1) Who handles the LHS Alumni Scholarship Endowed Fund checkbook and other stuff?
LHS Alumni Scholarship Fund does not have a bank account or check book; ACF has it. The LHS Alumni Fund is held at The Alaska Community Foundation (ACF). ACF has over 1,000 accounts totaling over $100 million, and has a Federal EIN#. ACF charges a 2% fee to the LHS Alumni Scholarship Fund to issue the donor tax letter, file the annual IRS tax returns, has an annual audit, complies with national standards of community foundations, provides quarterly account statements, provides a limited website to accept donations on-line, advertises the scholarship open dates, oversees the scholarship recipient process and issues the scholarship check directly to a recipient's university or technical school. It is up to the organizing committee and friends of the LHS Alumni Scholarship Fund to promote the growth of the fund to provide more scholarships in the future to help Lathrop graduates continue their education. The Advisory Board helps appoint a Scholarship Selection committee which is confirmed by ACF.
2) What financial information does ACF provide?
ACF provides quarterly fund activity statements.
The statements report the beginning Fair Market Value (FMV), Receipts (contributions, interest/dividends, realized gain/loss, and unrealized gain/loss) Distributions (Bank and merchant fees, foundation administrative fees, scholarship awards, investment custodial management fee), and Ending FMV and Ending Spendable. To date the fund FMV is larger than the net of contributions, less fees, less the granted scholarship.
3) What are other expenses and who pays?
There are no wages or no reimbursements to the organizing committee (Advisory board). The LHS Scholarship Fund website is gratuitously provided by Leland Rich Class of 1974. The organizing group contributed $2,400 for a ½ page Fairbanks Daily News Miner ad on July 2020 to a. announce the first scholarship recipient, b. to give credit to the donors and c. to encourage other alumni to donate was personally paid by four alumni. Promotion of the scholarship fund is by emails, Facebook, Fairbanks Daily News Miner articles by Kris Capps, and word of mouth.
4) What kind of fund is the Lathrop High School Alumni Scholarship Fund?
When the LHS Alumni Scholarship fund Fund of $6,000 was opened in 2019 at The Alaska Community Foundation, it was not endowed. The fund could only be spent on scholarships. There was no limit on how fast it was could be spent. The Organizers of the LHS Alumni Scholarship fund chose to issue a $2,000 scholarship after the FMV grew to over $15,000. This was accomplished in 2020. The downside to this approach was that the fund could issue a $2,000 scholarship and then stagnate if no more donations were received. This was not the intent of the organizing committee and fortunately it did not happen. Once the fair market value (FMV) of the fund reached $50,000 it qualified to be an "endowed" fund. This means the accumulated donations can NOT be spent and will remain in the fund in perpetuity; ONLY the earnings generated by the donations to the fund can be spent. Because donations cannot be spent (only the earnings can), it results in the donations continuing to grow year after year after year. So even if no more donations were received, the $50,000 endowed fund would still generate enough annual earnings to fund a $2,000 scholarship. The LHS Alumni Scholarship fund Fund reached the $59,000 level at the end of March 2021 and was transferred to an endowed fund. $50,000 was allocated as endowed and $9,000 was allocated as spendable to fund scholarships for the next few years, until the endowed fund matures. The full name of the now endowed fund is the "Lathrop High School Alumni Endowed Scholarship Fund".
5) How are the distributable earnings of the endowed fund calculated?
Each year The Alaska Community Foundation assesses a spendable percent. This is done with consideration of inflation proofing the fund and leveling out the annual investment highs and lows which results in a conservative spendable amount. In 2021 the assigned percent allocation is 4%. Then the assigned percent is multiplied by the average fund balance of the last 16 quarters. Thus, it takes about four years for a donation to fully season or mature. This is why $9,000 was earmarked as spendable when the endowed fund of $50,000 was opened in 2021…. the The $9,000 will help cover an annual $2,000 scholarship until the earnings accumulated donations can mature.
6) How much of my donation goes to scholarships?
100% of donations, less credit card fees, if applicable, are allocated to the endowed scholarship fund. Then the net earnings of the principal of the fund (your accumulated donations) support these scholarships.