Investment and Distribution of Fund Monies

Professional investment managers safeguard and invest the Community Foundation's funds. An investment committee comprised of members of the Community Foundation's Board of Trustees and others with investment expertise sets the overall investment policy and monitors the performance of these managers. The Community Foundation's accounts are audited annually by an independent auditor and are available for public review.

Funds are invested according to their investment objectives in the growth, balanced growth, balanced income, and maintenance of principal options. Details about the Community Foundation's fund managers, investment options and investment policies can be found in the Fund Performance document and the Statement of Investment Objectives and Policies document.

Under the Community Foundation’s “$500,000 policy,” donors who create funds with $500,000 or more may recommend an investment option – either using the Community Foundation’s pooled funds, as stated above, or an alternative one. The Community Foundation’s Investment Committee considers all suggestions and presents its final investment recommendations for investments to the Board of Trustees based on the best way to achieve the fund’s purpose and impact. The Board of Trustees is not bound nor obligated to approve any recommendations. The Community Foundation’s current investment managers for funds invested within the “$500,000 policy” are:

• The Family Heritage Trust Company
• First United Bank & Trust
• Maryland Financial Planners
• Merrill Lynch
• Morgan Stanley Private Wealth Management
• PNC Institutional Investments
• Wells Fargo Advisors LLC

For more information about these investment managers or their rates of return, please contact the Community Foundation.

One hundred percent of each donation specifically earmarked for a particular fund is added to that fund. Thus, the Community Foundation meets its operating expenses in three ways:

First, the Community Foundation receives many gifts from donors designated for operating expenses, including gifts received from members of The Widening Circles Society and Partners in Philanthropy campaigns.

Second, the Board of Trustees solicits gifts to be placed in a special fund called The Administrative Endowment Fund to support operations.

Third, each fund is assessed a small management fee to help offset the costs of administering the Community Foundation. The Fund Types and Management Fee document explains fees and minimum distributions for scholarships and grants (both for funds established prior to July 1, 2014, and new funds established on or after July 1, 2014).

The Board of Trustees has established a policy of appropriating 5 percent of the previous year-end fund balance to the charitable cause for which the fund is intended to support. Allocations from the Community Foundation's funds are made by the Board of Trustees, according to the agreement made between the donor and the Community Foundation.

Grant Distributions: All requests for grants from unrestricted funds are first reviewed by the Community Foundation's Grants Committee. Recommendations are then presented to the full Board for consideration and approval.

Grant distributions from donor-advised funds may be made at the written recommendation of the fund's authorized representative. The proposed grant must fit within the charitable purposes of the Community Foundation and within specific Internal Revenue Service requirements. The Community Foundation's Executive Committee and/or the Board must approve all grants awarded from any fund. Additionally, grant recommendations must pass due diligence requirements.

Allocations and grants are made to tax-exempt, not-for-profit charitable organizations primarily serving Frederick County in the areas of education, the arts, health, social services, and the conservation and preservation of historical and cultural resources. Distributions from designated funds are sent annually to the charitable cause for which the fund was intended.

Grant amounts from unrestricted funds vary depending upon the nature and needs of the organizations and the fund’s investment return.

The Community Foundation's annual grantsmaking process distributes monies from unrestricted endowment funds as well as several other funds. Please check the website for access to the application and guidelines for the various grant cycles administered by the Community Foundation.

Scholarships: Scholarships are awarded annually through an online application and review process with consideration of specific scholarship fund guidelines.

The Community Foundation considers the security of its records and its confidentiality regarding donors and contributions to be of the utmost importance. The Community Foundation’s records are never sold, shared or used by other organizations. When a gift is made to a fund, the fund’s founder or authorized representative is notified of the donor’s name and contact information, but not the amount of the contribution. Exceptions to this practice may be made at the donor’s request.

These documents provide additional information regarding the investment and distribution of fund monies:

• Fund Performance Document
• Statement of Investment Objectives and Policies
• Fund Types and Management Fee Chart