Here are some details governing the distribution of your endowment partners fund:
Spending Policy
OCF makes distributions from permanent endowment partner funds based on the spending policy included in OCF’s investment policy.
The spending policy calls for the OCF board to set an annual payout rate for permanent funds. Our current rate is set as 4.5 percent. The annual distribution amount from each fund is calculated by applying the payout rate to the fund’s average market value over a 13-quarter period ending on September 30 of the previous year. For example, the 2009 distribution is calculated at 4.5 percent of the average of values for the thirteen quarters ending September 30, 2008.
Distribution Schedule
Typically, distributions from endowment partner funds are made semi-annually. Half of the annual amount is paid in June and the other half in December.
New Funds
It is OCF’s policy to invest new funds for six months before making distributions. In the first year, the amount available for distribution from a new fund is prorated based on the date the contribution was made.
- Example I: A fund established in December 2008 will receive a full-year, 2009 distribution based on the amount of the gift. Half of the disrtribution will be paid in June and the other half in December.
- Example II: A fund established in April 2009 will receive a prorated distribution for 2009. Because the fund will exist for 8 months of the year, the distribution will be 8/12 ths, or 67percent, of a full-year distribution, and will be available for the December 2009 distribution.
Fund Additions and Distributions
Generally, when a large gift is made to an established fund, the average market value will be adjusted to incorporate the gift. Considerations will be given to how large the gift is in relation to the total market value of the fund.
Reinvesting Distributions
An endowment partner may elect to reinvest all or part of their annual distribution back into the fund. Reinvested distributions add to the fund balance and are not available for distributon in future years.