Here are some details governing the distribution of your endowment partner fund.
OCF makes distributions from permanent endowment partner funds based on the spending policy set forth in OCF’s investment policy, which calls for the OCF board to set an annual payout rate for permanent funds. Our current rate is 4.5 percent.
The annual distribution amount from each fund is calculated by applying the payout rate to the fund’s average market value over a 13-quarter period ending on September 30 of the previous year. For example, the 2013 distribution is calculated at 4.5 percent of the average of values for the 13 quarters ending September 30, 2012.
Typically, distributions from endowment partner funds are made semiannually. Half of the annual amount is paid in June and the other half in December.
It is OCF’s policy to invest new funds for six months before making distributions. In the first year, the amount available for distribution from a new fund is prorated, based on the date of the contribution.
Example I: A fund established in December 2015 will receive a full-year, 2016 distribution based on the amount of the gift. Half of the distribution will be paid in June and the other half in December.
Example II: A fund established in April 2016 will receive a prorated distribution for 2016. Because the fund will exist for eight months of the year, the distribution will be 8/12ths, or 67 percent, of a full-year distribution. It will be available for December 2016 distribution.
Fund Additions and Distributions
Generally, when a large gift is made to an established fund, the average market value will be adjusted to incorporate the gift. Considerations will be given to how large the gift is in relation to the total market value of the fund.
An endowment partner may elect to reinvest all or part of the annual distribution back into the fund. Reinvested distributions add to the fund balance and are not available for distributon in future years.
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