ENDOWMENT MANAGEMENT AND SPENDING POLICY
In recognition of its fiduciary responsibility, the Board of Directors (the Board) of Jewish Family Service
(JFS) has adopted the following endowment management and spending guidelines in accordance with
Colorado’s Uniform Prudent Management of Institutional Funds Act (UPMIFA), which was adopted by the
State of Colorado effective September 1, 2008. For purposes of UPMIFA and this Endowment
Management and Spending Policy, an endowment fund is a charitable fund or part thereof that, under
the terms of a gift instrument, is not wholly expendable on a current basis, the earnings from which are to
be used for JFS’s charitable purposes.
ESTABLISHMENT OF AN ENDOWMENT –
Any amount may be contributed for the JFS Board Endowment or for any previously established named
endowment. If the donor has restricted the use of the gift to a particular program, it will be placed in the
appropriate program endowment fund.
The minimum required to establish a named endowment is currently $10,000. The Board will review this
minimum periodically and may adjust it to reflect inflationary factors. An individual endowment for a
specific purpose may be established subject to the consent of the CEO and Chairman of the Board.
A named endowment may be established either by a living donor or by bequest. When an endowment is
created by a living donor, the donor and JFS will sign an endowment agreement that sets forth the terms
of the endowment. Although donors who desire to establish an endowment upon their death are
encouraged to execute an endowment agreement in advance, one is not required should a donor’s will
be executed which contains language directing that a named endowment be established.
INVESTMENT OF ENDOWMENT FUNDS –
Except as otherwise provided by a gift instrument, all donor endowment funds will be commingled in
JFS’s Investment Pool which is invested in accordance with JFS’s Investment Policy Statement. Within
a reasonable time after receiving a new endowment gift, JFS shall make and carry out decisions
concerning the retention or disposition of any property received to fund the endowment, or to rebalance
its portfolio, in order to bring the endowment fund into compliance with the purposes, terms, and
distribution requirements as necessary to meet other circumstances of JFS and the requirements of
UPMIFA.
INTERPRETATION OF RELEVANT LAW -The Board has interpreted UPMIFA to allow, subject to the specific intent of a donor expressed in the gift
instrument,1 for the appropriation or accumulation of so much of an endowment fund as JFS determines
is prudent for the uses, benefits, purposes, and duration for which the endowment fund is established.
Such appropriation may take place even though an endowment fund is “under water” (i.e., the market
value of the fund is less than the historical dollar value (HDV) of the fund), and JFS is not required to
utilize other JFS resources to bring the value of the endowment fund up to HDV.
In accordance with UPMIFA, a direction or authorization in the gift instrument to use only “income”, “interest”, “dividends” or
“rents, issues, or profits”, or “to preserve the principal intact” or words of similar import do not otherwise limit the authority to
appropriate for expenditure or accumulate as described in the following paragraph.
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APPROPRIATION OF ENDOWMENT FUNDS (SPENDING) –
The Board acknowledges that donors to an endowment fund intend that the principal of the endowment
fund shall be preserved in perpetuity. In making a determination to appropriate or accumulate, JFS shall
act in good faith, with the care that an ordinarily prudent person in a like position would exercise under
similar circumstances, and shall consider, if relevant, the following factors:
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The duration and preservation of the endowment fund;
The purposes of JFS and the endowment fund;
General economic conditions;
The possible effect of inflation or deflation;
The expected total return from income and the appreciation of investments;
Other resources of JFS; and
The investment policy of JFS.
JFS may distribute annually a percentage of each endowment fund’s average fair market value over the
prior 12 quarters through the fiscal year-end preceding the fiscal year in which the distribution is planned.
The appropriate spending percentage will be determined on a year-to-year basis by the Budget and
Finance Committee, after consideration of the UPMIFA factors listed above. It is expected that, except in
unusual circumstances, the spending percentage will not exceed 5 percent. A spending percentage that
exceeds 5 percent requires approval by the Board. Should the value of an endowment fund decline
below the HDV in any given year because of adverse market conditions, the Budget and Finance
Committee may continue to approve distributions from the endowment fund to support the endowment
fund’s designated purposes, keeping in mind the donor’s intent that the principal of the endowment fund
shall be preserved in perpetuity.
In the case of endowment funds that have been in existence for fewer than 12 quarters, the quarters
during which the endowment has been in existence will be used as the basis for calculating the average
fair market value of the fund. It is possible, particularly in the case of new endowment funds, for the
annual return on the endowment fund to be less than the spending appropriation in the short-term.
Distributions from endowment funds held at Community First Foundation (the Counseling Center
Endowment Fund) and Rose Community Foundation (the Safety Net Endowment Fund) will be utilized
for the respective programs in the fiscal year following the distributions.
Per the first amendment to the Community First Foundation endowment fund agreement dated May 26,
2009, JFS has chosen to receive five percent of the average of the net fair market value of the assets of
the Fund on the last business day of each of the three calendar years preceding the year for which the
distribution is being made. Per the Amendment to the Endowment Challenge by Rose Community
Foundation dated November 13, 2008, the Foundation shall distribute annually in arrears five percent of
the monthly average balance in the Fund during the preceding year.
AMENDMENTS
This Endowment Management and Spending Policy will be reviewed by the Budget and Finance
Committee annually. Any changes must be approved by the Board.
Approved by the Budget & Finance Committee
Approved by the Board of Directors
June 20, 2011
September 19, 2011
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