Legal Aspects of F und Management. Section 5. Policies You Should Have in Place. First of A ll…. Just Because You CAN Doesn’t Mean You SHOULD.
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Policies You Should
Have in Place
The existence, management and operation of funds held by CFs are governed by the laws of the State of Indiana, and the CF’s Articles of Incorporation and By-Laws.
The consideration and adoption of policies are responsibilities of the governing board of the CF.
The Gift Acceptance policy should include:
Should cover all fund types; may want to include “This fund is subject to the Foundation’s policy on Inactive Funds, which may change from time to time.” in the Administrative Provisions paragraph.
Should allow for the creation of named funds memorializing the life of one or more deceased individuals.
Should state under what conditions that CF will allow donor-initiated fundraising, if at all.
Should state that allowing non-permanent funds to be invested in the endowment pool does not change non-permanent funds to endowed funds (spending policy, fee schedule, etc.).
Separate Investment Pools
The board of directors of a CF cannot be forced to transfer the assets held in a fund to another foundation, but can choose to do so if the fund agreement allows distribution of the “principal” and the transferring CF exercises its due diligence in determining that the proposed recipient foundation is a publicly-supported 501(c)(3) charitable organization that accepts and manages funds of the type being transferred.
Legal counsel should always be consulted when
a request is made to transfer the assets of a
fund to another foundation or when a donor
wants to transfer the assets of a designated fund
to the charity benefited from the fund or an
agency wants all of the assets of an endowed or
non-permanent fund transferred to it.
Corporate funds can include named DAFs, designated funds, named FOI funds, scholarship funds and named community funds.