The investment policies of the Homer Foundation are designed to ensure effective management of the Foundation’s assets in order to serve current needs and long term best interests of the southern Kenai Peninsula. The Homer Foundation assets are a collection of individual donations from private citizens and other organizations. The investment policy is primarily designed to provide additional annual income for the support of local charitable needs. This investment policy was developed with the long term interests of the community in mind, adheres to accepted investment principles, and reflects the mission of the Homer Foundation.
See our Annual Reports for current and past investment performance reports.
- Endowed Assets- These assets are encumbered. The assets are intended to support the organization’s mission in perpetuity. As such, the investment horizon is long (>10 years) and liquidity requirements are limited.
- Non-Endowed Assets- These assets may not be perpetual in nature, with no set limit on the amount and timing of the distributions. The unpredictable nature of the liquidity requirements suggests that these funds shall be invested with a lower risk profile.
- Restricted/Project Funds- These assets are short term in nature (<2 year duration) and are generally for projects and/or grants that have already be committed to. These funds should be invested as Cash Equivalents.
- The Endowed Fund is to be invested with the objective of preserving the long-term, real purchasing power of assets while providing a relatively predictable and growing stream of annual community grants in support of the Institution.
- For the purpose of making community grants, the Endowed Fund shall make use of a total-return-based spending policy, meaning that it will fund community grants from net investment income, net realized capital gains, and proceeds from the sale of investments.
- The distribution of Endowed Fund assets will be permitted to the extent that such community grants do not exceed a level that would erode the Fund’s real assets over time. The Homer Foundation Finance Committee will seek to reduce the variability of annual Endowed Fund community grants by factoring past spending and Portfolio asset values into its current spending decisions. The Finance Committee will review its spending assumptions annually for the purpose of deciding whether any changes therein necessitate amending the Endowed Fund’s spending policy, its target asset allocation, or both.
- Periodic cash flow, either into or out of the Endowed Portfolio, will be used to better align the investment portfolio to the target asset allocation outlined in the asset allocation policy.
- The Non-Endowed Fund is to be invested with the objective of preserving the long-term, real purchasing power of assets while providing a relatively predictable and growing stream of distributions in support of the Homer Foundation’s mission.
- For the purpose of making distributions, the Non-Endowed Fund shall make use of a total-return-based spending policy, meaning that it will fund distributions from net investment income, net realized capital gains, proceeds from the sale of investments, and the initial and subsequent investments.
- Periodic cash flow, either into or out of the Non-Endowed Portfolio, will be used to better align the investment portfolio to the target asset allocation outlined in the asset allocation policy.
A principal goal of the Homer Foundation is to attract many donors to help build discretionary funds to provide both flexible and permanent funding sources for meeting changing community needs. By law all assets held by the Foundation are unrestricted. The Foundation recognizes that there will be donors who will wish to restrict the use of their contributions, either by advising us from time to time as to the beneficiaries they wish the income from their contributions to benefit, or by designating one or more beneficiaries when the gift is made. The Foundation accepts such restricted contributions provided they are in accordance with our established purpose and polices and federal law and tax code.
See our Establish a Fund page for more information and forms.
- A minimum gift of $10,000 is required to open a named fund. This and any subsequent gifts directed to the fund are irrevocable gifts to the Foundation.
- All donations are credited to a fund in the first full quarter after it is received, starting on the first day of the quarter after they are received. Additional gifts may be added to an existing fund at any time, in any amount, as long as they meet HF gift acceptance policies.
- The Board of Trustees, or their designee, may accept gifts of cash or publicly traded securities to establish or add to a fund. All other types of gifts must meet established gift acceptance policies, and be approved by the Board of Trustees or their designee. (See Gift Acceptance Policy 01-06.)
- All funds shall be a component part of the Homer Foundation and are combined for investment purposes. The Foundation Finance Committee provides oversight for the investment of all assets. The funds share in the total return on investment based on the fund’s portfolio share in accordance with the current Investment & Spending Policies, see above.
- Administrative Fees are assessed per the Homer Foundation fee schedule.
- All fund holders will receive a quarterly fund statement and an annual report.
- No Donor, Successor, Designee or any related parties shall derive any benefit, goods or services in exchange for a grant or distribution from a Donor Advised Fund. Advisors and their related parties are also prohibited from making any distribution to discharge or satisfy a legally enforceable pledge or obligation.
- The Homer Foundation Opportunity Fund an unrestricted fund and functions at the discretion of the Board of Trustees. Other unrestricted funds can either be a named component of the Homer Foundation Opportunity Fund, or a separate named endowment fund with an unrestricted purpose.
- During the annual budget process the Board may designate a dollar amount for unrestricted grants and that amount will be transferred from the HF Opportunity Fund to the restricted Grants Reserve Fund. Any balance in the Grants Reserve Fund will roll forward into the next fiscal year. The Grant Reserve Fund will support unrestricted grants distributed through the review/evaluation process outlined in the Homer Foundation’s current Community Grants Policy (04-02), or as directed by the board for special projects.
- The annual amount available to spend (ATS) from the Opportunity Fund is allocated to the Operating Fund annually, once the amount has been calculated.
- Donations in any amount to the Homer Foundation’s Opportunity Fund may become named funds at the discretion of the Board of Trustees. (Historically this has been reserved to founding donors as a way of keeping their name associated with the Foundation.)
Operating Fund: provides the accounting mechanism for funding the Homer Foundation’s annual operations, it does not function as an endowment fund. The Operating Fund is comprised of the following:
- The annual distributable amount from the Homer Foundation Fund at the Alaska Community Foundation;
- The annual ATS from the Aquila Fund, an Agency Endowment Fund at the Homer Foundation that functions as an operating endowment for the foundation;
- The ATS from “float” (the amount accumulated on pending distributions);
- The ATS from the Homer Foundation Opportunity Funds; and
- Donations, particularly from Trustees, who are encouraged to donate to the Operating Fund
Agency Endowment Fund: a permanent fund set up to provide investment income for a specific 501(c)(3) organization. The agency benefits from the size of the Foundation’s investment pool, as well as increased visibility from association with the Foundation.
- The agency must be a recognized 501(c)(3) non-profit organization.
- The organization receives the benefit of their portion of the ATS which is distributed annually. The ATS may be paid directly to the organization or rolled into the corpus of their Fund, at their written direction.
- The ATS from the Agency Endowment Funds are used for the charitable purposes or general operations of these nonprofit organizations. If the organization ceases to exist or ceases its charitable purpose, the ATS shall go to the nearest similar 501(c)(3) organization in the community, as determined by the variance power of the Homer Foundation Board of Trustees.
Donor Advised Fund: permanently endowed, named fund, whose ATS may be advised by the donor from time to time. While tax laws require that a community foundation not be bound by the donor’s suggestion, the Homer Foundation is pleased to have the opportunity to consider recommendations consistent with the Foundation’s mission and all current laws and tax codes.
- The donor selects the name of their Donor Advised Fund.
- Income from the Donor Advised Fund is to be distributed at least annually. The corpus of the fund remains intact.
- The donor may make recommendations regarding distribution of earnings from their fund. Recommendations must be in writing. No benefit may accrue to the donor advisor or their family. Distributions must meet all applicable laws, IRS guidelines and established Homer Foundation policies.
- The Community Grants Committee and/or staff will take a proactive stance in approaching donor advised fund holders with projects to consider for funding, and in keeping the fund holders actively involved in their fund.
- Assigning a successor advisor:
- A Donor Advised Fund holder may name a successor advisor, such as a spouse or child at least 18 years of age. There is no limit on the number of successor advisors named, but if more than one is named, one must be designated as the primary contact.
- If a successor advisor is named, the Fund will be retained as a named Donor Advised Fund and will continue to be managed by the Board of Trustees taking into consideration recommendations of the new advisor, so long as the advisor continues to play an active role. If the advisor does not make a grant recommendation and/or add to the fund in a two-year period, and the Foundation has made a reasonable effort to make contact, the Board of Trustees will direct the distributions from the fund.
- Instead of naming a successor advisor, the fund holder may designate that their fund become a part of the Foundation’s Opportunity Fund, or a part of the Foundation’s designated endowment, the Aquila Fund, or to create a new designated endowment for the Homer Foundation, or rolled into another existing advised or designated fund at the Foundation.
- If the donor fails to name a successor advisor, the Board of Trustees will determine the designation of the fund taking into consideration the original intent of the donor.
Field of Interest Fund: permanently endowed, named funds set up to provide support to areas of special concern such as education, arts & culture, youth etc., regardless of individual charitable agencies. Scholarship Funds are classed as Field of Interest Funds.
- The donor may name the fund and give general guidelines at the time the fund is established.
- The Homer Foundation’s Community Grants Committee oversees distribution from the Field of Interest Fund’s ATS, at least annually, through the established grants process, or a direct distribution through the waiver process, depending on the purpose of the fund.
Scholarship Funds: provide financial assistance: 1) for a particular class of individuals, i.e. Homer High School graduates, 2) to attend a specific educational institution, or 3) to pursue a particular field of study.
- Each Scholarship Fund will have an announcement schedule, designated selection committee (which must be approved by the Board of Trustees), written guidelines for candidate selection and award use. Committee recommendations must be approved by the Board of Trustees.
- To assure funds are used for intended purposes, scholarship awards will be distributed directly to the institution.
- The Foundation may act as a pass-through vehicle for contributions for current year awards for existing scholarships. These contributions must be received prior to the selection process for any given scholarship award.
- Pass-through contributions are held in the corpus of the fund until the award is paid.
Acorn Fund: to allow a donor to build their fund to the $10,000 minimum over a twenty-four-month period.
- An Acorn Fund will be named, and will accrue capital gains/losses. The annual ATS will be rolled into the corpus of the fund at the end of the fiscal year, and no distributions will be made from the earnings until the fund reaches the $10,000 fund minimum.
- An Acorn Fund that fails to meet the minimum balance within the twenty-four month time frame may be folded into the Homer Foundation’s designated endowment fund, the Aquila Fund, at the discretion of the Board of Trustees.
Restricted Funds: temporary funds established to provide for tracking of pass-through donations for approved projects or to expand donor advised fund grant making.
- Pass-through donations will be accepted for projects with an approved Memorandum of Understanding. The MOU will outline the purpose, time frame, responsibilities of all parties, fees if any, and designation of income. The Community Grants Committee and staff will provide due diligence to assure the distributions are for charitable purposes, and that reporting requirements are met.
- Pass-through donations will be accepted to create Grant Reserve Funds associated with existing donor advised funds for the purpose of expanding their ability to recommend grants. All pass-through grants will go through the regular distributions process unless they meet the test for a waiver.
Non-Endowed Funds: funds in which any or all of the fund corpus can be accessed. These funds are invested in a portfolio with a lower risk factor than endowed funds and may be modified by the Board of Trustees from time to time. With a non-endowed fund, the donor has full access to any or all of the fund balance in the account to support their philanthropic goals.
- Any amount of the fund balance may be requested by an authorized representative for grant making. There are the following parameters for these requests:
- Authorized representatives must verify fund and submit a request.
- Requests below $5,001 are distributed in 1-2 weeks
- Requests above $5,000 will require Homer Foundation board approval and may take 1-2 months to be disbursed
- A non-endowed fund can be converted to an endowed fund, with directive from the fund representatives and/or board of directors. An endowed fund, however, cannot be converted to a non-endowed fund, since the assets are permanently protected.
- A donor may add internal controls if they would like the non-endowed fund to be treated like an endowment, e.g. requiring additional signature from authorized representative or family members.
It shall be the duty of the Committee Chair to assure open and fair access to the scholarship application process.
The Committees will recommend distributions from the Funds as they deem appropriate to accomplish the purposes of the Funds. Any such recommendations of the Committee to the Foundation shall be in writing and signed by the Chairman of the Committee or a duly authorized Committee member as designated by specific action of the Committee, and will include a list of Committee members, with any disclosures, and the date and location for the review. Recommendations are made to, and approved by, the Foundation.
The procedure for selecting such scholarship recipients shall be agreed upon by the donor and the Foundation at the time the Fund is established, and attached to the Fund Agreement as Schedule B. Selection criteria may include the following:
- Preference will be given to (specific area of study, for study at a specific school, for graduates of a specific school, for residents of a specific geographic area, etc…
- No immediate family members of the donor, review Committee, nor of employees or board members of the foundation, shall be eligible for such scholarship.
- Applicants will apply through a competitive application process.
- Applicants will be judged on criteria determined by donors and the Homer Foundation at the time the fund is established.
- Selection will be made without regard for race, color, national origin, age, sexual orientation, or gender of candidate.
- The amount of the scholarship award will be at the discretion of the Committee unless the award amount is stated in the fund agreement. The award should not exceed the amount of available for distribution (ATS) of the Fund, but may also include current year donations received prior to the selection process.
- The Committee is under no obligation to distribute funds if no suitable candidates are found in a given funding cycle.
Terms and Conditions
- Fund founders’, committee members’, and Homer Foundation board members’ or staffs’ immediate family members are not eligible to receive the award.
- Scholarship award checks must be sent directly to the institution where the recipient attends/will be attending, and payments are to be divided equally between terms.
- It is the recipient’s responsibility to provide the Homer Foundation the address where the recipient will be most easily reached during the academic year.
- In the event the recipient is unable to complete a quarter/semester and must withdraw from school, notification in writing must be made to the Homer Foundation staff. Reasons for withdrawal must be clearly stated, as well as intentions for the future. The Homer Foundation reserves the right to request restitution of monies expended for the quarter/semester of withdrawal. The Homer Foundation has the authority to decide if the scholarship award may be transferred to another institution.
- For purposes of this policy, family members are defined as follows: first and second generation siblings, spouse, and offspring.
- Other requirements as set forth by the Homer Foundation.
Community Grants Policy
A principal goal of the Homer Foundation is to provide charitable benefit to the residents and communities within the Foundation’s service area through its various distributions, including community grants and scholarships, and to assure that the process is fair and equitable.
You can find grant applications on our Grants and Scholarships Page.[/text_output]
- The Foundation follows all applicable tax laws and National Standards for Community Foundations when administering its community grants including assuring transparency and due diligence in its review of recommendations and applications, and providing appropriate oversight for approved distributions.
- The Board of Trustees has authorized the Community Grants Committee to approve grants through the non-competitive year-round grants program up to a designated cap. A letter of inquiry is required for requests above the cap.
- The Community Grants Committee Chair assures appropriate committees are constituted for each of the different types of distributions. Individuals serving on any review committee abide by the Homer Foundations’s conflict of interest and disclosure policies.
- The Board receives community grants reports at least quarterly, including detail on any distributions approved through the waiver process. Acceptance of this report is recorded in the meeting minutes. Fund holders receive reports at least quarterly with detail on any distributions from their funds. All distributions are reported annually in the Homer Foundation’s Annual Report.
- For all distributions, the Homer Foundation assures donor intent is followed and that it meets Homer Foundation policies and applicable tax regulations.
- The Community Grants Committee proactively matches grant requests to fund advisers interests, and seeks out needs in the community that align with specific funds when earnings are available.
- Policy and Procedure Review: The Board of Trustees will, from time to time, review and approve committee make-up, grant application and guidelines, due diligence for grants, and these policies and procedures to assure they meet current legal requirements and industry best practices.
General Application Procedures:
- Grant application forms are available by contacting the Homer Foundation office, or may be downloaded from the Foundation’s website: homerfoundation.org. Information regarding availability of grant applications and guidelines are widely disseminated including news releases, Homer Foundation Annual Report and website.
- Each grant program has an application form specific to that program. Requests must be made on a current grant application form. Under certain circumstances, the application and/or review process can be waived when the distribution meets established criteria (See Grant Review Waiver Guidelines and Form).
- Annual grants programs each have a designated submission deadline. The non-competitive year-round grants program does not.
- In all instances, the Foundation will assure that donor’s intent is followed as long as it meets Foundation policy and applicable tax regulations.
Gift Acceptance Policy
The strength behind community foundations is the ability for individuals to collectively build permanent philanthropic assets for their community. The Homer Foundation provides a simple, powerful, and highly approach to giving. Our donors have found many creative ways to make a tax-deductible donation to support their community.
- All gifts should be considered in context of preserving the Foundation’s public support test and avoiding exposure to any significant monetary obligation or any legal or ethical problems.
- The HF encourages donors to make gifts to the Foundation without material restrictions.
- Acceptance by staff of gifts consistent with the purposes, bylaws and procedures of the Foundation shall not require review by the Gift Acceptance Committee if the gifts are in any of the following forms:
- Marketable securities and bonds
- Cash and cash equivalents
- Gifts of usable furniture and equipment for the offices or programs of the Foundation
- Gifts of precious metals, where the value is easily established.
- Insurance Policies (where the donor pays any annual premium) and Individual Retirement Accounts that name the HF as the beneficiary.
- Gifts requiring review and approval of the Acceptance Committee include gifts to Donor Advised Funds that would result in an “excess business holdings” violation under the Pension Protection Act of 2006. Gifts to Donor Advised Funds will be reviewed for any interest qualifying as “excess business holdings.” The holdings of a donor advised fund in a business enterprise, together with the holdings of persons who are disqualified persons with respect to that fund, may not exceed any of the following:
- 20% of the voting stock of an incorporated business
- 20% of the profits interest of a partnership or joint venture or the beneficial interest of a trust or similar entity.
- Any interest in a sole proprietorship
If such a gift is approved the Investment Committee will monitor and divest the holdings that are above the permitted amount within the five year limit. The potential donor will be notified of this requirement prior to completing the gift.
- the sum of $ (amount); or
- percent % of my estate; or
- describe property; or
- “all the rest, residue and remainder of my estate real or personal.”
to the Homer Foundation, a 501(c)(3) nonprofit organization, (EIN # 92-0139183) in Homer, Alaska. This bequest shall be held, managed and invested by the Homer Foundation, the income of which, and principal when considered advisable by the Homer Foundation Board of Trustees, shall be distributed for charitable purposes consistent with those set forth in the Articles of Incorporation of the Homer Foundation, as they now exist on the date hereof or as they may hereafter be from time to time amended.
If there are specific goals you would like to achieve through your bequest contact me to make sure we are able to meet your wishes.
The Homer Foundation
PO Box 2600
Homer, AK 99603