The Nebraska Community Foundation works with community, organizational and donor-advised affiliated funds serving 250 communities located in 80 counties. NCF and its affiliated funds have reinvested $269 million in Nebraska since 1994.
Given the changes to scholarship administration mandated by the Pension Protection Act of 2006 (“PPA”) and the new Policy for Administration of Scholarships adopted by the NCF Board of Directors, these questions and answers are intended to provide you with guidance regarding the application of the law and policy to your Affiliated Fund.
|Q 1||Is there anything we need to do if our affiliated fund does not grant any scholarships?
If your affiliated fund does not award any scholarships from your affiliated fund’s general account, endowment account or any other account that is a part of your affiliated fund, all you need to do is to complete the form at the end of the letter sent to you by NCF and return it to NCF. However, if in the future you plan to award one or more scholarships, or any donor wants to establish a scholarship account within your affiliated fund, your Fund Advisory Committee (“FAC”) will need to follow NCF’s scholarship policy and procedures, which includes nominating a scholarship selection committee that will be subject to NCF’s appointment.
What are the criteria for awarding a scholarship to be in compliance with the PPA and NCF’s policy?
Our affiliated fund already has a Scholarship Committee. Can we just use this committee?
We currently have a separate committee for each of the scholarships we award. Can a member of each of these current committees be appointed to our affiliated fund’s new SSC?
What if we want to have more than one SSC for our affiliated fund?
Who is considered a “donor” for purposes of determining the makeup of a SSC?
Who is considered “related to the donor” for these purposes?
What constitutes donor control of a SSC?
When will the new scholarship policy take effect?
When does our new SSC have to be in place?
What does the scholarship compliance fee of $300 per SSC and $20 per scholarship payment cover?
From what sources can the scholarship compliance fees be paid?
What suggestions can you offer to help us determine what to do about current scholarship accounts that do not meet the minimum endowed scholarship account size of $25,000, or that do not have sufficient funds to make the minimum scholarship award of $500?
Scholarship accounts are often established and named to honor or memorialize a loved one. What alternatives might our FAC suggest to families to accomplish this worthwhile objective?
An alternative that you might consider would be to establish a general “Memorial Scholarship” account from which all memorial scholarship awards can be made. This can allow for larger scholarship awards while assuring that awards are equitably distributed. In order to honor or memorialize the loved ones for whom contributions were made to the account, your affiliated fund may want to list the names of the individuals in whose honor/memory contributions were made to the Memorial Scholarship account in the newspaper or the graduation program.
Another alternative is to ask that all such gifts be made to your unrestricted permanent endowment in order to meet future needs of the community, then record the names of the individuals in whose honor/memory contributions were made in a Book of Memory. This book could be displayed in a prominent public location such as the library, post office or bank.
Will all of our scholarships have to comply with these new rules?
Can we transfer our scholarship accounts to the local high school to let the school manage them?
Is NCF telling us to get out of the scholarship business?
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