Benefits of Endowment Partner Funds

• Long-term viability and stability. An endowment will provide your nonprofit organization with a steady income stream to offset operations, fund new and innovative programs, and support other mission-critical activities.
• Attractiveness to donors. An endowment is a sign that your organization will be around for a long time, which offers a further incentive for prospective donors.
• Saved time and resources. You can deepen your nonprofit’s focus on its core mission, as you require less time for administration and management.
• Professional guidance. OCF staff provide professional advice on complex gift transactions and can execute deferred gifts, such as charitable gift annuities, for your donors.
• Professional management. Our investment program combines the assets of permanent charitable funds for investment, so that each fund benefits from the strength of a large pooled portfolio. The result is high-quality, diversified investment management at reasonable costs.

OCF Endowment Partners Program (EPP)

Are you wondering if your organization is ready for an endowment? Here are the primary financial and organizational factors that typically indicate success in our endowment programs:

• Leadership. In our experience, nonprofits that are able to adapt to changing needs gain the most from endowments. Strong and experienced management, successful leadership transitions, and an active and diverse board are related indicators of success.
• Financial responsibility. Nonprofits that enjoy financial stability, fiscal accountability, a broad base of support, and a sound spending policy are usually able to maximize the benefits of an endowment program.
• Fund development capacity. To develop successful endowment funds, nonprofits should have enough staff and volunteers to complete projects, as well as the potential to raise matching funds and a strong commitment to long-term fundraising strategies.

Getting Started with EPP

If you would like to become an endowment partner, we ask that you complete an organization profile for review by OCF management. Upon approval, your nonprofit organization and OCF will sign a mutually acceptable governing contract known as a fund agreement, as well as a separate acknowledgement statement. As an endowment partner, you will then transfer a minimum of $25,000 to OCF, which we will administer under the terms of the fund agreement.

For more information on establishing an endowment partner fund, please contact a charitable gift planner in your region.

Already have an endowment partner fund?

If you have questions about your organization’s fund, please contact:

• Valarie Rundquist, endowment partner program officer: vrundquist@oregoncf.org or 503.227.6846

Adding to Your Fund

As an endowment partner, you will want to grow your endowment and add to your OCF fund.  Although some organizations successfully build their endowments by contributing a portion of annual revenues, most use fundraising efforts to support their endowment funds.

Here are two ways we can work with you to build your endowment.

Donations

When your nonprofit relies on donations to grow its endowment, the raised monies are given directly to your organization and your group acknowledges the contribution. You may then choose to send the donations to OCF, which we will add to your endowment. 

Securities

OCF may agree to manage gifts of securities to your organization’s fund in the event that your organization does not have a securities broker. As your endowment partner, OCF works with you to coordinate the transfer and sale of the security. After receiving the security, we automatically liquidate it and acknowledge the donor.

For more information on handling securities, please contact:

• Valarie Rundquist, endowment partners program officer: vrundquist@oregoncf.org or 503.227.6846

Distributions

Here are some details governing the distribution of your endowment partner fund.

Spending Policy

OCF makes distributions from permanent endowment partner funds based on the spending policy set forth in OCF’s investment policy, which calls for the OCF board to set an annual payout rate for permanent funds. Our current rate is 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 2013 distribution is calculated at 4.5 percent of the average of values for the 13 quarters ending September 30, 2012.

Distribution Schedule

Typically, distributions from endowment partner funds are made semiannually. 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 of the contribution.

• Example I: A fund established in December 2013 will receive a full-year, 2014 distribution based on the amount of the gift. Half of the distribution will be paid in June and the other half in December.
• Example II: A fund established in April 2013 will receive a prorated distribution for 2013. Because the fund will exist for eight months of the year, the distribution will be 8/12ths, or 67 percent, of a full-year distribution. It will be available for December 2013 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 the annual distribution back into the fund. Reinvested distributions add to the fund balance and are not available for distributon in future years. 

For more information, please contact:

• Valarie Rundquist, endowment partner program officer: vrundquist@oregoncf.org or 503.227.6846

Planned Giving

The Oregon Community Foundation supports endowment partner organizations in building their endowment through deferred gifts (also called planned gifts). OCF staff can work with endowment partners and their donors to explore and create bequests, charitable remainder trusts, and charitable gift annuities. Donors may choose to name the endowment in their estate plan, or to enjoy income for life — or a specified number of years — while obtaining an income or estate tax benefit through a charitable remainder trust or charitable gift annuity.

• Charitable remainder trusts. The minimum amount to fund a CRT is $100,000. OCF may act as trustee for no fee. If OCF does act as trustee, we require at least 50 percent of the charitable remainder to be permanently added to the organization’s fund at OCF. The remaining 50 percent may be distributed directly to the organization. 
• Charitable gift annuities. A minimum of $25,000 can create a gift annuity. During the term of the gift annuity, OCF requires the endowment partner’s fund be held in reserve for 50 percent of the amount of the gift. This is for the unlikely possibility that the annuity could be exhausted. At the end of the term of the gift annuity, the remainder creates a permanent addition to the organization’s fund at OCF.

To learn more, please read about OCF’s planned giving program, or contact a charitable gift planner in your region.