Archive for October, 2008

Clarion, PA’s loved and admired printmaker Mary Hamilton has taken a step back in history to show Hermie’s Corner Grocery in its heyday. Long a landmark at Wood Street and Eighth Avenue, Hermie’s was the gateway into the Clarion University campus for generations of students, faculty, and townspeople. In the beginning Hermie’s was a community grocery that also sold sandwiches to hungry students on very tight budgets. Its latter days were as the nearest source to campus for cigarettes, gum, candy, and soda. The store is empty now and the property has been sold so the future for the corner is unknown.
The linoleum block print is 10 x 16″, in seven colors, signed, in an edition of 54, matted for $60 or framed and matted for $120. Shipping and tax additional. Contact the artist directly at skyflower@penn.com   Charles Marlin

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When you want to do something good by setting up a trust fund but you know this is not your field of expertise, you may feel hesitant taking that first step.  You don’t want to talk to someone at the community foundation until you know for sure what you want to do.  You are smart to hold back because what you need is some preparation time and idea development.  I have divided the whole process into six stops which should work for you whether you are going to Clarion County Community Foundation or another community foundation.

Stop One – Set Up  Since you are going to be thinking about this whole process over many weeks if not months, you need to keep notes on all your ideas and questions.  You cann’t know when you will want to reach back and retrieve an idea you thought should be discarded.  Start with a set of notes from half-sheets of paper or a pocket size notebook which you can keep with you on a regular basis.

Your progress is nonlineal and you can keep two or three promising ideas going at the same time as no decision is final until you make it final.  Above all you need to give yourself time to live with each idea until you know how you feel about it.

Stop Two – Purpose  Can you, in one simple sentence, state what is the purpose of your fund?  Do you want to make the purpose sentence as open as possible?  For example, the purpose of this fund is to support children’s recreation in Clarion County.  Do you want to place some restriction on the purpose?  For example, the purpose of this fund is to support children’s recreational facilities in Clarion County.  Do you want to pin the purpose down to one area of children’s recreation.  For example, the purpose of this fund is to support children’s recreational programs held at the Clarion County Park off Deer Run Road.  You may want to go a step further and identify how the grant committee will be composed or the nonprofit to benefit from the grants.

A general admonition to consider is that the less details included will make the fund easier to administer and more flexible in meeting future needs.  Society is always changing and you want your fund to flow with those changes.  If there are a restrictive clauses to meet, there may be years when it is not possible to award a grant.

Stop Three – Name  There are four ways to go with the fund name.  You can name it in memory of someone whom you loved or admired.  You can honor a living person whom you love or admire.  You can name it in honor of your family or with your own name.  Or you can go with a name that identifies the nonprofit organization you have selected as sole recipient of the fund grants.  Lastly you can identify only the field of interest in which your fund is to work.  Most of all, the name should please your fancy.

Stop Four – Types  For the individual donor or family, there are five types of trust funds you may select to use.  The first type is field of interest funds which allows the donor to identify an area of concern such as education, the family, county veterans, or the visual arts without naming a specific nonprofit as recipient.  This provides flexibility in the present and future as changes occur within the area of interest and the nonprofits active in the area also change.

The second type is donor advised funds for donors who want to participate by providing periodic advice to the foundation board concerning grant recipients.  With this kind of fund multiple generations of a family are united in a continuing commitment to their community.  Recipients of grants must be nonprofit organizations recognized by the Internal Revenue Service.

The third type is scholarship funds for students at a specific high school or university, or students resident in Clarion County persuing a specific area of study.  Usually a set of criteria for qualifying for the scholarship are set out by the donor.  This is a very satisfying type for a memorial as it can be set in the school or interest known to the person being remembered.

The fourth type is restricted funds which indentify one or more nonprofits as the specific recepients of the grants.  The nonprofit may also be included in the name of the fund but does not have to be included.

The fifth type is temporary funds.  These are not endowment funds designed to last in perpetuity, but rather they are set up for the principal and earnings to go to the benefit of a specific project such as purchasing a building, or putting on a new roof which a named nonprofit hopes to achieve sometime in the future.  For this unknown or limited period of time the principal is invested.  When it is needed the principal and earnings are redeemed by the nonprofit.  The fund is then closed.

Stop Five – Sunset  Unless you have used the broadest, most open statement of purpose there is a serious need for a sunset provision.  If for example, you have stated the purpose of the fund is to support Unrestricted Grants, or the purpose of the fund is to support education, then you don’t need a sunset provision.  If you have included details that may change in fifty or a hundred years, your sunet provision needs to allow for those outdated details to be lifted to create a new efficacy.  No one knows, for example, how education will be structured or persued in one hundred years.  School districts may not exist.

A sunset provision may state that if Clarion High School or its successor ceases to exist or reside in Clarion County the fund shall continue to support education in Clarion County.  Or a sunset provision may state that if the United Family Services or its successor ceases to exist or reside in Clarion County the fund shall become a fund serving family and children.

Stop Six – Funding  When deciding how much you want to donate or the kinds of assets you want to use for the donation, you should work those details out with your financial and tax consultants.  If you decide to start small you should set a schedule of donation goals that reach into the future.  If your fund remains small then it can do little to achieve the purpose you have set out.  You do not want the fund waiting for a hundred years before it has grown large enough to matter.

Our initial down payment is $1,000 and when the fund reaches $5,000 it can be activated.  This is alright as a starter but it does not make for a healthy mature fund.  I have named four levels of giving a donor should strive for.  The first is the Cooper Level at $50,000.  At this level the fund may make small grants.  The second is the Silver Level at $250,000.  At this level your fund will affect a measureable change in the area of your concern.  The third is the Gold Level at $500,000.  Grants from your fund will make a substantial contribution to your area of interest and your community.  The fourth is the Platinum Level at $1,000,000 and above.  If you have that much to give then you know the kind of changes your fund will have in the near future and in perpetuity.  The effect will be very large.

Settle in your mind how you feel about the details you have worked out, then give the foundation office a call at (814) 677-5085.  You are ready to sit down and explain what you want.  You are prepared.  Charles Marlin

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An autobiography is born with an ego virus so this book may put you off for that reason.  If you read it, you will most likely find other objections unless you are a follower of Dean’s brand of nonviolent missionary Christianity, noncatholic or catholic status not relevant.  His story of becoming and staying a Jesuit is worth the price so you get the struggle to turn the world into a nonviolent neighborhood for free.  If you read the book and have no misty eyed moments then you are more torpid than I.  Did I enjoy the book despite this and that?  Yes.  Charles Marlin

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Today, October 23, 2008, the Clarion University Chapter of The Association of Pennsylvania State College and University Retired Faculty voted to create two scholarships of $1,000. each in memory of colleagues who died this past year.  Those remembered are Al Lefevre, Athletics, who died 08/08/08, and William Hurst Snedegar, Physics, who died 12/09/07.  The scholarships will be administered by the Clarion University Foundation.  This is the eleventh consecutive year the chapter has dedicated memorial scholarships to deceased colleagues.  Charles Marlin

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     Details may differ between the Clarion County Community Foundation and other community foundations but these ten advantages of an endowment fund placed with a community foundation remain across the Commonwealth and the nation.  Trust accounts with a brokerage or mutual funds company are good but do not have all these advantages.  Job cuts or promotions may change who you talk to.  A family or private foundation creates administrative and legal burdens as well as costs that cut into the returns available for grants.  Good times and bad times, we are the best place to be.  Since 1914 community foundations have performed with open books and outstanding results.  From product warrenties to product recalls, you will know us in and out before you commit.  There is no 800 number to call or phone menue to select from.  With us you have to talk directly with the Executive Director or Board President.

     1. Professional Foundation Management  The fund is handled by experienced staff who have no other responsibilities to divert their attention.  Access to Foundation accounts is limited to select staff all of whom are insured.  There are no deadlines or forms for the donors or beneficiary nonprofit staff and board to worry about.  State and Federal compliance is taken care of by the Foundation.  All records are accessible to donors, nonprofit staff, board, and concerned individuals.

     2. Local Board Jurisdiction  The governing boards of Bridge Builders Community Foundations and the CCCF are composed of local citizens who have studied the details of your fund and are acquainted with the people involved with the grants from the fund.  There are no absentee officials to contend with.  Again, records are open to public review.  Donors may be elected to serve on either board.

     3.  Opportune Donor And Nonprofit Involvement  If the individual donor or donor family want to remain involved in selecting the nonprofits to receive grants they may do so.  As the donors make additional contributions and want to add to the designated nonprofit recipients they may do so.  If donors want to participate as members of the grant selection committee they may do so.  They are not, however, burdened with the administrative and record keeping tasks that must be perpetually maintained.

     4. Perpetual Efficacy  The donor is assured by legal contract that their purpose and instructions will be followed.  Continual reference will be made to the original instructions; however, with time a problem may develop because society has changed so radically that the original instructions clearly no longer work.  The original beneficiaries may no longer exist.  The original purpose is lost.  In the early history of community foundations this problem was called “The Dead Hand.”

     Community foundations now have a cautious public process in which the board clarifies a new purpose as closely allied to the original purpose as is efficient.  If such a purpose can not be found, then the problem is referred to the appropriate court for resolution.

     5. Private Client Investment  Regardless of the size of the new endowment fund it becomes part of a large diversifed investment pool managed by private client investment divisions of large banks.  Without the pooling of resources a small fund would never have access to this kind of management.  The investment policy is to match or exceed two published benchmark indices, one in stocks and one in bonds.

     6. Total Return Approach  The Foundation utilizes a “Total Return” approach to guide its investing and spending, as allowed by Pennsylvania Codes 5547, 5548, and 5549 pertaining to the use and management of trust assets by nonprofit corporations, and as permitted by its governing documents.  This approach allows the Board to establish an annual payout rate based on a percentage of the asset base over a three-year period.  The payout amount may be more or less than the actual income earned by interest and dividends, with capital appreciation (and in rare cases principal) used to help meet the established payout when necessary.  By using the total return approach, the Foundation is able to maintain and increase the value of donated assets while funding current needs at an appropriate level.

     The benefits of total return include: 1. The Foundation and its financial managers are not forced to focus investment strategies on required distributions from income alone.  2. Because investments can be managed for both growth and income, the Foundation can better focus on current needs while assuring adequate funding for future needs.  3. A larger and more predictable flow of funds will be available since distribution will not be determined solely by changes in current investment income, interest rates, etc.

     7. Low Costs  Every community foundation strives to maintain low administrative fees on endowment funds.  As a nonprofit our goal is to increase fund growth and money available for grants.  Here is our fee schedule.

     All funds existing before 2006, 1.50% of the average monthly asset value over one year.  New funds since 2006 are A. Scholarship Funds – 1.50% annually or 0.125% of the monthly asset value; B. Donor Advised Funds – 0.75% annually or 0.0625% of the monthly asset value; C. Restricted Permanent Endowment Funds – 0,70% annually or 0.0583% of the monthly asset value; D. Unrestricted Permanent Endowment Funds  – 0.50% annually or 0.0417% of the monthly asset value; and E. Temporary Restricted Funds – 0.25% annually or 0.02083% of the monthly asset value.  The fee is assessed at 0.02083% per month and is based upon the market value at the end of the previous month.  The minimum fee is ten dollars ($10.00) per month.

     8. Enhanced Integrity  The Foundation assures everyone involved that gifts to the endowment fund are never mixed with a nonprofit’s operational funds.  Personal gain and staff motives are never in question because contributions go directly into the foundation account.  Friends and family members know that contributions are never delayed or misdirected by another involved member because again the donor’s contact is directly with the Foundation.  The fund is professionally audited and reported to the state and to the Internal Revenue Service.  There are two volunteer boards vetting everything before a report is made.

     9. High Profile  Your endowment fund is not an orphan lost in the rush of a nonprofit’s business.  It has a published name with a signed contract protected by both state and Federal Courts.  It can never be removed from the county.  It has a community foundation home and is promoted in foundation publications.  The donor is not obligated to sing its praise or alert the public to the fund’s purpose.  Publicity is a service of the Foundation.

     10. Easy Setup  The donor dictates the specifics of the fund contract setting up the endowment fund.  Legal review is encouraged by the Foundation.  The fund lives by the signed contract.  The donor determines the name, as for example, Sister Emma Endowment Fund.  The donor determines the purpose, as for example, to support parenting and family life programs of the United Family Services.  The donor determines the sunset provision, as for example, if the United Family Services or its successor ceases to exist or reside in Clarion County the fund shall become part of the Unrestricted Grants Endowment Fund.  Charles Marlin

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A new book on Emily Dickinson by Brenda Wineapple, White Heat: The Friendship Of Emily Dickinson And Thomas Wentworth Higginson, is an excellent opportunity to return to E.D. to again marvel at the unique person who wrote better than any one.  There are insights to thrill you, but if this is your first book on E.D. I suggest you put it off until next season.  Buy it now and put it in a bureau lower drawer for rediscovery.  The lower drawer was E.D.’s hiding place for good stuff.  The first book you want to read and keep is Alfred Habegger’s My Wars Are Laid Away In Books: The Life Of Emily Dickinson.  When you study E.D. remember you are in deep water.  No panic strokes.  Charles Marlin

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“Magic Roundabout” multi-branching sunflower is great! It’s a new variety I planted this past summer. It grows about 5 feet tall and keeps budding and blooming. My seed came from Livingston Seed Co. which only offers its seed retail. I did see it available by a few other companies online, so if my local nursery doesn’t get Livingston Seed Co. seed next year I intend to find the seed online. John Hink

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