5b: Scholarship and Program Funds Policy

  1. Statement of Purpose
    The purpose of this policy is to outline Foundation requirements for establishing and sustaining scholarship and program funds that support the College. Foundation scholarships help students pay tuition and fees, and other eligible educational expenses required for their area of study while at the College. Program funds enhance and create areas of academic excellence and support a better student experience while attending at the College.
  2. General Principles
    1. The College is subject to the legal restrictions contained in Titles VI and VII of the 1964 Civil Rights Act and the Equal Protection Clause of the Fourteenth Amendment and other state and federal laws that ensure equal access to education. The College complies with such laws in its recruitment, outreach and retention and other student programs. As an institutionally related organization, the Foundation may not accept charitable contributions if there is reason to believe that gifts, and any restrictions placed on gifts, are (i) incompatible with the Foundation’s or College’s mission, strategic goals or core values, (ii) would create a conflict of interest or impose an unreasonable financial, administrative or programmatic burden, (iii) would involve unlawful discrimination, and/or (iv) would cause the Foundation or College to violate any applicable law or regulation or to jeopardize tax exempt status.
    2. Funds can be endowed to provide benefits in perpetuity (true endowment) by preserving the corpus of a gift and using fund earnings for scholarships or program support.
    3. Scholarship and program funds can also be funded by annual contributions which are distributed for the purpose designated by the donor.
    4. Other types of funds (term fund or quasi-endowed) may be established on a case by case basis with prior approval from the Foundation Board Finance and Executive Committees. The following may be addressed when considering such gifts: intention of donor and alignment with Foundation mission; minimum gift and distribution levels; investment options or strategies; and duration/time period.
    5. Scholarship and program funds are effective only if they have a consistent source of funding – either through annual contributions or significant investment earnings – and they are regularly used for the purpose designated by the donor.
  3. General Fund Policies
    1. Required Documentation:
      1. Development activities conducted by the Foundation are coordinated with the College, and all donor conditions or restricted gifts must be accepted or approved in accordance with the Portland Community College Foundation Gift Acceptance Policy. When donors restrict their gifts to the Foundation it is the responsibility of the Foundation to strictly comply with such requirements.
      2. Funds are supported by a gift or grant agreement describing the intended use of the fund as well as a pledge agreement describing the amount and timing of contributions. Fund agreements are approved by the Foundation Finance Committee and signed by the Executive Director, Operations Manager or other Board designee.
    2. Fund Minimums:
      1. A non-endowed scholarship fund requires a minimum $5,000 outright donation or pledge payable over two years.
      2. A non-endowed program fund requires a minimum $2,500 outright donation or pledge payable over one year.
      3. A true endowed scholarship or program fund requires a minimum of $25,000 in funding (multi-year cumulative) with the endowment fund being fully funded within five years.
      4. For other types of funds (i.e., term fund or quasi-endowed), minimums, payment schedules, active status, distribution minimums, and other factors will be considered on a case by case basis and approved by the Foundation Finance and Executive Committees.
    3. Fund Distributions:
      1. Funds within a non-endowed program fund, which meet minimum contribution requirements, are generally available for distribution upon request from the authorized College faculty or staff member – subject to the expenditure authorization of the Foundation’s Operations Manager, Executive Director or other Board designee. The Operations Manager or Executive Director may withhold authorization if the request does not comply with the fund uses listed in the agreement or in light of other management considerations. Monies should be distributed at least every two years, unless they are earmarked for future use.
      2. Non-endowed scholarships can be established at any time during the year and awards will be distributed during the next scholarship cycle. Payment must be received prior to the award being made to the student.
      3. A true endowed scholarship or program fund will not generate scholarship awards or monies for program use until it is fully endowed. Initial awards and program distributions will be made once sufficient earnings have accrued, and upon approval of the Finance Committee of the Foundation.
      4. Annual awards and distributions from a true endowed scholarship or program fund will depend on fund investment performance and other management considerations. For additional information, refer to the Endowment Spending Policy in Section II. F.
    4. Active Fund Status:
      1. A non-endowed scholarship or program fund is considered in active status if it receives ongoing (usually annual) contributions and monies are being used regularly, or are earmarked for future use.
      2. A true endowed scholarship or program fund is considered in active status when it is fully funded within the agreed time frame.
    5. Closing an Inactive Fund:
      1. If a non-endowed fund does not receive ongoing (generally annual) contributions and the monies are not being used regularly, it will be considered inactive. If extensive efforts made to notify the fund’s donor/contact are unsuccessful, Foundation management will have the discretion to close the fund and terminate the fund agreement. Any fund balance will be spent in accordance with the general purpose of the agreement, as interpreted by the Foundation’s Executive Director or Operations Manager and with the approval of the Foundation Finance Committee.
      2. If a true endowed fund does not reach the minimum level within five years, the fund will be considered inactive. However, prior to this designation, the Foundation will endeavor to contact and work with the donor/contact to explore options, such as changing to an annual scholarship or program fund. If considered inactive and extensive efforts made to notify the fund’s donor/contact are unsuccessful, the Foundation can place the monies in any other Foundation fund (endowed or non-endowed) as determined by the Foundation Board or its designee the Foundation Finance Committee, taking into account the original intent of the donor.
    6. Donors and/or fund agreement contacts will be advised of changes in Foundation policies and procedures (or other regulations) that could affect their donor-established fund. Policy information that is of relevance to donor-established funds may be organized as a stand-alone document to accompany agreements, or in the future, posted in a donors-only section of the Foundation’s website.