community Foundation. The agency may request that the funds be returned under certain conditions, by a resolution of its board and concurrence by the Community Foundation board, as outlined in your individual fund agreement.
Variance Power
In the event that your
agency ceases to exist, loses its nonprofit status, or the original
purpose of the fund becomes irrelevant,
the Community Foundation board maintains
“variance power” to change the beneficiary or purpose of the fund
to maintain donor intent. Your
agency may also designate a “contingency” beneficiary in the fund
agreement. Variance power helps assure donors their gifts will remain
relevant in perpetuity. Fees
Each fund is assessed its pro-rata share of investment expenses. Fees impact the net asset value of the fund and are not charged separately. The annual investment fee for agency funds averages 0.60% of the fund value. An annual administrative fee of 0.75% is assessed to help cover costs associated with managing the fund, for a total annual fee of about 1.35%.
Click here for a copy of the Community Foundation's Donor Handbook and Fund Policies. To learn more or to schedule a presentation to you your board by a Community Foundation staff member, please contact Ralph Serpe at 609-219-1800.
Princeton Area Community
Foundation Nancy W. Kieling, President and Executive Director |
