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HomeMy WebLinkAboutHMP 05-04; Shelley Property; Habitat Management Permit (HMP) (3)NON-ENDOWMENT FUND AGREEMENT for the Fair Oaks Valley Preserve Area Non-Endowment Fund An Advised Non-Endowment Fund THIS AGREEMENT is made and entered into on \1/1 lr3{the "Effective Date"), by and between THE SAN DIEGO FOUNDATION, ~ia nonprofit public benefit corporation described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended ("TSDF") and CWV LA COSTA 49 LLC (hereinafter, "Founder"). 1. NAME OF THE FUND Founder hereby irrevocably transfers assets in the amount of $53,288.33 to TSDF to establish in TSDF the Fair Oaks Valley Preserve Area Non-Endowment Fund (the "Fund"), per the requirements of the Property Assessment Record for the Fair Oaks Valley Preserve Area as approved by the City of Carlsbad, California dated August 2013. TSDF may receive additional irrevocable gifts of property acceptable to TSDF from time- to-time from Founder and from any other source to be added to the Fund, all subject to the provisions hereof. 2. PURPOSE Subject to the limitations of paragraph 4 below, the primary purpose of the Fund shall be to support temporary mitigation measures in the Fair Oaks Valley Preserve Area. Specifically, this fund shall support measures described in Years 1 - 3 of the Property Assessment Record for the Fair Oaks Valley Preserve Area as approved by the City of Carlsbad, California dated August 2013. Founder shall be the advisor of the Fund ("Fund Advisor"). Upon the death, incapacity or resignation of the last surviving Fund Advisor, this Fund shall be converted to an endowment fund, to be held in perpetuity and administered in accordance with the Uniform Prudent Management of Institutional Funds Act; California Probate Code Section 18501, et. seq., as amended, with the Board of Governors ofTSDF serving as the advisor of the Fund. 3. INVESTMENT OF FUNDS TSDF shall have all powers necessary or desirable to carry out the purposes of the Fund, including, but not limited to, the power to retain, invest and reinvest the Fund in any manner within the "prudent person" standard and the power to commingle the assets of the Fund with those of other funds for investment purposes, subject however, to the requirements of Sections 5231 and 5240 of the California Corporations Code. TSDF may accept investment recommendations from the Fund Advisor, if any, provided that such recommendations from the Fund Advisor shall be solely advisory, and TSDF may accept or reject them, consistent with the standards of this paragraph. 4. DISTRIBUTEES Subject to paragraph 6, principal and/ or earnings allocated by TSDF to the Fund shall be distributed exclusively for charitable, scientific, literary or educational purposes or to organizations of the type to which an individual taxpayer may make deductible charitable contributions, gifts, and bequests under the income, gift and estate tax provisions of the Internal Revenue Code of 1986, as amended, and of the Revenue and Taxation Code of California. It is intended by the foregoing that at the time a distribution is made from the Fund, the distribution must be made for a charitable, scientific, literary or educational purpose as described in, or to an organization which is described in, Sections 170( c)(1) or (2), of the Internal Revenue Code of 1986, as amended, and Section 17201 of the Revenue and Taxation Code of California. Distributions from the Fund shall be within the purposes and procedures of TSDF as contained in its Articles of Incorporation and its Bylaws. 5. DISTRIBUTIONS Distributions from the Fund may be made from income and/ or principal and shall be made at such times and in such amounts as may be determined by the Board of Governors. There shall be no requirement that income be distributed each year; income may be accumulated and added to principal. Consistent with the foregoing, distributions shall be made to such distributees of the type described in paragraph 4 as may be designated by TSDF; provided, however, that the Fund Advisor of the Fund, if any, may from time-to-time submit to TSDF the names of distributees to which it is recommended that distributions be made, which distributees shall not be other than those described in paragraph 4. All recommendations from the Fund Advisor shall be solely advisory, and TSDF may accept or reject them, applying reasonable standards and guidelines with regard thereto. Distributions shall be limited to four per calendar year. 6. CONTINUITY OF THE FUND The Fund shall continue so long as assets are available in the Fund and the purposes in the Fund can be served by its continuation. If the Fund is terminated for either of the above reasons, TSDF shall devote any remaining assets in the Fund exclusively for charitable purposes that (i) are within the scope of the charitable purposes of TSDF's 2 Articles of incorporation and (ii) most nearly approximate, in the good faith opinion of the Board of Governors, the original purpose of the Fund. 7. NOT A SEPARATE TRUST The Fund shall be subject to the Articles of Incorporation and Bylaws of TSDF. All money and property in the Fund shall be assets of TSDF, and not a separate trust, and shall be subject only to the control of TSDF. Pursuant to Treasury Regulations, the Board of Governors ofThe San Diego Foundation has the power "to modify any restriction or condition on the distribution of funds for any specified charitable purpose or to any specified organization if, in the sole discretion of the Board of Governors, such restriction or condition becomes unnecessary, incapable of fulfillment, or inconsistent with the charitable needs of the community or area served." Treas. Reg. § 1.170A- 9(f)(ll)(v)(B) and (E). 8. ACCOUNTING This Fund shall be accounted for separately and apart from other gifts to TSDF. 9. PROGRAM POLICIES Founder acknowledges that he/she has reviewed and is familiar with the attached "Program Policies" and that the Fund will be administered in accordance with such policies. IN WITNESS WHEREOF, Founder hereby executes this agreement as of the Effective Date. Founder: CWV LA COSTA LLC A Delaware Limited Liability Company By: CALIFORNIA WEST COMMUNITIES LLC, A California Limited Liability Company Its Manager By: ______ ~~~~~~~~c=~-------D~at&e~: ____ _L~~~~------­ Donald W. Fontana Managing Member Bob Kef , B · si & . AttachmenJ. The San Diego Foundation Program Policies 3 NON-ENDOWMENT INVESTMENT RECOMMENDATIONS Fair Oaks Valley Preserve Area Non-Endowment Fund Guidelines Fund balance less than $25,000: Funds with a balance of less than $25,000 shall be invested in Pool A. Fund balance of $25,000-$49,999.99: If a Fund has a balance between $25,000 and $49,999, the Fund Advisor may recommend investment in Pool A or Pool B. If, however, anticipated grants over the first 12 months of the Fund will reduce the Fund balance to below $25,000, the Fund shall be invested in Pool A. Fund balance of $50,000 and higher: If a Fund has a balance of $50,000 or higher, the Fund Advisor may recommend investment in Pool A, B or C, subject to liquidity requirements to accommodate the anticipated granting timeline. Fund Advisor Recommendation As Fund Advisor to this Fund I recommend the Fund's assets be invested in the following pool: D Pool A: Short Term Fixed Income ~Pool B: Equity and Fixed Income 0Pool C: Equity and Fixed Income (Note that Funds invested in Pool C require a 90-day advance notice for grants of $100,000 or more) Each of the investment pools above includes a money market component to allow for the liquidity needs of those funds participating in the pool. The asset allocation of Pools B and C varies from time-to-time. Information on the asset allocation of Pools B and C is available from The San Diego Foundation. I understand that assets in Investment Pools A, B & C will experience both capital gains and capital losses according to market conditions. I understand that these recommendations are advisory and that TSDF has final authority over investment of its assets. (Continued on next page) 4 CWV LA COSTA LLC A Delaware Limited Liability Company By: CALIFORNIA WEST COMMUNITIES LLC, A California Limited Liability Company Its Manager By: ________ ~_lULJ:~~Lk~~----~D~a~t~e:~ __ _t~JL~~L_ ____ _ Donald W. Fontana Managing Member REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 5 PROGRAM POLICIES 1. The San Diego Foundation. The San Diego Foundation ("TSDF") is a California nonprofit public benefit corporation exempt from taxation under Section 50 1( c)(3) of the Internal Revenue Code of 1986, as amended ("IRC"). TSDF is recognized as a public charity under IRC Sections 509(a)(l) and 170(b)(1)(A)(vi) and operates as a "community trust" under U.S. Treasury Regulations Section 1.170A-9T(f)(11). All contributions to and assets ofTSDF are subject to its Articles of Incorporation, Bylaws and Program Policies. TSDF reserves the right to modify the terms and conditions of its Articles of Incorporation, Bylaws and Program Policies at any time. 2. Donor Advised Funds. As a community foundation, TSDF may establish for its donors a "donor advised fund," which is separately identified by reference to the donor or donors. The fund is owned and controlled by TSDF and the donor or persons appointed by the donor have the privilege of providing advice with respect to the fund's investments or distributions. TSDF has final authority over the distribution of all grants from its donor advised funds, and reserves the right to decline or modify a grant recommendation that is not consistent with these policies or TSDF's charitable purposes. Gifts to a donor advised fund are irrevocable. 3. Other Funds. In addition to donor advised funds, TSDF also establishes scholarship funds (discussed below), agency funds (for the benefit of a specified charity), field of interest funds (for a specified charitable purpose) and habitat funds (to administer funds set aside to maintain ecological preserves). Gifts to these funds are irrevocable. 4. Fund Minimums. Generally, a minimum of $50,000 is required to establish an agency fund and $25,000 for all other funds. 5. Providing Grant Advice to Donor Advised Funds. Once a donor advised fund has been established and funded, the advisor(s) named in the agreement may recommend distributions to qualified charitable organizations. (TSDF staff will perform due diligence to verify that the organization is a current, qualified charity.) The following rules govern grant recommendations: a. Minimums. Each recommended grant should be for at least $250.00. b. Procedure. Unless otherwise restricted as an endowment, grants may be recommended out of the original principal, as well as accumulated investment earnings, if any. Grant recommendations can be made at any time during the year, except for designated endowment funds, which make distributions in March and/or September. Recommendations can be submitted by mail, facsimile or electronic mail. Forms and instructions for making grant recommendations will be provided upon creation of a fund, as part of an advisor orientation process. c. Grant Restrictions. The following restrictions apply to grants: i. No Indirect Benefit. Grants from donor advised funds may not be used to secure any benefit from the grantee for the donor, the advisor or any persons related to them. ii. Enforceable Pledges. Grants from donor advised funds may not be used to discharge or satisfy a charitable pledge or obligation that is legally enforceable against the donor or any other person. 111. Event Tickets. Grants from donor advised funds may not be used to pay for goods or services of value received by the donor, advisor or their family members. For example, grants may not be used to support any charitable event, including fundraising dinners, concerts, auctions, or other benefit functions when the donor would receive a return benefit, such as the benefit of being able to attend a fundraising dinner or event. 6 Further, no grants may be used to pay for any portion of a split or bifurcated disbursement to a charity. A split or bifurcated payment refers to the splitting of a payment to a charity, such as for tickets to an event, into two parts: the deductible portion and the non-deductible portion. iv. Giving to Individuals. Donors may not choose a specific individual to receive a benefit from a grant from a donor advised fund. v. Prohibited Loans & Compensation. Donors, advisors or any related parties may not receive grants, loans, compensation or similar payments (including expense reimbursements) from donor advised funds. d. Restricted Organizations and Purposes. TSDF will not approve grant recommendations that are for non-functionally integrated Type III supporting organizations; supporting organizations that provide support to organizations controlled by the donor, advisor or related persons; supporting organizations that are controlled by the donor, advisor, or related persons; private non-operating foundations; lobbying, political campaigns or other political activities; or any purpose that is not entirely charitable. e. Remedial Action. TSDF will take remedial action if it discovers that grants have been made for improper purposes. Remedial actions may include, but are not limited to, a requirement that the recipient charity return the grant and/ or termination of the donor's advisory privileges. f. Anti-Terrorism Provisions. As part of the grant review process, TSDF checks all recommended grant recipients against the Treasury Department's List of Specially-Designated Nationals, other U.S. and foreign government watch lists, and the IRS list of organizations whose tax exemption has been suspended under IRC Section 501(p). TSDF will not approve grant recommendations to organizations that appear on such lists. 6. Scholarship Fungs. Scholarship funds may have a scholarship advisory committee. All scholarship advisory committee members must be approved by the TSDF's Board of Governors prior to making the first scholarship awards and thereafter annually. The founder may participate on the scholarship advisory committee, provided that neither the founder nor the founder's designees (related parties) may chair the scholarship advisory committee or in any way control the selection process or constitute a majority of the scholarship advisory committee members. In the event the scholarship advisory committee shall cease to be in existence, the Board of Governors of TSDF shall serve as the advisor of the scholarship fund. All scholarships shall be awarded on an objective and nondiscriminatory basis using procedures that have been approved in advance by the Board of Governors of TSDF and that have been designed to ensure that all such grants meet the requirements of paragraphs ( 1 ), (2), or (3) of Section 4945(g) of the Internal Revenue Code of 1986. 7. Inco!lle and Estate Tax Deductions. TSDF does not provide any advice or assurance to its donors as to the income tax treatment of amounts deposited in a fund. Donors are advised to seek independent advice as to such income tax treatment. 8. Investments. The fund advisors for endowment funds and for non-endowment funds with assets in excess of $25,000 may recommend that the assets of the fund be invested on one of three investment pools (subject to liquidity requirements); information regarding the composition of each investment pool will be provided to the donor at the time the fund is established. Such recommendations are advisory, and TSDF has final authority over the investment of assets in its funds. 9. Fees and Costs. Each fund established at TSDF shall share a fair portion of the total administrative costs ofTSDF. The administrative cost annually charged against each fund shall be determined in accordance with the then current fee policy ofTSDF as the fee structure applicable to funds of its type. In addition, upon receipt of assets upon the death of a donor, a onetime estate fee will be assessed in accordance with the then current fee policy of TSDF. Any costs to TSDF in accepting, transferring or managing property donated to TSDF for a fund shall also be paid from such fund. 10. Provision for Governing Law. These Program Policies, all fund agreements, and any program-related agreement executed by a Donor shall be governed by California law. All gift agreements are deemed to be entered into in the State of California, and all contributions to the TSDF are intended to be administered and managed in the State of California. 7