Establishing chapter and scholarship endowment accounts
Todd Shelton | 6/30/2004 April 18, 2004, the Kappa Alpha Order Education Foundation Board of Trustees voted to amend the scholarship and chapter endowment fund guidelines. Any friend or alumnus of KA may establish a scholarship account or chapter endowment account for educational purposes according to the following guidelines:
- With an initial minimum gift of $1,000 or more, friends of KA, undergraduate or alumni members of a chapter may request that the KAOEF establish an endowment account for an active chapter or a scholarship. The $1,000 initial gift may be a single gift or the total of a number of gifts provided at one time.
- A percentage of each gift donated into the account will be added directly to the principal of the account and a percentage will be paid to the foundation for administrative expenses (document preparation fees, draft of scholarship endowment agreement and associated fees, annual accounting and auditing fees, account distribution process and associated fees).
From the date of the initial gift(s), the account has five (5) years to reach the board-approved minimum endowment level of $25,000. When that level has been sustained for a full fiscal year (July 1 - June 30), distributions will be made from the return on the principle of the account. Should the minimum endowment level not be reached within five (5) years, or if no contributions are received for a period of five (5) years, the funds will revert to the foundation’s general funds to be disbursed at the discretion of the Board of Trustees.
Distribution Policies
In keeping with the foundation’s mission and obligations as a 501(c)(3) charitable organization, distributions made from account income must satisfy the Internal Revenue Service Code and may be used only for educational purposes. When endowed ($25,000), the return generated by the account will be used to benefit the local chapter and/or active members by providing distributions for purposes in accordance with IRS regulations. Subject to change, distributions may be used for:
Chapter Endowment Accounts: purchase of chapter computer equipment, software and/or internet wiring; resident advisor lodging/stipend; established educational areas in chapter facilities; loans to chapter housing corporations*; National Leadership Institute travel expenses; National Leadership Institute registration fees; Undergraduate Interfraternity Institute (UIFI) travel expenses; Undergraduate Interfraternity Institute (UIFI) registration fees; province council travel expenses and registration fees; scholarships (tuition payments); academic expenses (books, study aids) Scholarship Accounts: tuition payments; academic expenses (books, study aids, etc.) Accounts are managed according to the provisions of the KAOEF’s Endowment & Spending Policy. Essentially, once the account has reached the minimum endowment level, annual distributions (within a fiscal year) will be based upon five percent (5%) of the account balance over a three-year moving average of the account, rounded to the next lowest $25 increment. Each account will be assessed an annual maintenance fee of one percent (1%) of the balance of the account for ongoing support. If distribution is in the form of academic scholarships, recipients will be selected annually by the KAOEF Scholarship Committee based upon applications received from that chapter.
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