Process for changing fund types?

KathyWhitlowKathyWhitlow Posts: 11 ✭✭
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edited June 2023 in Fund Development

Does anyone have a checklist or process to share regarding internal due diligence and process steps for changing fund types? We have fund holders with Donor Advised Funds who have relinquished their right to advise on the DAF and requested that it be used to support either operations or grantmaking. At that point, it essentially moves from a DAF to an unrestricted fund to be used at our board's discretion for operations and/or grantmaking. While we have documentation from the original fund advisor but are looking to create some process around when/how/why we change a fund type.

I would appreciate hearing about other Community Foundation's experience or resources regarding changing/updating/correcting fund types! TIA

Comments

  • kathleensaycekathleensayce Posts: 16 ✭✭✭
    First Comment U.S.A. CSuite First Compass Anniversary

    We document this change to a board advised fund with a note linked to the original fund, date stamped, and in all fund agreements, include a paragraph about making this change if the original donors/fund managers relinquish decision making.

  • KathyWhitlowKathyWhitlow Posts: 11 ✭✭
    First Compass Anniversary First Comment Photogenic First Answer
    edited September 2023

    Hi Kathleen, Just to clarify, are you saying you create a new board advised/board directed fund linked to the original fund, which is closed in CSuite at the time you open the board advised fund?

  • kathleensaycekathleensayce Posts: 16 ✭✭✭
    First Comment U.S.A. CSuite First Compass Anniversary

    We change the category when it moves to board directed grants, and document that change, though we could go your route and create a new fund, linked to the old one. It's only happened once so far (we are a small, young CF). That alternate route might better protect the fund history, now that I am pondering your comments again.

    Documentation is key: it's in the DAF documents, and when this change is needed, it is backed up by a statement document, and board decision.

  • KathyWhitlowKathyWhitlow Posts: 11 ✭✭
    First Compass Anniversary First Comment Photogenic First Answer

    Agreed! Thank you for your insights, Kathleen. I appreciate you taking the time to comment.

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