In 2019, the Board of the Portland FolkMusic Society (PFS) established an endowment savings account. The intent was to enable a fund that will be invested, so that the investment earnings would be used on an unrestricted basis to support activities furthering our mission which is “to preserve, present and promote folk music and arts within the greater Portland area”. The specific use of funds in any given year is to be determined by the then current Board and is unrestricted, so long as it is consistent with our mission. Except for emergency situations, determined by the Board, Endowment Fund distributions are not to be used for operating expenses.
The following policies and procedures are to govern the management and use of the fund.
1. All policies are intended to assure that the Endowment Fund is in full compliance with the Uniform Prudent Management of Institutional Funds Act (UPMIFA, ORS 128.305 to 128.336). By definition, an endowment is a fund that is “not wholly expendable by the institution on a current basis”. This means that the fund continues in perpetuity, and it is the earnings from the fund’s investment that are available to further our mission.
2. The initial endowment fund is held in a restricted, interest-bearing PFS bank account (“Endowment Savings” at OnPoint Credit Union) until it reaches sufficient size (about $25,000), at which time it will be transferred to a long-term investment vehicle. The long-term investment vehicle will be a professionally managed endowment fund, familiar with the requirements of the UPMIFA.
3. Deposits to the endowment fund may come from gifts, bequests, or other contributions which are specifically designated by the donor for the endowment fund, and from undesignated donations as decided by the board. The Board may also vote to transfer excess operating funds into the Endowment Fund.
4. After PFS establishes the long-term investment vehicle, PFS will use the Endowment Savings account to accumulate future transfers. All deposits to the Endowment Savings account will be promptly transferred to the long-term investment vehicle by the PFS Treasurer.
5. Each fiscal year the board shall decide whether to use all or part of the available distribution from the endowment fund to further our mission in a specific way, or shall decide to let the funds accumulate for another year. This decision will be communicated to our membership. If a distribution is taken in a given year, the proposed use of the distribution, the amount, and the responsible party for administering the funds will also be communicated to the membership in both the Local Lore newsletter and our website.
6. UPMIFA protects the reasonable expectations of donors to an endowment fund. Record statements made in soliciting legally become part of a “gift instrument” and confer contractual rights on contributors. In other words, people who contribute to fund an endowment have an enforceable right to insist that the endowment fund be managed as they were told it would be managed. Promotional material of record including without limitation brochures, letters and films, should be prepared with great care so as to conform to UPMIFA as well as PFS’s principles of transparency and accountability. Record promotional material must be approved by the Board vote after seeking advice of legal counsel or from a professionally endowment fund management organization.
7. Each year, that year’s donors will be publicly acknowledged on our website and/or Local Lore or by other suitable means. Our gift instrument should ascertain whether or not the donor wishes to remain anonymous and should remind the donor clearly that the fund is unrestricted.
8. Additional policies regarding donations and fundraising can be found in our “PFS Policies on Donations and FundRaising” printed here for reference:
PFS Donations and Fundraising Policies Approved by the Board of Directors, September 22, 2020
The mission of the Portland FolkMusic Society (PFS) is to preserve, present, and promote folk music and arts within the greater Portland area. Member and community contributions to help us achieve these goals are welcomed. PFS is a 501(c)(3) arts and education nonprofit, and our Employee Identification Number is 93-074134. All PFS fund-raising is to be for purposes that are consistent with our mission.
There are four broad categories of PFS donations, depending on the intentions of the donor: “General Fund”, “Endowment Fund”, “Capital Fund”, and “Program Specific Funds”.
General Fund donations are usually small, undesignated donations at our events or through our website. These funds go into our regular checking account and are used in the general course of business to pay our bills and maintain our operations.
Endowment Fund donations are usually larger donations and designated as such by the donor or are funds specifically directed here by the Board. "Endowment Funds" are defined and regulated by the Uniform Prudent Management of Institutions Act ("UPMIFA"), ORS §§128.305 to 128.336. An "Endowment" is a gift or series of gifts creating a principal fund, which is invested to create a permanent stream of revenue–interest, dividends or the like-- which when earned may either be added to the principal endowment or spent for a chosen charitable purpose. Typically, about 4% of an endowment can be used in any given year. Therefore, a $1000 donation would provide about $40 per year, which doesn’t go very far (but it goes for a very long time). A $1M donation, on the other hand, would provide about $40k per year, which is a significant amount for PFS purposes. All solicitations for Endowment Funds, and receipt of Endowment Funds constitute a legally defined “Gift Instrument”, strictly regulated by the above-mentioned statutes. All solicitations of Endowment Funds must be in conformance with both the relevant statutes and the (forthcoming) “PFS Endowment Fund Policies” document.
Capital Fund donations go into our Capital Funds account until a sufficient amount is accumulated to help us with the acquisition and or storage of physical assets as determined by the then current Board.
Program Specific Funds are those funds specifically designated for a program, such as our “Singtime Frolics Scholarship Fund”, our “Workshop Scholarship Fund”, and our “Concert Committee” fund. Additional program specific funds may be created in the future by Committee recommendation and Board approval. It is also possible to have a specific program (such as music education for example) that is supported by both endowment distributions AND supplemented by program specific donations where the donor wants the money to be spent now, not over time. There is no limit to how many program specific funds we have, just so long as each is consistent with our mission. The creation of new program specific funds will be by Board vote after the Finance Committee has made a recommendation. Committees may recommend funds to the Board, but Committees do not have the authority to create program specific funds without Board approval.
All our fundraising must be guided by the principles of transparency and accountability. Transparency means that we should let donors know why we are raising the money and what we intend to do with it. Accountability means that we should report from time to time on how we are doing. Donor recognition is important and the board will consider public recognition of donors, with permission, in addition to private recognition for tax purposes.
Undesignated donations, especially when the donor may not be available to clarify their intentions due to death or illness, will be determined by the Board. If the donation is less than $1000, it will generally go into the General Fund. If it is over $1000, the Treasurer will make a recommendation to the Board, and the Board will decide how to allocate undesignated donations over $1000.