Please click on the question below.
What is an endowment?
Does the Cape Fear Garden Club manage the endowment?
What is the North Carolina Community Foundation?
What are the qualifications for grant applicants?
What is the time frame for grant applications?
Is the grant application submitted to the CFGC or to the NCCF
What is the grant application process?
Does the money go directly to the grantee?
Who ultimately decides if an application will receive a grant?
When are the grants awarded?
How much can be given out as a grant each year?
What is an endowment?
An endowment is a permanent fund from which only the income is distributed.
The fund is invested and continues to grow through sound stewardship, and the nonprofit continues to derive a perpetual and ever-increasing amount of income.
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Does the Cape Fear Garden Club manage the endowment?
No. The funds are managed by the North Carolina Community Foundation (NCCF).
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What is the North Carolina Community Foundation?
With more than $191 million in assets, the NCCF sustains 1,200 endowments established to provide long-term support of a broad range of community needs, nonprofit organizations, institutions and scholarships. The NCCF partners with 60 affiliate foundations to provide local resource allocation and community assistance in 67 counties across the state.
More information can be found on their website: http://www.nccommunityfoundation.org
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GRANT APPLICATION
What are the qualifications for grant applicants?
Any registered 501(c)(3) nonprofit or government agency who has a beautification or maintenance project within either the City of Wilmington or New Hanover County may apply to CFGC for a grant.
Please refer to the Beautification Endowment Grant Guidelines for full and complete details for application.
What is the time frame for grant applications?
Grant applications must be submitted to the CFGC Beautification Endowment Chairperson by June 15.
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Is the grant application submitted to the CFGC or to the NCCF?
The CFGC Beautification Endowment is a donor advised fund, so the CFGC Beautification Endowment Development Committee will receive and recommend grants to the Executive Board and General Membership. The Committee will then send the grant recommendation form signed by the CFGC President to NCCF.
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When are the grants awarded?
The Cape Fear Garden Club designates that grants will be awarded at the October General Meeting.
Who ultimately decides if an application will receive a grant?
Federal tax law requires the Foundation to make the ultimate decision on donor-advised funds, but all efforts are made to follow donors’ wishes. NCCF will provide due diligence review of grantees recommended by donor. Research on specific non-profits provided upon request.
The CEO of NCCF can approve most grants once the grant coordinator determines that the grantee is eligible (especially in the case of a nonprofit). Government agencies are always eligible.
How much can be given out as a grant each year
Annual grant amounts equal up to five percent of the fund’s average balance, which is calculated over the previous 12 quarters. The NCCF quarterly statements report how much your fund has available to distribute, and CFGC recommends which projects it would like to support, using the spendable amount for grant-making.
Does the money have to be given out every year?
The NCCF is a community foundation so is not legally bound by the 5% annual payout regulation that governs private foundations. If no grant is made, the dividend is rolled over.
All fund advisors are sent an annual year end grant-making packet in February of each year indicating the amount available for spending based on the current 5% payout rate. Advisors who do not wish to make a payout in any given year in favor of endowment growth are permitted to do so as long as the endowment is active.
Can the principle ever be used?
An Extraordinary Distribution is a request for a distribution greater than the standard 5% spending rule and considered an exception rather than the norm.
What happens if the CFGC is defunct? Who gets the money?
Once a fund agreement has been established, the assets transferred to the Foundation in connection with that fund agreement are the sole and exclusive property of the North Carolina Community Foundation and the Foundation is able to freely and effectively employ the transferred assets to further its charitable purpose bound only by those restrictions, if any, that are established on the date of the gift.
ADMINISTRATION & INVESTMENT
How is the endowment administered?
The North Carolina Community Foundation. A community foundation is a tax-exempt, nonprofit, autonomous, publicly supported, philanthropic institution composed primarily of permanent funds established by many separate donors for the long-term diverse, charitable benefit of the residents of a defined geographic area.
The NCCF is a collection of 1,200 permanent endowed charitable funds created by individuals, families, companies, organizations and governmental entities to benefit different charitable organizations and causes throughout North Carolina and beyond. The NCCF operates through a unique network of 60 affiliate foundations serving 67 counties across the state. The CFGC Beautification Endowment is managed by The New Hanover County Community Foundation which became an affiliate of the North Carolina Community Foundation at year-end 2009 and was formerly known as the Community Foundation of Southeastern North Carolina.
What is the administration fee charged by NCCF?
In general, NCCF’s fees do not exceed 1.5 percent of the fund’s average balance.
How is the money invested? Who directs the investment? What is the annual average growth?
The NCCF works with a number of professional asset managers who ensure that the endowment fund is invested for stability and growth. The overall investment objective of the Foundation is to preserve and protect fund principal while achieving a long-term net rate of return sufficient to cover a 5% spending policy plus an average 1% administrative fee plus inflation, as measured by the CPI index, over a complete market and economic cycle. Achieving these objectives will require assuming a moderate level of risk, a long-term investment horizon and asset diversification. The current investment policy is a diverse, moderate asset allocation of 65% equity, 25% fixed income and 10% cash. Our board has determined this structure appropriate for the long-term perspective of philanthropic investing.
DEVELOPMENT GOALS
Is there a goal for the fund value?
The first milestone, set by the CFGC Endowment Development Committee, is to reach $100,000 by year 2020.
Is there a cap on investment in the Beautification Endowment?
There is no cap on investing in the endowment and the Development Committee’s ultimate goal is to keep it growing far into the future. Individuals and corporate partners may donate to the fund indefinitely. The Cape Fear Garden Club as an organization is under no obligation or agreement to invest in the endowment. However, it may invest until a specific investment level has been reached, or indefinitely, as determined by its members.
Below is a chart that illustrates the endowment’s growth with variables of $10,000 gifts (investment) each year, awarded grants of 5% of average balance, 8% annual return and 1.5% administrative fees.
Given the variables of $10,000 in gifts (investment) each year, awarded grants of 5% of average balance, 8% annual return and 1.5% administrative fees, the fund would be worth $371,140 and would have awarded $204,471 in grants in 25 years.