Pension Protection Act

Passed by Congress in 2006, the Pension Protection Act established required guidelines regarding scholarship awards from community foundations. To comply with federal law, all NCCF scholarships must abide by the following procedures:

Committee control

Neither the donor, nor any party related to the donor, may control the committee directly or indirectly. The votes of “objectively qualified individuals,” such as teachers, church leaders, or community members, must outnumber those of donors or donor-related parties, and donors must not unduly influence scholarship proceedings directly or indirectly.

Member appointment

NCCF must appoint all members of the scholarship committee by name on an annual basis before the scholarship process may begin. Should a donor of a scholarship be on the selection committee, the donor’s advice is given solely as a member of the committee.

Objective procedures

All scholarships must be awarded on an objective and non-discriminatory basis using procedures approved in advance by the foundation’s Board of Directors. Scholarships must have a pool of eligible applicants large enough to encompass a charitable class and selection criteria that do not unfairly limit the applicant pool. The act also requires that whoever selects recipients not be able to derive a private benefit, directly or indirectly, from the selection process.