Guide to grantmaking
Mission and Strategic Plan
Our mission is to inspire North Carolinians to make lasting and meaningful contributions to their communities. We succeed through a unique statewide network of affiliates that leverages the collective power of local leadership to effect meaningful change throughout North Carolina. We build partnerships to strengthen our state through measurable, sustainable strategies that benefit all citizens. Our commitment to excellence supports stewardship through our transparency, integrity and accountability.
Goal One: Ensure a strong and engaged statewide affiliate network
Goal Two: Build the charitable resources to strengthen North Carolina communities
Goal Three: Serve as an innovative, accessible and effective partner for our donors
Goal Four: Encourage philanthropy throughout North Carolina
Goal Five: Model organizational excellence
General Information for Endowment Partners
Contributions to your fund
You may add to your fund at any time. We accept contributions in many forms; cash, credit card contributions, publicly traded securities, closely held stock, charitable reminder trusts, charitable lead trusts, life insurance, tangible personal property and real property. In many cases, significant tax benefits can be realized through gifts of appreciated stock or real estate. We encourage you to discuss any gift you may be considering with our development staff and/or donor engagement team.
Minimum endowment fund balances
The Foundation has set minimum fund balance guidelines listed in the chart below. Additionally, the North Carolina Community Foundation recommends a balance of at least $25,000 by the end of the third year in order to achieve a donor’s charitable intent and increase charitable giving opportunities.
Investment of funds
The North Carolina Community Foundation has ultimate responsibility for investing component funds and allocating investment earnings. The Foundation Board of Directors has appointed a finance committee to advise the full board as to its investment and allocation functions. The current investment policy is a diverse, moderate asset allocation of 65% equity, 25% fixed income and 10% cash. Our board has determined this structure appropriate for the long-term perspective of philanthropic investing.
Allocation of income and market value adjustments
On a monthly basis, all component funds will have the interest, dividends, and realized and unrealized gains and losses allocated to the fund. Allocations are based on the previous month’s ending fund balance.
The North Carolina Community Foundation’s financial statements are prepared in accordance with generally accepted accounting principles. The Foundation’s fiscal year-end is March 31. The financial statements are audited annually by an independent accounting firm and are available upon request. A financial statement is included in the Foundation’s annual report. A report of all distributions from component funds is included in the annual report as well.
All fund advisors and established beneficiaries receive quarterly fund reports. These reports summarize all activity in the fund for the quarter. These reports are mailed within 45 days after the appropriate quarter end. A detailed list of all contributors and grants from the fund will also be included in this report.
Presidents and treasurers of established community affiliates receive quarterly summary reports of the balance of their affiliate unrestricted fund. These reports may also be requested throughout the year.
Amending fund agreements
Once a fund agreement has been established, the assets transferred to the Foundation in connection with that fund agreement are the sole and exclusive property of the North Carolina Community Foundation and the Foundation is able to freely and effectively employ the transferred assets to further its charitable purpose bound only by those restrictions, if any, that are established on the date of the gift. Because of IRS regulations, established agreements may only be amended under limited circumstances. The Foundation may, but is not required, and in its absolute and sole discretion, provide its consent to an amendment to a fund agreement (endowment or gift fund) only under the following circumstances:
- To release restrictions originally imposed by the donor in the fund agreement
- To change the name of the fund
- To change the name of a successor advisor
- To correct a typographical error or a scrivener’s error
- Upon initiation by the Foundation based on unusual facts and circumstances that dictate amendment is appropriate AND the Foundation has sought and obtained approval from legal counsel
By law, the Foundation may NOT provide its consent for the following donor proposed amendments:
- To add additional restrictions to a fund agreement
- To substitute one restriction for another
- To designate the timing of distributions
In order that all private information with respect to donors and prospective donors is kept confidential, employees of the North Carolina Community Foundation are required to sign the Foundation’s confidentiality agreement. The Foundation does not provide donor contact information to any outside source. Gifts to charitable organizations through an endowed fund may be made anonymously by communicating this desire to Foundation staff. Gifts may also be made anonymously to a Foundation component fund by communicating such a desire through a Foundation staff member.
Changing or adding advisors
Only advisors named in the Fund Agreement and/or communicated in writing by the original donor to Foundation staff may make advisory recommendations for the fund. During the lifetime of the advisor(s) to the fund, the advisor(s) may request in writing that the Foundation add or change advisors to the fund which will be carried out through an addendum to the original agreement. The original donor may also add or change advisors by a direction in his or her will.
Unless otherwise noted, the fund advisors specified will be the main contacts to receive quarterly statements and other information pertaining to the fund. It is the fund advisor’s responsibility to apprise the Foundation of changes in status or address.
To effectively serve the charitable interests of North Carolina’s diverse people, cultures and communities, the North Carolina Community Foundation continues to seek and retain diverse staff and board members, affiliate fund and advisory board members, donors and volunteers. The Foundation takes care that its community leadership efforts and grants programs address diverse causes and constituencies and that its policies and practices do not promote exclusivity.
Grantmaking with the North Carolina Community Foundation
The North Carolina Community Foundation’s standard policy is to distribute 5% of the fund’s average balance (less any outstanding pledges) annually. All fund advisors are sent an annual year end grant-making packet in February of each year indicating the amount available for spending based on the current 5% payout rate. The fund’s primary contact should fill out the form and return it to the Foundation. Advisors who do not wish to make a payout in any given year in favor of endowment growth are permitted to do so for up to five years. Funds established after October 1 in any given year typically do not receive a distribution in the following year to avoid invasion of principal.
Contributions to enable additional distributions
Donors may make contributions to an endowed fund which would enable additional distributions to be made beyond the Foundation’s 5% annual recommended payout. Such information needs to be noted in writing when the contribution is made.
Minimum grant distributions
The Foundation’s current minimum grant distribution is $100.
Where grants may be made
The Foundation makes distributions to organizations in any geographic region of North Carolina and in certain limited circumstances outside North Carolina if they meet stated criteria.
Tax-exempt status determination
The Foundation staff research the beneficiary organization to determine that it is recognized by the IRS as a tax-exempt 501(c)3 or similar organization and that it is in general good standing in the charitable community. Foundation staff will contact the fund advisor if this basic criterion is not met.
Completing the recommendation for charitable distributions form
To initiate the process of recommending a grant from your fund, complete the Recommendations for Charitable Distributions Form sent to you annually in your year end grant-making packet sent in February. A copy is included at the back of this manual and a flow chart tracking the life of a grant recommendation form can also be found there. If you would like assistance locating programs within your field of interest, please contact the donor engagement department.
Grant check processing
The Foundation distributes grant checks every two weeks from February 1 – December 15 each year. Checks to charitable organizations are accompanied by a letter from the Foundation indicating the fund name as well as the donor’s name and address (unless anonymity has been requested) as well as the project name or program area for the designated funds.
All charities receiving grants must complete a report form (see a sample at the back of this manual) and submit it to the Foundation within sixty (60) business days of receiving the grant. If there is sufficient evidence to believe that a grant has not been used for the specified purpose, the Foundation will request that funds be returned to the Foundation immediately. If there is an organization with an outstanding grant report, no grant will be made to that organization until the obligation is fulfilled. Discrepancies or irregularities in the recipient’s handling of distribution(s) will be reported to the donor.
An Extraordinary Distribution is a request for a distribution greater than the standard 5% spending rule and considered an exception rather than the norm. Extraordinary distribution requests must be made in writing addressed to the President/CEO of the Foundation and then routed to the Grants Committee of the North Carolina Community Foundation. For more information about the extraordinary distribution process and the steps required to submit a request, please contact the NCCF President and CEO.
Supporting our endowment partners
From time to time, you may have questions regarding your fund, the grant-making process, contributions to your funds or just have a general inquiry about the Foundation. See our staff listing for contact information. If you're not sure how to direct your question, please call our main number at 919-828-4387 or 1-800-201-9533, and we'll assist or connect you with the right contact.