NTUUC Endowment Fund Policy Guidelines: Grants and Loans
As a result of remarkable foresight many years ago, and the hard work and dedication of many people over the last forty years, NTUUC is in a fortunate position, with a significant sum of money to carry on its mission of promoting the growth of Unitarian Universalism in North Texas. Recognition of the time and effort required to create those funds led the NTUUC Board of Directors to create the Endowment Fund (the “Fund”) and to delegate to the specially-created Endowment Committee (the “Committee”) the responsibility to manage the investment of the Fund and to administer grants from the Fund. The unique opportunity presented herein, and the time and difficulty that would be involved in its recreation, dictates that care be taken not only in how the Fund is invested, but in how its earnings and the fund itself are used. For that reason the following guidelines are adopted to govern grants and loans made from the Fund.
ELIGIBILITY: To be eligible for a grant or a loan from the fund the applicant must:
- Be a member of NTUUC;
OR - Be an active congregation or organization with demonstrated community involvement and activities that support the seven principles adopted by the UUA and supports the mission of NTUUC to help UU congregations in North Texas by:
Grants
GRANT FUNDS AVAILABLE: NTUUC has adopted the use of “net appreciation, realized and unrealized, in the fair market value of the assets of the endowment fund over the historic dollar value of the fund to the extent prudent under the standard provided by Section 163.007 of the Texas Uniform Management of Institutional Funds Act” as the method of determining the amount available for grants each year. From the Distributable Funds, grants of $50,000 and under may be made upon the approval of at least four members of the Endowment Committee.
Grant applications will be received and acted on throughout the year with four cut-off dates – the last day of March, June, September, and December. The Endowment Committee will then consider all pending requests and the available NTUUC resources. Grants will be delivered throughout the year as approved.
Not all Distributable Funds will necessarily be distributed in any given year. The notice of availability of funds will specify the manner of the application’s submission, and the address to which it should be sent. The deadline for submission will be at least sixty days after the availability notice. Requests received after the cut-off will be held for review at the next quarterly meeting. The Committee would normally expect to announce grants within thirty days after the submission period.
GRANT PURPOSES:
To be considered, an application for a grant must demonstrate that the funds will be used for a purely charitable, religious, or educational purpose as those terms are defined in Section 501(c)(3) of the Internal Revenue Code and be a permissible use of funds by an exempt organization under Section 501(c)(3).
Our priorities are adding professional staff or AV equipment in congregations. Except in extraordinary circumstances, grants will not be considered to defray ordinary operating costs of any congregation except for short-term assistance with startup costs if the costs are part of an organized effort of the congregation to promote its growth.
GRANT APPLICATION REQUIREMENTS AND CRITERIA:
To be considered an application must contain:
- A statement that the applicant meets all the eligibility requirements set out above, and that the use of the funds will be for a purpose that aligns with Section 501(c)(3) of the Internal Revenue Code.
- A description of the applicant’s financial commitment to the program for which the funds are requested, demonstrating positive trends in membership and pledge growth.
- Matching funds may be required, particularly for staffing, either from increased internal commitment or other external funding sources.
- A description of the applicant’s prior activities in the area of activity for which the funds are requested describing progress achieved, barriers to future progress, and how the grant addresses those barriers.
- A copy of the applicant’s Vision Statement and/or Mission Statement which must encompass the purpose for which the funds are requested.
- A copy of the applicant’s Long-Range Plan encompassing the purpose of the grant; if none exists, NTUUC might be willing to help with a strategic planning process.
- A copy of minutes of the applicant’s governing body showing the approval of the program or project to be funded with the grant, including the number of yeas and nays cast in the vote approving the program or project.
Loans
LOAN PURPOSES:
To be considered, an application for a loan must demonstrate that the funds will be used for a purely charitable, religious or educational purpose as those terms are defined in Section 501(c)(3) of the Internal Revenue Code and be a permissible use of funds by an exempt organization under Section 501(c)(3).
In appropriate circumstances, applications will be considered for loans to member congregations for specific purposes, which comply with the preceding paragraph, and which purposes have demonstrated potential for contributing to the growth of the congregation. Loans are not limited to distributable funds, but if a requested loan exceeds $50,000 and/or is to be made out of funds other than distributable funds, it must be approved by at least 75% of the members of the Endowment Committee, and 75% of the members of the NTUUC board. Loans to defray ordinary operating costs of any congregation will not be considered, except for short-term assistance with startup costs if the costs are part of an organized effort of the congregation to promote its growth by adding programs or activities, including adding professional staff or facilities.
LOAN TERMS:
Loans will be considered investments of principal of the endowment fund, and while in appropriate circumstances repayment may be structured to meet projected revenues, over the life of the loan returns would be expected commensurate with the overall rate generally expected of investments by the endowment fund.
Structured loans may include the use of such techniques as no-payment periods, interest-only periods, or amortization schedules longer than maturity with balloon payments.
Term and structure of the loan requested must bear a relationship to the nature of the use. Loans secured by land or other hard assets purchased will be considered for larger amounts and longer terms than unsecured loans. Short-term or bridge loans for startup purposes to be repaid out of refinancing or fund drives are preferred.
LOAN APPLICATION REQUIREMENTS AND CRITERIA:
- The application must contain and comply with all items set out in the Grant Application Requirements and Criteria.
- The application must contain a three-year history of the finances of the organization showing sources and uses of funds, certified as correct by a congregation officer.
- The application must contain a projection of income and expenses for at least three years, or the period of time of the requested term of the loan whichever is shorter.
- A copy of the “Plan” approved by the congregation for the project or program to be funded by the loan, including the information and analysis developed and considered in constructing the Plan. The Plan should include such things as the growth goal to be achieved; what is needed to enable growth; existing barriers for growth; how the plan addresses those needs and barriers; demographics where relevant; description of member input and process for obtaining that input; the extent to which outside consultants including UUA or district staff have been involved; benchmarks for progress in achieving the goal with the date each benchmark is expected to be achieved; etc. The plan must demonstrate that the project or program is carefully thought out, is realistic and has a reasonable prospect for achieving the desired goal.
- With respect to any loan approved, the recipient will be required to make quarterly reports to the Endowment Committee showing the detail uses of the funds and showing the progress toward the goal (including each benchmark) which has been achieved.
- If the loan is for the purpose of acquiring assets such as land or equipment, or related to construction of improvement, the loan must be secured by a perfected lien or security interest in the assets under documentation acceptable to the Endowment Committee. All out-of-pocket costs of making the loan, including the costs of granting and perfecting the lien or security interest will be added to the principal of the loan. If the project or program is to have other financing, where appropriate, the committee will consider a second or subordinated lien position for real estate and improvements, under terms and conditions approved by the committee.
- If funding for a material part of the project or program is expected from a grant or loan from any other entity, including the UUA, the application must contain current information concerning the status of approval that grant or loan. Any loan extended by Endowment Fund may be made contingent upon approval and funding of the other grant or loan.