Types of Funds
The funds listed below may either be endowed or unendowed. Endowed funds use the earnings for grant purposes, in accordance to our board approved spending policy. The donations (principal) are not invaded. Once a fund is endowed it is endowed forever and cannot be changed. Unendowed funds may use both earnings and principal for grant purposes. Use of principal must be recognized when the fund agreement is established.
All funds are subject to the board-approved policies established by the CFUP. Funds are also subject to board variance power. The variance language must be included in the fund agreement. Policies pertaining to the fund must be mentioned in the fund agreement. Copies of applicable policies should accompany the agreement.
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Unrestricted Fund
Distributions are to all aspects of community needs. The community foundation has complete discretion as to the use of proceeds and all grants made.
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Field of Interest Fund
Distributions are restricted to a charitable purpose specified by the donor (i.e.: arts and culture, education, environmental).
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Designated/Agency Fund
Distributions are restricted to the public charity named by the donor at the time the fund was created (i.e.: an endowment fund for a theatre).
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Donor Advised/Community Fund
The fund agreement on these funds must state whether they are endowed or unendowed. Use of the principal of an unendowed fund must have prior approval of the executive director of the foundation. A specific waiver of any section of the foundation's By-laws as to restriction of geographic area must be included in the fund agreement. Fund agreements must describe who will recommend grants, either donor or agent, and whether or not there will be succeeding generations of advisors following the original donor's death. Also included would be time limitations for the number of years an agent may act or a limit on generations, not to exceed two generations, for advising on the fund. Unless otherwise written, grant disbursements will be in accordance with the CFUP spending policy. The CFUP board must approve disbursement recommendations.
Language stating that the donor will not benefit from any distributions from this fund must be included in the agreement. This fund, if endowed, must adhere to the board approved spending and administrative fee policies of the CFUP. If this fund is unendowed, the then current administrative fee will be taken on the beginning fund balance and each donation thereafter. The board may waive the fee.
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Scholarship Funds
A Scholarship fund may be set up to benefit students from a certain school, specialized education (i.e.: teacher), or certain demographic (i.e.: persons returning or starting college in middle years). This fund can be tailored to meet the initial donor's criteria, as stated above. Donors may place restrictions on grant payment. Examples would be falling below a certain GPA, an incomplete or failing grade.
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Community Projects Funds
Distributions are made to the project purpose specified in the fund agreement.
Fund Establishment
The minimum amount for starting a new or transferring fund is $5,000. This can be waived by board action. Each fund agreement will state that the donor explicitly grants the community foundation the following variance power over funds received:
The Advisory Committee recognizes the authority of the Upper Peninsula Community Foundation Alliance to modify any conditions or restrictions on the Fund if they become unnecessary, incapable of fulfillment, or inconsistent with the charitable needs of the community served, and agrees to its exercise of this authority with respect to the fund as follows:
The CFUP agrees that if its Board of Trustees proposes to exercise its authority, no such action shall be taken unless the CFUP notifies the Advisory Committee in writing of:
- its intent to exercise such power, and
- the manner in which the CFUP proposes to vary the
- conditions or restrictions of the Fund thirty (30) days prior to taking any action.
During the notice period, the Advisory Committee may advise the CFUP of its views regarding the proposed exercise of authority and take such other action as deems appropriate. If the CFUP becomes aware of any other action instituted or proposed by any other person to vary the purposes, uses or methods of administration of the Fund, it will promptly notify the Advisory Committee.
All fund agreements must state whether the fund is endowed or unendowed. If unendowed it must clearly state if the principal can be used for grant-making. A donor advised fund must state the name of the person(s) who will be suggesting the grants and who will succeed upon the death of the donor. If generational, it must state a limit on how many generations.
The board has granted the executive director the authority to sign agreements for new funds. All fund agreements are prepared using forms that have been approved by the board. The executive director has the authority to seek legal counsel for agreements, as necessary. It is strongly urged that donors either starting new funds or transferring an established fund to the CFUP have their legal counsel review fund agreements prior to signing.
The Fund Agent, either the initial donor (or their representative) or Advisory Committee chair, will receive a financial report annually on the fund status. Gifts as a whole will be reported to the fund agent and also on the annual report, which is sent to all donors.
All gifts to the fund are co-mingled in an investment trust account unless otherwise specified in the fund agreement. However, receipts and disbursements of each fund shall be accounted for separately and apart from gifts to other funds in the Foundation.
Please click on the links below to view the funds held within each local community foundation.
