Merging Existing Endowment Accounts into the BACF
September 23, 2004,

The Bozeman Area Community Foundation currently holds about $350,000 of endowment assets (and has a goal of soon reaching $1 million). Larger is better when it comes to economies of scale.

Because of the size of its investments, the BACF has obtained significant discounts on sales charges for the group of mutual funds it selected. By housing their endowment within the BACF, other charities can obtain that benefit. As more assets are added under the BACF umbrella, the front end sales charge diminishes to virtually zero and all participating charities benefit - through what is essentially combined purchasing power.

We therefore invite all area charities to merge their endowment assets into the BACF.

One understandable hesitation to doing so is loss of control. All assets placed with the BACF, even though permanently dedicated for the benefit of the particular charity, become technically owned by the BACF. To allay this hesitation and to let charities essentially test drive the system, the BACF recently adopted the following policy:

Satisfaction Guaranteed Trial Period: Any charity may "test drive" the endowment management services of the Bozeman Area Community Foundation for a three year period. At any time within three years of opening an account within the BACF, a charity may - for any reason - request the return of control of those assets which it deposited.

During the three year period the BACF will manage the investments, will do special accounting to track those particular transferred amounts, and will promptly comply with a written request for return of control. (Value of the account when returned would include changes due to additions or distributions from / to the charity and increases or decreases in the value of the investments.) The BACF will also transfer control of any funds contributed by an individual donor to that particular BACF account on behalf of the charity (provided the BACF receives from the donor a simple note consenting to transfer of control and from the charity a note assuring continued compliance with legal and tax aspects. After the three year period such accounts will fall under normal BACF ownership and accounting, yet of course still be for the benefit of the particular charity.

Please feel free to ask any questions.