Fund Fee & Spending Policy
Below you will find our fund fees and spending policy. It outlines the guidelines and principles that govern the allocation and distribution of our financial resources. This policy ensures that the foundation manages its funds prudently to support its mission over the long term while meeting the goals of our donors and the needs of our community.
Fee Structure
The Huron County Community Foundation has been established, in part, to assist in grant-making in Huron County. To achieve this goal, the Foundation must be able to meet the costs of establishing and managing the funds for its contributors.
The fee structure as of 2020 is as follows:
Passthrough - 5% with a minimum of $100 per fund per year
Donor Advised Fund - 1.6%
Designated/Agency - 1.5%
Unrestricted Funds - 1.5%
Field of Interest Funds - 1.5%
Scholarship Funds - Under $250,000 - 2%; Over $250,000 - 1.5%
Spending Policy
Our Community Foundation is dedicated to sustaining its mission through prudent financial management. Our spending policy, set at an annual rate of 3.75% of the average market value of our endowment over the past three years, ensures a balance between meeting today’s community needs and preserving resources for future generations. We are committed to transparency and accountability, regularly reviewing and adjusting our policy to respond to changing financial landscapes and community priorities.
The spending policy of the Foundation is in place to secure the future of the endowments as well as allow for grant and scholarship awards on an annual basis. The income available for spending is determined by a total return system. The amount to be spent in the coming year is calculated as of 12/31 and is reviewed and approved by the Foundation Board of Trustees annually. The calculation is as follows:
A 36-month rolling average of the market value of the assets is determined.
The total amount to be spent for grants, scholarships, and administration will be 3.75% of the market value of the assets as determined in #1 above.
The administrative fee shall be based on the 36-month rolling average market value of the assets.
Example
A local community fund has an endowed fund with the Huron County Community Foundation. At the fiscal year end of 12/31, the 36-month average daily balance market value of the fund is determined to be $30,000. Using the spending policy mark of 3.75%, excluding administrative fees, $1,125 is spendable for the year ($30,000 x .0375). Additionally, a Designated/Agency Fund has an administrative fee of 1.5%, $450 will be spent on administrative costs ($30,000 x .015).
Additional policies are available upon request.
Objective & Purpose
The primary objective of HCCF’s spending policy is to maintain the foundation’s financial health, ensuring sustainability and growth. This involves balancing the need to distribute funds to support community initiatives with preserving the endowment's value to support future generations.
Spending Rate
The policy specifies a spending rate based on a 36-month, three-year, average daily balance market value of the fund. This strategy is designed to even out market volatility, creating more stable spendable amounts on a year-to-year basis. This rate is determined based on various factors, including historical returns, inflation expectations, investment allocation strategy, and comparison data from other community foundations. The spending rate of 3.75% allows for stable distributions while aiming to preserve the endowment’s purchasing power.
Review & Adjustment
All Huron County Community Foundation policies include provisions for regular review and adjustment. The HCCF Finance Committee and HCCF Board of Directors review the fee and spending policy regularly to ensure it remains appropriate. Adjustments may be made periodically to the spending rate or calculation method.
Transparency & Accountability
HCCF emphasizes transparency and accountability in financial decisions. The foundation commits to regular reporting on spending activities, providing detailed financial statements, and engaging with stakeholders to maintain trust and demonstrate responsible stewardship of the endowment.
Legal & Regulatory Compliance
HCCF ensures compliance with legal and regulatory requirements, including adhering to IRS guidelines for charitable organizations. This includes maintaining accurate records of distributions and ensuring that funds are used for charitable purposes in line with the foundation’s mission. The Huron County Community Foundation is also Community Foundation National Standards accredited. National Standards represent a community foundation's commitment to rigorous, sector-driven best practices that exceed federal and state law requirements and demonstrate accountability and excellence to communities, policymakers, and the public.
