Implementing the Spend Policy for Scholarships PDC Workshop June 14, 2014 Reno, NV

Terms Each scholarship has an associated Fund Reserve Fund: $ set aside for discretionary activities; use requires Board approval Board designated funds: $ from Reserve Fund designated by the Board for some purpose Endowed: $ from non-ANS source given for a specific purpose; can only use interest Fully Funded: amount needed to give out a scholarship based on interest (moving target)

Spend Policy Spending each year from a given Fund may be up to 90% of the Fund’s three-year rolling average return Annual expenditures may not reduce the Fund below its SPCC-established, fully-funded value Annual expenditures should not exceed 1.2 times the gross award value of the previous year

Example There is a fund with $100k If 90% of the 3-year rolling average return is 5%, then a division can give out a $5k scholarship

Background Many division scholarships are not fully funded Previously: Board designated funds were used to make up the difference Miscommunication: 1.Board action taken to “fully fund” all scholarships 2.Divisions no longer need to contribute to their Fund Inaccurate! Divisions need to contribute to their scholarship Funds until they are fully funded

Current Status + Future Reserve Fund used for awards Underfunded scholarships can be “filled up” SPCC/Finance will give divisions the status of their scholarship each year 95% fully funded: fund owner gets notified that funds are needed in order to award the scholarship for the coming cycle 80% fully funded: fund owner must decide between fundraising or spending down the fund.