Scholarship Fund - Woodbury Foundation

Scholarship

Fund

Shape the Future

with Scholarships

A Scholarship Fund (SF) allows interested donors the opportunity to create a philanthropic fund from which they may make recommendations to the Foundation Board of Directors on distributions made from the fund to their choice of educational organization(s). These funds are simple to establish with an Investment Fund Agreement that is executed between the Foundation and the donor. Scholarship Funds may be named funds. Scholarship Funds may be either endowed or non-endowed.

How can I establish and contribute to a Scholarship Fund?

Scholarship Funds require an initial contribution of $2,500 or more and $20,000 before distributions can be taken from the Fund. Contributions made to a SF are generally tax deductible at the time the contribution is made regardless of when distributions from the SF are made. However, it is suggested that all donors consult with their professional advisor regarding their individual situation, prior establishing a fund.

What is a Scholarship Fund going to cost me?

Fees are always kept to a minimum in order to maximize the impact in the community created by distributions from funds held by the Foundation. The Fee is assessed based on the average daily balance for the quarter or a minimum of $37.50 (equivalent to $150 annually), whichever is greater, as follows:

up to $250,000, 0.375% (1.5% annually)
$250,001 to $500,000, 0.3125% (1.25% annually)
above $500,000, 0.25% (1.0% annually)

The fund is assessed any applicable investment management fees (which are netted out of investment returns reported by the Foundation). Current investment fees are available by contacting the Foundation office.

How are Funds invested?

When the WCF and the donor are developing the Fund Agreement, the donor will be asked to examine a standard description of types of investment portfolios (for example, conservative, balanced, growth or aggressive growth with an Investment Firm) which the donor feels best matches their risk tolerance and this will then be documented in the Fund Agreement. The assets in your Fund are pooled with assets of other donors who have the same risk tolerance, and perhaps, other funds that the WCF holds for future investment purposes. Fund holders will receive a quarterly and a total calendar year statement of your fund’s activity and performance as part of the pooled fund’s activity and performance. You can also access your fund through the Foundation’s donor portal at any time to view the fund status and request donations from the fund.

How do I recommend a distribution?

In the Fund Agreement that is executed between the donor and the WCF, you will be asked to designate one or more representatives besides yourself (typically a spouse and/or children) who will be designated to make recommendations on distributions to one or more educational institutions. The Foundation will determine whether each is being made to a qualified educational institution. Please note, IRS rules require final decisions on distributions be made by the Foundation and any recommendations made by designated representatives are not binding until approved by the Foundation. The Foundation, upon completion of its due diligence, will make every effort to support donor recommendations. Recommendations may be made by completing a Distribution Request Form on the Foundation’s donor portal and submitting it to the Foundation for its consideration. Donors or designated representatives will continue to make distribution recommendations as long as the fund legally exists, meets minimum balance requirements, or until they relinquish authority to make recommendations. Distributions must be no less than $1,000.

How can I plan for the continued use of proceeds from my fund?

As mentioned above, donors have great flexibility in designating successor advisors who have the authority to make recommendations on designations from the fund at a time when the donor decides they can’t or don’t want to continue making recommendations. Usually, successors are children, spouses, or other close relative, but donors may also choose to name a field of interest fund or designate one or more charitable organizations who may receive scheduled or lump sum distributions. In the absence of a succession plan in the Fund Agreement, the fund may become an unrestricted fund of the WCF and the proceeds used to meet community needs as determined by the Board of Directors.

Can I make a distribution at any time?

Distributions from Scholarship funds will be made in accordance with the schedule agreed upon at the time the Fund is opened and/or changed in discussions with the Foundation. Additionally, the Fund must have a balance of $20,000 plus the amount of the distribution at the time the distribution is made from the account. While requests can be made at any time, it is recommended that donors choose quarterly, semi-annually, or annually in order to allow educational institution(s) the opportunity to plan for distributions. Recommendations made to the Foundation will be considered in a timely fashion and distributions sent out within 15 business days. Distributions may take longer to process depending on the process of completing due diligence on the recommendation.

I opened my fund and want to make a distribution immediately; can I do that?

It all depends on which type of SF was opened. Endowed funds are generally able to make distributions within one to two years following inception based upon the performance of the fund. Please remember that endowed funds may only use the income generated from the fund’s investment, in most cases. Non-endowed funds may make distributions immediately upon achieving the account balance sufficient to make the donation(s) and have the $20,000 minimum account balance and the distribution is being made to a qualified educational institution and does not exceed the value of the Fund at the time of the distribution.

THANK YOU FOR CONSIDERING ESTABLISHING A FUND WITH THE WOODBURY COMMUNITY FOUNDATION!