The Foothill-De Anza Foundation Endowment is invested within a consolidated pool, but each endowed fund is created and accounted for separately and used in accordance with the donor’s wishes. All endowments are managed and directed per the Foundation Investment Policy, Foundation Endowment Policy, and the Investment Payout Policy.
The following payout procedures are set in place in order to maximize the likelihood of the endowment maintaining inter-generational equity, and to deliver a consistent as well as growing stream of income to the operating budget.
Endowment Fund Investment Payout Policy
Current Endowment Policy sets the payout for endowed funds with in a range of 0–8%of
the principal based on the applicable market value of the investment pool. The applicable
market value is defined as the average of the consolidated investment pool’s market
values for the 12 trailing quarters ending on June 30 of the fiscal year just closed.
This allocation may exceed the aforementioned range in circumstances where either
contribution far exceed expectation and/or the investment performance is well beyond
its expected rate of return for a given period of time.
The payout will be valued when closing reports are received from fund management companies. Distribution is typically planned for August of the new fiscal year. A newly funded endowment will receive a payout in the fiscal year following its creation, prorated on the number of months the fund is invested within the pool for the that current fiscal year. Up to 2% of the endowment portfolio’s fair market value will be assessed each year to offset the associated administrative expenses incurred by the Foundation.
Expendable Funds Investment Payout Policy
The Foothill-De Anza Foundation invests some expendable, gift funds in a consolidated
Expendable Fund pool, but each of these funds is created and accounted for separately
and used in accordance with the donor’s wishes.
The Foundation takes its investment responsibilities for these funds seriously, but is not under donor or Board mandate to return income to the funds to maintain inter-generational equity. The Expendable Fund pool will be valued by the close of the fiscal year based on current-year income to the Fund, and payout will occur in the following fiscal year, typically in August. There will be no minimum payout set for funds invested within the Expendable Fund pool. A reasonable percentage of the Fund’s realized and unrealized gains and income will be used to support the Foundation.
Adopted October 26, 2005
Revised by Finance Committee on July 29, 2008
Adopted by Board on August 27, 2008
Revised by Finance Committee on September 7, 2010
Adopted by Board on September 22, 2010