by-laws€¦ · draft 3/21/2019 by-laws of lawrence public library friends & foundation article...
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By-laws (Draft 3/22/2019)
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BY-LAWS OF LAWRENCE PUBLIC LIBRARY
FRIENDS & FOUNDATION
ARTICLE I – ORGANIZATION
Section 1. The name of this organization shall be LAWRENCE PUBLIC LIBRARY FRIENDS & FOUNDATION (referred to herein as the “Friends & Foundation”). Section 2. Friends & Foundation may at its pleasure by a vote of the Board amend these by-laws.
ARTICLE II – PURPOSE
Friends & Foundation secures gifts from the community to supplement and strengthen the public’s investment in the library. To that end, Friends & Foundation shall establish, promote, maintain, endow, and render aid and assistance for the immediate and long-term needs of Lawrence Public Library through financial support, volunteer service, and advocacy.
ARTICLE III – MEMBERSHIP Membership in Friends & Foundation shall be based on financial contributions and/or volunteer hours to Friends & Foundation organization. Membership shall be open to all individuals, groups, or organizations that support the objectives of Friends & Foundation. The Board shall determine categories of membership based on different levels of financial contribution and volunteer service. Friends & Foundation members shall be notified of proposed changes to the Board, by-laws and policies in writing or by electronic correspondence, no later than one month before the Board shall vote on the proposed change(s).
ARTICLE IV – MEETINGS
Section 1. An annual meeting of the Board shall be held on a date designated by the Board. Directors and members shall be notified at least 30 days prior to the date of the meeting and encouraged to attend.
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Section 2. The Chairperson shall notify Directors and members of all regular meetings at least five (5) days previous to the time fixed for such meeting. All notices shall state the purpose thereof, and the time and place where the meeting is to be held. Section 3. A special meeting of the Board may be called at any time or place by the Chairperson or, in his/her absence or inability to act, the same may be called by any two members of the Board. By unanimous consent of the Board, special meetings of the Board may be held without the five (5) day prior notice of time or place. Section 4. A simple majority of the Board shall constitute a quorum for the transaction of organizational business, but the Directors, although less than a quorum, shall have the power to adjourn the meeting from day to day or to some future date. Every act done by a majority of the Directors present at a meeting duly held at which a quorum is present shall be regarded as an act of the Board unless a greater number be required by law or the Articles of Incorporation. Section 5. All meetings of the Board are open to the general public. The Board shall go into executive session when personnel or other confidential matters are discussed. Section 6. Members of the Board may participate in a meeting of the Board by means of conference telephone or other similar communications equipment.
ARTICLE V – BOARD OF DIRECTORS
Section 1. All corporate powers shall be exercised under the authority of the Board as stated in the Articles of Incorporation and these by-laws. The Board shall have all powers granted by Kansas law and statutes, except that the Board shall not have or exercise any power that would prevent Friends & Foundation from qualifying or continuing as an organization described in §501(c)(3) of the Internal Revenue Code of 1986 (or the corresponding provision of any future United States Internal Revenue law). The Board may make such rules and regulations covering its meetings as it may in its discretion determine necessary. Section 2. The Board shall consist of not less than nine (9) nor more than thirteen (13) Directors. Two (2) of the Directors shall be selected from the members of the Board of Trustees of the Lawrence Public Library on an annual basis. The Executive Director of Lawrence Public Library shall serve as an ex-officio Director, without voting rights. The remaining Directors shall be appointed from the standing committees, community at large and library volunteer force by the Board. Section 3. Directors shall ordinarily serve a term of three (3) years. Directors may be considered for re-election. The number of consecutive terms that a Director may serve is two. The terms of Directors begin and end on the date of the annual meeting, and shall be staggered so that Directors may be elected or re-appointed at each annual meeting of the Board.
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Section 4. Any Director may be removed, with or without cause, by the vote of two-thirds (2/3) of the Board. Section 5. Whenever a vacancy occurs on the Board, the same shall be filled without undue delay by the Board at a regular meeting or a special called meeting of the Board. The newly-appointed Director shall serve the remainder of the term, and may serve two additional three (3) year terms. Section 6. The Board shall determine, at its sole discretion, policies, procedures, and the allocation of funds and investments for Friends & Foundation. Section 7. Non-voting Directors shall not be counted for purposes of the restrictions applying to the number of Directors permitted by the by-laws as stated herein. There shall be no minimum or maximum number of non-voting Directors. Non-voting Directors are invited to attend all regularly-scheduled meetings of the Board, may have the right to engage in all matters discussed therein, but shall not be counted for purposes of a quorum pursuant to this Article IV, Section 4, nor shall such non-voting Director be entitled to exercise voting rights pursuant to Article VII herein. Section 8. There may be non-voting Directors of the Board for service in the position of Emeritus Director, or in any other capacity as may be established by Friends & Foundation. An Emeritus Director is restricted to retired or past Directors who have provided distinguished service to Friends & Foundation and Lawrence Public Library over a sustained period of time, all determined at the sole discretion of the Board. An Emeritus Director is asked to serve as an advocate for Friends & Foundation and its mission, to provide expertise and advice to the Board and staff; and for assistance and advice in fostering relationships with those providing support to Friends & Foundation. The position of Emeritus Director may be filled upon the nomination of any Director and the majority vote of the Board. There shall be no specific term for an Emeritus Director; the Emeritus Director may resign at any time, may be removed from the position in the manner provided by this Article V, Section 4.
ARTICLE VI – OFFICERS AND DUTIES Section 1. The officers of Friends & Foundation shall consist of a Chairperson, Vice-Chairperson, Secretary, and Treasurer, and such other officers as shall from time to time be designated by the Board. The office of Secretary and Treasurer may be held by the same person. Section 2. The officers shall be chosen from among the Directors. All Friends & Foundation officers shall be voted on by the Board at the annual meeting. Section 3. The Chairperson shall preside at all meetings of the Board, shall have general supervision of the affairs of Friends & Foundation, and shall see that all orders
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and resolutions of the Board are implemented. The Chairperson shall set the agenda for the meetings of the Board; request the Secretary to issue notices of meetings; appoint members to committees with the approval of the other Directors; and present at each annual meeting of the Board an annual report of the work of Friends & Foundation. Checks shall be signed by the Chairperson or Treasurer. Section 4. In the absence, disability, or under the direction of the Chairperson, the Vice-Chairperson shall be vested with all powers and perform all duties of the Chairperson, and shall have such additional powers and perform such additional duties as shall be ordered by the Board. The Vice Chairperson shall conduct an annual review of Friends & Foundation by-laws, policies, and procedures to ensure that they remain up-to-date. Section 5. The Secretary shall record the proceedings of each meeting and distribute these minutes for approval by Board members at the next called meeting; make Board- approved meeting minutes available to Friends & Foundation members; issue notice of all Lawrence Public Library Friends & Foundation meetings, except as otherwise provided in these by-laws; assist the Chairperson in conducting Friends & Foundation correspondence, thus serving as Friends & Foundation Corresponding Secretary as well as Recording Secretary; and keep records of the Lawrence Public Library Friends & Foundation’s activities and maintain Friends & Foundation files. Section 6. The Treasurer shall have custody of all monies and valuable documents of Friends & Foundation, and shall place the same for safekeeping in such depositories as may be designated by the Board. The Treasurer shall be responsible for the financial accounting of all Friends & Foundation projects which involve the collecting and/or disbursement of monies. The Treasurer shall expend the funds of Friends & Foundation as directed by the Board, taking proper vouchers for such expenditures; shall keep, or cause to be kept, a book or books setting forth a true record of the receipts, expenditures, assets, liabilities, losses and gains of Friends & Foundation; and shall, at all meetings of the Board, render a statement of the financial condition of Friends & Foundation; and cause to be filed appropriate tax returns. Copies of the financial condition of Friends & Foundation, along with an annual report, shall be presented to Friends & Foundation members and the Lawrence Public Library Board of Trustees on an annual basis. As a requirement to serve as Treasurer of Friends & Foundation, the Treasurer shall procure an appropriate bond, in an amount to be determined by the Board, from an insurer authorized to transact business in the State of Kansas. Checks shall be signed by the Treasurer or Chairperson. Section 7. No Director shall for any reason of the office be entitled to receive any salary or compensation, but nothing herein shall be construed to prevent a Director from receiving any compensation from Friends & Foundation for duties other than as Director.
ARTICLE VII – VOTING
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Section 1. The Board shall vote on behalf of Friends & Foundation organization. All votes shall be by voice at board meetings, with the exception that for the election of Officers and Directors, an anonymous written ballot may be used in lieu of a voice vote. Section 2. At any regular or special meeting any question shall be decided by majority vote and may be voted upon in the manner and style provided for in the election of officers and Directors. Section 3. Each Director shall have one vote and such voting may be done by written proxy. The Chairperson, Vice-Chairperson, Secretary, and Treasurer shall vote as Directors but shall not have additional voting power by virtue of their position as officers.
ARTICLE VIII – COMMITTEES
The Board shall establish the following standing committees: Executive, Nominating, Finance, On-Site Sales, Internet Sales, and Membership and Fundraising. The Board also may establish temporary committees as necessary to carry out the mission of the organization. Committee members shall nominate a committee chair, subject to confirmation by the Board, and establish operating procedures for their area of responsibility, subject to oversight by the Board.
ARTICLE IX– STAFF
The Board may hire an Executive Director who shall serve at the will of the board. The Executive Director shall direct the day-to-day operations of Friends & Foundation, hire and discharge all staff members under his/her supervision, and perform additional duties as assigned by the board. The Executive Director shall serve as an ad-hoc member of all committees.
ARTICLE X– AMENDMENT These by-laws may be amended by a vote of the majority of a quorum of Directors at any meeting of the Board when proper notice of such proposed amendment has been given.
ARTICLE XI – AUDIT The Board shall submit their accounts, reports, and records to an independent auditor on or before June 1, each year.
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ARTICLE XII – FISCAL YEAR The fiscal year of FRIENDS & FOUNDATION shall be January 1 through December 31. CERTIFICATE OF SECRETARY I, the undersigned, do hereby certify: (1) that I am the duly elected and acting Secretary of the LAWRENCE PUBLIC LIBRARY FRIENDS & FOUNDATION, a Kansas corporation; and (2) that the foregoing by-laws constitute the original by-laws of said corporation, as duly adopted at the meeting of the Board thereof duly held on the (date)
___________________________________________ XXXXXXX, Secretary
(SEAL)
Policies (Draft 3/21/2019)
TABLE OF CONTENTS
Standing Committee Responsibilities
Book Sales Policy
Endowment Distribution Policy
Gift Policy
Policy on Reserves and Endowment Investment Accounts
Douglas County Community Foundation (DCCF) Statement of Investment
Policy
Conflict of Interest Policy
Whistleblower Policy
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Standing Committee Responsibilities The following are standing committees of the LPL Friends & Foundation. Each committee will
appoint a representative to serve on the Friends & Foundation Board of Directors. Standing
committee Chairs also may create subcommittees as needed.
Executive Committee
The Lawrence Public Library Friends & Foundation’s Executive Committee is comprised of the
Board’s four officers: Chair, Vice Chair, Treasurer, and Secretary. This committee reports to
and is accountable to the full Board. Occasionally, the Executive Committee works in place of
the full Board. The Vice Chair will become the Chair the year following his/her term as Vice
Chair. Specific responsibilities include:
Implementation of Board policies;
Serve as a liaison with the executive director;
Initiate the Board’s efforts to set goals and a strategic framework;
Conduct Executive Director searches; and
Resolve emergencies in an organizational crisis.
Nominating Committee
The Nominating Committee is responsible for the general affairs of the Library Friends &
Foundation Board. It is comprised of the Board Chair, Vice Chair and outgoing Board members.
Specific responsibilities include:
Work with Board of directors to identify prospective new Board members;
Meet with and interview prospective Board members and recommend candidates to the
Board;
Recommend an annual slate of officers to the Board;
Oversee new Board member orientation; and
Organize training sessions for the entire Board.
Finance Committee
The Finance Committee is responsible for providing guidance, analytical support and oversight for the Library Friends & Foundation's financial matters. It is chaired by the Board Treasurer
and is composed of three individuals, including the Treasurer. At least one of the other two
members shall be a member of the Board of Directors. Specific responsibilities include:
Formulate Friends & Foundation’s finance and gift policies and procedures;
Provide support to the Friends & Foundation’s Board and staff on financial matters;
Oversee creation of the Friends & Foundation’s annual budget and present it to the
Board for approval;
Oversee the performance of the Friends & Foundation’s endowment fund assets,
recommend endowment distribution, and annually review the organization's budget and
financial statements; and
Review the Friends & Foundation’s annual audit and tax form (990).
On-Site Sales Committee
The On-Site Sales Committee is charged with planning, organizing, funding, and supervising
Friends & Foundation book sales. Specific responsibilities include:
Formulate Friends & Foundation book sale policies and procedures;
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Create an annual budget relating to staffing and book sale operations and recommend a
plan to the Board for dispersing funds to the Library;
Process donations of community donated physical goods;
Schedule volunteers to help with sale set up, cashiering, and clean up;
Promote book sales in the community;
Facilitate donations of books and other items to charitable organizations.
Internet Sales Committee
The Internet Sales Committee oversees all aspects of the Friends & Foundation internet sales.
Specific responsibilities include:
Train and oversee the work of volunteers;
Create an annual budget relating to staffing and sale operations;
Maintain the Friends & Foundation’s internet sales; and
Formulate Friends & Foundation internet sales policies and procedures.
Membership and Fundraising Committee
The Membership and Fundraising Committee is responsible for the Library Friends &
Foundation's promoting and retaining membership and overseeing fundraising. Specific
responsibilities include:
Provide recommendations to Board on membership categories and pricing;
Advise Friends & Foundation staff on membership campaigns;
Develop and schedule social activities that engage current Friends & Foundation
members;
Develop and schedule annual fundraising events and organize special receptions;
Work with Friends & Foundation staff to establish and implement a fundraising plan;
Involve all Board members in fundraising;
Monitor fundraising efforts to ensure that ethical practices are in place, that donors are
acknowledged appropriately, and that fundraising efforts are cost-effective; and
Formulate Friends & Foundation membership and fundraising policies and procedures.
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Book Sales Policy
Purpose
Book sales consist of community donations of physical goods, received with the intent to be
resold. The On-Site Sales Committee and Internet Sales Committee are responsible for
processing donations of physical goods, the sale of these donations, offering items to charitable
organizations, and the responsible recycling of donations that cannot be sold or repurposed.
On-Site Sales Committee Structure
A minimum of five (5) volunteers will make up this committee. The chair of this committee will
serve on the Board. The committee chair, or appointed substitute, will convene meetings as
necessary to fulfill the committee’s purpose and report to the Board.
On-Site Sales Committee Responsibilities The On-Site Sales Committee will set dates, plan and execute events. Committee meetings will
be held as needed to maintain the continuity and structure of the sales. Pricing, distribution, and
donations will be done at the sole discretion of the On-Site Sales Committee. The On-Site
Sales Committee will create an annual budget related to staffing and smooth operation of book
sales. The On-Site Sales Committee will recommend a plan to the board for dispersing funds in
a block grant to the Library.
Internet Sales Committee Structure
A minimum of four (4) volunteers will make up this committee. The chair of this committee
will serve on the Board. The chair, or appointed substitute, will convene meetings as necessary
to fulfill the committee’s purpose and report to the Board.
Internet Sales Committee Responsibilities
The Internet Sales Committee is responsible for maintaining an online inventory of received
donations and fulfilling off-site sales. Committee meetings will be held as needed to maintain the
continuity and structure of online sales. Pricing, distribution, and donations will be done at the
sole discretion of the Internet Sales Committee. The Internet Sales Committee will create an
annual budget related to staffing and smooth operation of internet sales.
Book Sales Staff
The On-Site Sales Committee and Internet Sales Committee can, together, fund the salary of a
Program Coordinator to support sales, operations, advertising, and volunteers on both sales
committees.
Book Sales Treasurer
The On-Site Sales Committee and Internet Sales Committee, together, appoint a treasurer
responsible for maintaining the Book Sales Fund and reporting fund balances and expenditures
to the Board monthly. The On-Site Sales Committee, Internet Sales Committee, and Book
Sales Treasurer will meet yearly to recommend a plan for dispersing remaining funds in a block
grant to the Library, subject to Board approval.
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Endowment Distribution Policy
Each year when the Finance Committee meets to review the third quarter performance of the
Library Friends & Foundation endowed funds, it will recommend distributions of up to 5% for
the following year. Projections for annual distributions will be based on third quarter performance and then adjusted when the year-end statement is received for each fund. The
Finance Committee will make these projections based on a 12-fiscal year quarter rolling average
for each fund as that data becomes available.
Unrestricted Endowment Distributions
Annual distributions from the Library Friends & Foundation's Unrestricted Endowment will
consist of up to half of the accumulated annual gain. This policy will be reevaluated once the
Unrestricted Fund reaches $2 million in assets. In years for which there is no annual gain, the
Library Friends & Foundation Board has the discretion to make a distribution based on the
needs of the Library.
Approved by Library Friends & Foundation Board this XX day of XXX
Foundation history: Adopted 2/22/16; Revisions adopted 11/28/2016 and 11/26/2018
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Gift Policy
Policy Statement
The Lawrence Public Library ("Library") strongly encourages the solicitation and acceptance of
gifts by The Lawrence Public Library Friends and Foundation ("Friends & Foundation") which
enable the Library to fulfill its mission:
LIBRARY MISSION STATEMENT
Imagine more: a place to learn, connect, create, and grow.
The Friends & Foundation accepts gifts at the discretion of a majority of the Friends &
Foundation Board of Directors, with grateful and timely acknowledgement, unless the donor
expressly requests anonymity. Gifts may be sought and/or received from any person (including
but not limited to individuals, corporations, Friends & Foundations, and federal, state and local
governments), and are deemed accepted upon deposit unless action to the contrary is taken on
behalf of the Board.
The Friends & Foundation welcome many types of gifts, as outlined in the Gifting Manual. All
gifts shall be liquidated into cash and cash equivalents for investment and use according to the
Friends & Foundation’s Investment Policy, unless a 2/3 majority of the Friends & Foundation
Board of Directors waives liquidation of a gift, in whole or in part, and sets conditions for
future liquidation.
The acceptance of each gift shall automatically serve to remove any term, condition or aspect
of the gift that in any way conflicts with the mission of the Library or the Friends & Foundation.
Nevertheless, the Friends & Foundation shall not intentionally accept any gift that conflicts with
the mission of the Library or Friends & Foundation, or their acceptance of gifts from other
donors, be they similar or different, foreign or domestic.
Gifts that may expose the Library or Friends & Foundation to adverse publicity, require
expenditures beyond the Library or Friends & Foundation's resources or involve the Library or
Friends & Foundation in unexpected responsibilities because of their source, conditions, or
purposes or are otherwise not paid in full, will be referred to the Board of Directors of the Friends & Foundation and the Library Board of Trustees. The majority votes of both of the
Boards of Library Trustees and the Friends & Foundation may withhold approval of acceptance
or terminate an agreement, pending a review by administrative personnel appointed for that
purpose.
As a general rule, neither the donor nor any person the donor designates shall have advisory
privileges with respect to the distribution or investment of amounts held in the fund by reason
of the donor’s status as a donor.
The reason for this prohibition is so that the restricted fund is not a “donor advised fund” (as
defined in Section 4966 of the Internal Revenue Code of 1986, as amended (the “Code”)). If,
notwithstanding this general rule, a donor advised fund is established, the fund administration
agreement, letter of gift, or similar agreement between the Friends & Foundation and the donor
shall include necessary prohibitions, and the fund shall be administered, such that the Friends &
Foundation is not subject to “taxes on taxable distributions” (as defined in Section 4966 of the
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Code), “taxes on prohibited benefits” (as defined in Section 4967 of the Code), or similar
excise taxes.
This gift policy does not provide legal, tax or accounting advice to donors or their
representatives. It is the sole responsibility of the donor to make those
determinations.
See corresponding Gifting Manual
Original Foundation gift policy and manual approved May 3, 2010; Amended March 28, 2011, May 29, 2012, and January
27, 2014.
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Policy on Reserves and Endowment Investment Accounts
I. General Considerations - This policy document describes the guidelines for managing and
administering the Reserves and Endowment investment funds for the Lawrence Public Library Friends and Foundation, hereafter, Friends & Foundation. The guidelines set out below are
meant to provide sufficient detail for the tasks undertaken, but are also designed to keep things
simple and flexible.
II. Definitions: Reserve Funds and Endowment Funds
A. Operating reserves - Funds set aside to cover operating expenses when cash flow is
uneven or interrupted by unexpected circumstances.
B. Capital reserves - Funds set aside for long-term purposes, not all of which need be
specifically identified, involving major capital expenditures.
C. Endowment - Funds invested permanently to increase long-term income and financial
resources.
III. Permissible Investments
A. General guiding principle - Since financial markets menus change over time, the main
feature of a permissible investment is that it has a well-established market.
B. Specific examples of permissible investments - See Sections IVB, VB and VIB below.
C. Prohibited investments and activities – The Friends & Foundation adopts the
investment restrictions set forth in the Douglas County Community Foundation’s,
hereafter DCCF, “Statement of Investment Policy Balanced Investment Portfolio.” A
copy of this document is attached. The foregoing prohibitions shall not preclude Friends
& Foundation from accepting gifts of property within these prohibited classes if the
Friends & Foundation Board of Directors determines they will be beneficial to the
Friends & Foundation, but such property shall be liquidated when permissible and
invested in accordance with this policy.
IV. Investing Operating Reserve Funds
A. Investment objectives - Safety of principal is the primary objective, liquidity is the
secondary objective, achieving maximum rates of return within those priorities is the
tertiary objective.
B. Permissible investments - For example; Including but not limited to cash equivalent securities: short-term (maturities less than one year) of: U.S. Treasury securities,
certificates of deposit (CDs) and time deposits of federally insured U.S. banks and
savings institutions.
C. Management of investments
1. Operational control - The only permissible activity is movement between the
operating reserve and the operating cash accounts. Funds may be moved by
authorized signers. The Finance Committee determines the amount necessary to
cover operating cash flow shortfalls.
2. Oversight and reporting - The Treasurer is responsible for monthly and
quarterly reporting to the Board and Finance Committee.
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V. Investing Capital Reserve Funds
A. Investment objectives - Achieving maximum rate of return while maintaining
conservative risk levels. Liquidity is the secondary objective.
B. Permissible investments - For example; including but not limited to long-term
(maturities more than one year debt securities: U.S. Treasury bonds and notes, long-
term CDs of U.S. banks and savings and loan institutions, investment grade corporate
bonds and bond mutual funds.) The Board also can invest capital reserve funds in
equities in exceptional cases where the Board feels it is appropriate.
C. Management of investments
1. Operational control - The amount of funds will be determined by the Finance
Committee and approved by the Executive Committee. Expenditures must be
approved by both the Finance and Executive Committees.
2. Oversight and reporting - The Treasurer is responsible for quarterly reporting
to the Board, and Finance Committee.
VI. Investing Endowment Funds
A. Investment philosophy - The Friends & Foundation adopts the “Basic Goal and
Approach” and “Investment Objective” sections of the DCCF’s “Statement of Policy
Balanced Investment Portfolio.”
B. Management of investments
The Friends & Foundation adopts the “Guidelines” section and its subsections of
DCCF’s “Statement of Policy Balanced Investment Portfolio.”
C. Oversight and reporting - The Friends & Foundation Finance Committee will provide
performance results to the Friends & Foundation Board of Directors on a quarterly and
annual basis.
D. Receipts of asset gifts designated for endowment investment - Gifts to the Friends &
Foundation will be accepted in accordance with the “Lawrence Public Library Friends &
Foundation Policy and Manual on Gifts.”
E. Disbursement plans - Endowment distributions will be made in accordance with the
Friends & Foundation Endowment Distribution Policy.
Adopted by the Lawrence Public Library Friends & Foundation Board on this xx day of xxx
Original policy approved by the Lawrence Public Library Foundation, February 25, 2008. Amended September 26,
2011 and January 2019.
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Douglas County Community Foundation (DCCF) Statement of
Investment Policy
Balanced Investment Portfolio
BASIC GOAL AND APPROACH
The basic goal of the investment approach of the Douglas County Community Foundation (the
“Foundation”) is for its funds portfolio to generate income and appreciate in value so as to
provide long-term growth to meet the objectives of the Foundation.
The Foundation believes that a diversified approach to portfolio management is required to
reduce volatility and prudently maximize total return for the long term (at least a 6-8 year
horizon). Total return is defined to be the result of capital gains, realized and unrealized, plus
income derived from dividends and interest. It is recognized that economic and securities
market conditions are not constant, but ever changing and, as a result, continuous portfolio
adjustments will be required in order to maintain asset productivity.
It is expected that the Investment Manager engaged by the Foundation to manage the
Foundation’s funds portfolio will manage such portfolio to seek to achieve the Foundation’s
investment objective at all times. In its investment approach, the Foundation does not desire
high risk or high volatility, which may produce large gains as well as large losses. Rather, the
Foundation seeks a more consistent approach limited to equity investments, income
investments, alternative investments, and cash instruments.
INVESTMENT OBJECTIVE
The Foundation’s overall investment orientations are income and growth with the primary
objective being to seek safety of principal. The Foundation seeks limited portfolio volatility.
The Foundation’s selection of a preservation of capital investment objective implies a willingness
to assume both a level of risk and total return less than that associated with common stocks in
general. In this regard, the Foundation anticipates that investment strategies other than equities
will generally represent a significant percentage of portfolio commitments.
GUIDELINES
The Investment Manager is given full discretion to act in accordance with the contract that
governs the relationship between the Foundation and the Investment Manager and this
Investment Policy Statement. It is understood the Investment Manager is to comply with these
guidelines and the investment portfolio will be comprised of equity investments, income
investments, alternative investments and cash equivalents, and will comply with the allocation
ranges set forth on the attached Exhibit A. These guidelines are subject to review from time to
time and the Investment Manager should feel free to recommend appropriate changes to the
Foundation for its further consideration. In the event that the Investment Manager
recommends any specific investment that would constitute a departure from these guidelines, it
shall not be undertaken without approval of a majority of the full Board of Directors of the
Foundation.
Cash Equivalent Securities
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The Foundation views investment in cash equivalent securities as a viable alternative to other
investments, as a strategy for reducing portfolio volatility, and as an alternative to a more
permanent commitment to such other strategies, depending upon the Investment Manager’s
view of the markets.
Income Guidelines
1. The targeted commitment to income investments for the overall assets of the
portfolio is set at 35%, with the understanding that an actual commitment that lies
within a range between 25% and 55% is acceptable. These limits are subject to periodic
review and adjustments, on the recommendation of the Investment Manager, with
Foundation approval.
2. Income investments shall be managed on a total return basis (combining interest
income plus/minus appreciation/depreciation) with capital preservation and current
income to help meet spending requirements as a primary objective. A secondary
objective is to provide a source of diversification for the investment portfolio, thus
seeking to dampen portfolio volatility.
3. The income allocation may include traditional income securities (i.e. domestic bonds),
other approved income classes (i.e. foreign bonds, interest rate swaps, master limited
partnerships, derivatives, etc.), or short-term securities. The Investment Manager is
encouraged to communicate such other approved income class recommendations to
the Foundation.
4. The maximum weighted average maturity (WAM) of bond holdings is not to exceed
eight years. Bond holdings should maintain an investment grade rating.
Equity Guidelines
1. The targeted commitment to equity securities for the overall assets of the portfolio is
set at 55%, with the understanding that an actual commitment that lies within a range
between 45% and 75% is acceptable. Acceptable targets and allocation ranges for
domestic (including market capitalizations) and international equities are set forth on
Exhibit A.
2. Equity investments shall be managed with capital appreciation as a primary objective.
A secondary objective is to provide a source of diversification for the investment
portfolio, thus seeking to dampen portfolio volatility.
3. The equity allocation may include traditional equity securities (i.e. domestic and
international equity) or other approved equity classes. Equity securities shall consist of
common stocks and equivalents (ADRs, issues convertible into common stock, etc.).
Issues traded on the New York, American, Over the Counter, Regional Exchanges and
foreign exchanges are appropriate. There are no specific constraints as to earnings record and dividend policy.
4. Investments in the equity securities of any one issuer shall be limited to holding not
more than 5% of total Foundation assets under management.
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Alternative Investments
1. The targeted commitment to alternative strategies for the overall assets of the
portfolio is set at 10% with the understanding that an actual commitment that lies within
a range between 0% and 15% is acceptable.
2. Alternative investments should be selected to provide the investment portfolio with
diversification through less correlated asset classes. The Foundation foresees the
possibility of using mutual funds/collective trust funds/limited partnerships that may
serve as alternatives to other investments, and understands that the Foundation would
not have any control over the management of such funds with regard to specific
guidelines and restrictions. Such vehicles may include hedge fund strategies or any other
alternative strategies the Foundation deems appropriate. The Foundation shall review
the permitted investment strategies of such vehicles prior to investing in such vehicles.
RESTRICTIONS
In addition to the above guidelines, the Foundation has set forth the following restraints:
− no direct investment in gold or other commodities
− no direct investment in real estate REITs or real estate partnerships
− no direct short sales or trading on margin
− no direct options, including puts or calls
Notwithstanding the foregoing, the Foundation foresees the possibility of using mutual
funds/collective trust funds/limited partnerships and understands that Foundation would not
have any specific control over the management of such funds with regard to guidelines and
restrictions. However, when possible, the Foundation intends to utilize funds that generally
comply with the investment guidelines stated in this Investment Policy Statement.
COMMUNICATION AND REPORTING
There is to be an open line of communication between the Foundation and the Investment
Manager.
The Investment Manager is expected to provide quarterly reports detailing all asset information
and performance results. Investment results will be evaluated and compared against
appropriate indices. All benchmarks are intended as targets only and not as an assurance or
guarantee of performance of any investment or of the portfolio. In addition to the required
written and statistical information, the Investment Manager will be available to meet with the
Foundation in person at least quarterly and more often, as appropriate.
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EXHIBIT A
INVESTMENT PORTFOLIO ALLOCATION
Target Allocation Allocation Range
EQUITY
55.0% 45.0% - 75.0%
All Cap
10.0% 5.0% - 15.0%
Domestic Equities
Large Cap 27.5% 20.0% - 40.0%
Mid/Small Cap 7.5% 3.0% - 15.0%
International Equities 10.0% 5.0% - 15.0%
INCOME / CASH 35.0% 25.0% - 55.0%
Bond and Cash Instruments 30.0% 20.0% - 55.0%
Energy Infrastructure Funds 5.0% 0.0% - 10.0%
ALTERNATIVES 10.0% 0.0% - 15.0%
Hedge Fund of Funds 10.0% 0.0% - 15.0%
13
DRAFT 2/4/19
Note: Both the Friends & Foundation adopted this policy. There is no change, other than in the name of
the organization.
Conflict of Interest Policy
The purpose of this Policy is to protect the integrity of the Lawrence Public Library Friends &
Foundation’s decision-making process. The Policy is adopted by the Friends & Foundation with
knowledge that individuals associated with the organization, either as employees or Directors,
have financial, charitable, or civic interests outside of their association with the Friends &
Foundation. Those interests may, from time to time, present a conflict for these individuals
when contemplating action necessary to achieve the stated goals of the Friends & Foundation.
This Policy is intended to determine the nature of the conflict presented, the obligation of the
person who has a potential conflict, and the procedure by which the Friends & Foundation
addresses and resolves the conflict.
For purposes of this Agreement, the term “Interest” shall mean:
A financial, civic or charitable relationship to a person or entity with which the Friends
& Foundation has or expects to engage in a transaction or arrangement. This includes,
but is not limited to, ownership, investment, income or other compensation derived
from the person or entity; a position of authority over the person or within the entity; a
familial relationship; or other manner of relationship that may reasonably affect the
decision making process of the person acting on behalf of the Friends & Foundation.
Each Friends & Foundation employee, director, Board and committee member must execute an
Acknowledgement of the duty to disclose any actual or perceived conflict of interest when
accepting that role. A copy of the form of Acknowledgment is located at Appendix A. It shall
be the obligation of the Board to obtain executed copies of the Acknowledgment for each
person affected by this Policy.
In so executing the Acknowledgment, each person shall disclose the existence and nature of his
or her financial interest to the Friends & Foundation Board, the Friends & Foundation Executive
Director or any Board member in the event of any actual or potential conflict of interest. The
Board shall thereafter accept such disclosure, investigate the nature of the conflict, and
determine by majority vote of Board members present – excepting the disclosing individual – whether a conflict of interest does or does not exist. If the vote is in the affirmative, the Board
shall carry on the business of the Friends & Foundation without participation of the individual
possessing the conflict of interest. If it is determined no conflict exists, the disclosing individual
may thereafter participate in the discussion and determination of the business of the Friends &
Foundation without encumbrance.
If an employee, director, Board or committee member has reasonable cause to believe that an
individual has failed to disclose an actual or potential conflict of interest, he/she shall inform the
individual of the basis for such belief and afford the individual an opportunity to explain the
alleged failure to disclose.
If, after hearing the response of the individual and making such further investigation as may be
warranted in the circumstances, the Board or committee determines that the individual has in
fact failed to disclose an actual or potential conflict of interest, the Board may seek to cancel
14
the action, if any, taken by the Board in connection with the failure to disclose a conflict of
interest, place the proposed action for a revote, and/or take any further action deemed
necessary upon a majority vote of the Board. This shall include possible censure, suspension or
dismissal of the individual who fails to disclose the actual or potential conflict of interest.
All disclosures, discussions, votes and remedial action, if any, shall be recorded in the same
manner as regular minutes of meetings of the Board or any sub-committee.
Adopted by The Library Friends & Foundation Board on this XX day of XXXX
15
Disclosure and Confidentiality Statement
The Library Friends & Foundation has adopted a Conflict of Interest Policy that sets forth the
duty of Friends & Foundation employees, directors and Board members to disclose any actual or potential conflict of interest related to the regular business of the Friends & Foundation. In so
adopting this Policy, the Library Friends & Foundation requires affected employees, directors and
Board members to acknowledge that in the course of their relationship to the Friends &
Foundation, the employee, director or Board member may be asked to vote on action of the
Library Friends & Foundation that presents an actual or potential conflict with an outside
interest of that employee, director or Board member. The nature of the interest is defined
within the Policy.
The Library Friends & Foundation also recognizes that during the course of an employee’s,
Executive Director’s or Board member’s involvement with the Friends & Foundation, that
employee, Director or Board member may obtain confidential information related to the
identity of donors, potential donors, and the nature of the gift the donor provides to the Library
Friends & Foundation. Other confidential information may concern the transactions,
arrangement or agreements the Library Friends & Foundation undertakes with other parties,
including the identity of those parties and the terms of the transaction, arrangement or
agreement. Protection of this confidential information is of great importance to the Library
Friends & Foundation and essential to the continued success of the mission of the Library
Friends & Foundation.
Acknowledgment
The undersigned therefore acknowledges as follows:
1. He/She is an employee, director or Board member of the Library Friends &
Foundation.
2. He/She has received a copy of the Conflict of Interest Policy and has read and
understands the provisions set forth in the Policy.
3. He/She accepts the duty to disclose any actual or potential conflict of interest as set forth in the Policy.
4. He/She agrees to be bound by the procedures set forth in the Policy and the terms of
this Disclosure & Confidentiality Statement.
_______________________________________________________________
Signature Date
16
DRAFT 2/4/19
Note: Both the Friends & Foundation adopted this policy. There is no change, other than in the name of
the organization.
Whistleblower Policy
Should any person know of, or have a reasonable suspicion about, illegal or unethical conduct in
connection with the finances or other aspect of the Lawrence Public Library Friends &
Foundation’s operations, that person shall inform the Friends & Foundation Executive Director.
If the alleged wrongdoing concerns the Executive Director, then the person shall notify the
Chair or other Friends &Foundation Board members of the concern.
Should the Executive Director, Chair, or other Board member receive such an allegation, that
person shall inform the Executive Committee. The Executive Committee shall investigate all credible allegations, at all times respecting the privacy and reputation of individuals involved.
The Executive Committee shall inform the Board if any material allegation is confirmed, or if
the Executive Committee otherwise believes that Board members should be made aware of the
situation.
The provision of information in good faith as provided above shall not be grounds for discipline
or dismissal of the reporting person.
Adopted by the Lawrence Public Library Friends & Foundation Board on this xx day of xxx
Committee Procedures Manual
(Draft 3/21/2019)
TABLE OF CONTENTS
Gifting Manual
GIFTING MANUAL Designations of Purpose Unrestricted Gifts Unrestricted gifts are used for general purposes and can be applied to current needs or investment according to the Friends & Foundation’s Investment Policy. All gifts are considered an unrestricted gift by default, unless expressly designated as a Restricted Gift and meeting the requirements of a Restricted Gift under this Policy. The Friends & Foundation Board of Directors will designate the purpose and use of such gifts. Special Purpose or Restricted Gifts A special purpose or restricted gift supports a certain purpose or program designated by the donor. The Library and Friends & Foundation appreciate all gifts, but are limited in their abilities to track and manage funds. Accordingly, a gift may be designated for a special purpose, otherwise be restricted, be endowed bearing individuals' names or otherwise be rendered discrete from unrestricted funds (collectively and individually referred to as “Restricted Gifts”) only upon the following conditions:
(1) When the present value of the gift is a minimum of $10,000. Gifts having a present value less than this amount may not be restricted or otherwise be designated for a special purpose unless three-quarters of the Friends & Foundation Board of Directors vote in favor of such restriction. A Restricted Gift in any amount may be accepted as a contribution to an existing restricted account so long as the terms and conditions of the existing fund so permit; and,
(2) The Friends & Foundation Board of Directors finds that the special purpose or restrictions meet the Friends & Foundation’s financial and other criteria.
Any necessary approvals under (1) and (2) may be provided in advance for specific actual or potential gifts. All gifts remain fully appreciated!
Donors are encouraged to recognize that over the many years following the establishment of a Restricted Gift, the needs, policies, and circumstances of the Library can change in unforeseen ways. The Friends & Foundation must have the flexibility to make use of funds in the best interest of the Library and in accord with donor interests and specifications. Thus, donors are advised to describe the specific purposes of their gifts as broadly as possible and to avoid detailed limitations and restrictions. Donors considering bequests for a specific purpose are encouraged to consult with the Friends & Foundation or its official designee. Because conditions change over time, all instruments making a Restricted Gift should contain the following contingency clause:
It is understood by all parties to this agreement that if, in the future, circumstances become so altered that the purposes and conditions under which this fund is established and administered no longer pertain, or becomes a violation of current law, then THE LAWRENCE PUBLIC LIBRARY FRIENDS &
FOUNDATION, or its successor, may use the income only / income and principal (circle one) from this gift for another purpose within the LAWRENCE PUBLIC LIBRARY that is as nearly as possible in keeping with the original intent of the donor(s).
It is further understood that if such an alternate use should ever be deemed necessary and appropriate, then it shall be designated as the ______________________ Fund.
In the event that the balance of the fund declines to a point that it becomes impractical or uneconomical to continue administering it as a separate fund, the Lawrence Public Library Friends & Foundation, or its successor, may add the balance to a different fund with a similar purpose or move it into an unrestricted fund account.
It is the intention of Donor that if Donor dies before this pledge is fully funded, then Donor’s Estate and/or Trustee would honor this commitment and complete the funding of this pledge.
Eligible gifts donated to the Friends & Foundation with an express limitation placed upon them shall be credited to the applicable restricted fund account. All other gifts, including special purpose or restricted gifts not meeting the applicable requirements for same, shall be credited to unrestricted fund accounts.
Recognitions As stated in the Gift Policy, all gifts will be gratefully acknowledged, which shall be completed in an appropriate and timely fashion. In conjunction with any capital fundraising campaign or any other special fundraising campaign, the Board may establish various gift recognition levels. The Board may delegate all or any part of such authority to the respective campaign steering committee or campaign donor recognition committee. Naming opportunities, the devotion of library space to exhibits, plaques or other recognitions, may be approved or changed only upon separate majority votes of both of the Boards of Trustees of the Library and the Friends & Foundation. Donors will be consulted before a change is considered. Types of Gifts The following guidelines have been established to facilitate the charitable giving process for the Friends & Foundation, prospective donors, and outside advisors who assist in the gift planning process. These guidelines encompass the following categories of charitable gifts:
1. Gifts of Cash 2. Gifts of Publicly-Traded Securities 3. Gifts of Real Estate, and/or Oil, Gas and Mineral Rights 4. Gifts of Closely Held Stock
5. Gifts of Tangible Personal Property 6. Other Gifts, such as life insurance, retirement plans and planned giving
Each category contains specific guidelines for the Friends & Foundation to follow when accepting such gifts. The guidelines include a general description of that type of gift, gift valuation parameters, and other gift acceptance parameters. Disposal guidelines also are included for those non-cash gifts, which are typically converted to cash to fund the donor’s charitable intentions. Gifts of Cash The Friends & Foundation accepts cash gifts by check, credit card, wire or Automated Clearing House (ACH) transfer. All checks shall be made payable to the Lawrence Public Library Friends & Foundation.
Checks should be made payable to the Lawrence Public Library Friends & Foundation. Checks are deposited within the same week of receipt. Credit cards are accepted: American Express, Visa, or MasterCard. The value of the contribution is the gross amount of the credit card charge, before fees. The Friends & Foundation may bear the fees associated with gifts received by credit card and the donor will receive the full value of the donation. Wire transfers may be acceptable upon approval of the Friends & Foundation. The value of the contribution is recorded as the gross amount wired, before fees. The Friends & Foundation will bear the fees associated with any wire or ACH transfers made to accomplish a gift. Gifts via Payroll Deduction, if allowed, will be accepted for charitable gifts made to the Lawrence Public Library Friends & Foundation.
Gifts of Publicly-Traded Securities Gifts of publicly-traded securities can be accepted in the following manner: Common or preferred stocks, restricted stock, or mutual funds.
A. Common or Preferred Stock of a publicly-held company can be traded on a public stock exchange. These stock contributions will be valued by taking the average of the high and low quotes on the date the gift is received by the Friends & Foundation. The gift may be received in one of three ways. (1) The donor may hand deliver the stock certificate to the Friends & Foundation, or (2) The donor may transfer the stock to the Friends & Foundation via brokerage firm, or (3) The stock may be transferred to the Friends & Foundation on the books and records of the corporation.
(1) If hand delivered, the following documentation is needed from the donor:
Stock certificate
Letter of authorization from donor gifting stock to the Lawrence Public Library Friends & Foundation
Signed stock power if the certificate is made out in the name of the donor. This is not needed if the certificate is made out to the Lawrence Public Library Friends & Foundation.
Disclaimer if the certificate is in the name of a Trust, in which case it must be signed on the customer signature line and notarized.
In order to sell the stock, the following information must be completed:
Stock power must be signed by an officer able to sell stock in the name of the Lawrence Public Library Friends & Foundation
Dated corporate resolution
Letter to broker
(2) If transferred via a brokerage firm, the Friends & Foundation will send its wire transfer instructions to the donor. The Friends & Foundation may need to set up a separate account in its own name at the brokerage firm. In order to do so, the following information must be provided to the brokerage firm:
Tax identification number
New account set-up form signed by authorized Friends & Foundation personnel. New account form will include names of the Friends & Foundation staff authorized to execute the account on its behalf.
Signed corporate resolution
Signed IRS form W-9
(3) If transferred on the books of the corporation, the Friends & Foundation staff will work with officers and transfer agent of issuing corporation to ensure timely and accurate transfer of gift.
Once the stock has been transferred to the Friends & Foundation account, it will be sold by the close of business on the next trading day, unless resolved otherwise according to the terms of this Policy. The cash proceeds from such a sale will be invested and used according to the Friends & Foundation’s Investment Policy.
B. Restricted stock is also publicly-traded stock, but a ruling by the Securities and
Exchange Commission has placed certain restrictions on its sale. There are three types of SEC restrictions:
(1) Rule 144 stock for securities not registered with the SEC, and have been acquired from the issuing corporation or from a control person (officer or major stockholder).
(2) Rule 145 stock for securities not registered with the SEC that have been acquired through substitution of one security for another through reclassifications, mergers, consolidations, etc.
(3) S-3 stock for securities that have been registered with the SEC through short-term filings, typically for shelf registrations.
If restricted stock shares are being donated to the Friends & Foundation, a qualified appraisal will be necessary to value the contribution. Refer to the Common or Preferred Stock procedures above for hand-delivery for brokerage firm options for accepting restricted stock. The type of restriction and the particular stock will determine the length of time
necessary for the stock to be sold. Authorized Friends & Foundation staff will work closely with the brokerage firm to ensure the stock has been sold in a timely manner to mitigate market risk.
C. Mutual Fund Shares represent an investment of pooled securities selected by
investment professionals. Contributions of mutual fund shares will be valued at the net asset value as of the close of business on the date of the gift. Mutual fund shares will be accepted by the Friends & Foundation by transfer via brokerage firm. See above Common or Preferred Stock procedures for acceptance of shares at brokerage firm. Once the mutual fund shares have been transferred into the newly created Friends & Foundation account, they should be sold within the guidelines adopted for disposition of individual securities.
Gifts of Real Estate, and/or Oil, Gas and Mineral Rights Contributions of real estate will be accepted on a case-by-case basis, as recommended by the Friends & Foundation Board or its official designee. In each case, the benefits of accepting a gift will be weighed against the risks associated with accepting, holding or disposing of a gift. Because of the specialized nature of these gifts, who will bear costs associated with making the gift will be decided on a case by case basis. The factors to be reviewed include: 1. The usefulness of the property for Library purposes; 2. The marketability of the property; 3. The existence of restrictions, reservations, easements, and/or limitations; 4. The existence of encumbrances such as mortgages and mechanic’s liens;
5. Carrying costs, such as property owner's association dues, taxes, insurance, and other maintenance expenses;
6. Fair market value in relation to the costs and limits listed above as determined by a qualified appraisal conducted in accordance with Internal Revenue Service ("IRS") standards;
7. The existence of any environmental risks; and 8. Other factors deemed relevant by the Friends & Foundation. Prior to the Friends & Foundation’s acceptance of gifts of real property, an assessment of potential environmental risks will be conducted. This assessment shall include, but not be limited to, the following:
1. An inquiry of the present owner regarding his, her, or its knowledge of the history of the property;
2. A title search to determine who the prior owners might have been; 3. A consultation with federal, state, and local environmental agencies to find
out whether the property has any history of hazardous waste contamination;
4. A visual inspection of the property for any evidence of environmental hazards; and
5. A Phase I environmental audit conducted by a professional service, if deemed appropriate by the Friends & Foundation, the cost of which shall be paid by the donor.
For all gifts of real estate, the Friends & Foundation Chair, or official designee, shall consult with legal counsel concerning the implications of accepting the gift. The decision to accept gifts of real estate requires approval by a majority of the Friends & Foundation Board at a duly called meeting, and rests with the discretion of the Friends & Foundation. Closely Held Stock Donors should obtain a stock power from their banker or broker, signing their name exactly as it appears on the certificates, and have their signature guaranteed by a member of the medallion group. The Friends & Foundation should be designated on the stock certificate(s), stock power, or related instruments of transfer as The Lawrence Public Library Friends & Foundation. Shares of stock in closely-held companies, bonds, and government issues may be given by delivering the certificate and an executed stock power for each separate issue of stock or bond to Friends & Foundation representatives. Gifts under this section are not accepted until approved by a majority of the Friends & Foundation Board at a duly called meeting. Tangible Personal Property The Friends & Foundation may accept gifts of tangible personal property, if the property is readily marketable or useful to the Library in a manner consistent with its purposes. Contributions of personal property and other customized gifts will be accepted on a case-by-case basis, as recommended by the Friends & Foundation Board or its official designee. In each case, the benefits of accepting a gift will be weighed against the risks associated with accepting, holding or disposing of a gift. Because of the specialized nature of these gifts, who will bear costs associated with making the gift will be decided on a case by case basis. Even if the Friends & Foundation Board votes to use rather than liquidate the gift, the donor should be informed that IRS rules will probably limit the amount of the charitable deduction to the donor's cost basis. Whenever donors estimate their gifts of tangible personal property at $5,000 or more, they must provide the Friends & Foundation with a written appraisal by a qualified independent appraiser. The Friends & Foundation cannot appraise or assign valuation to gifts of tangible property. The Friends & Foundation may accept in-kind gifts such as equipment, supplies and contract services or professional services. For all gifts of personal property, the Friends & Foundation Chair, or official designee, shall consult with legal counsel concerning the implications of accepting the gift. The decision to accept gifts of real estate requires approval by a majority of the Friends & Foundation Board at a duly called meeting, and rests with the discretion of the Friends & Foundation. Other Gifts Gifts of Life Insurance
Life insurance can be the medium for giving funds to the Friends & Foundation. A donor may name the Friends & Foundation as beneficiary of a new or existing life insurance policy. In the case of an existing policy, the donor would need to rename the LPL Friends & Foundation as beneficiary of the policy. At that time, the cash surrender value of the policy would be the value of the gift, which may then be eligible for a tax deduction by the donor. The donor may irrevocably assign to the Friends & Foundation an existing life insurance policy, making the Friends & Foundation both the policy owner and the beneficiary. If the donor does not choose to continue paying the premiums on irrevocably assigned policies, the Friends & Foundation may elect to:
Continue paying the premiums and receive the full face value of the policy at the donor's death;
Convert the policy to paid-up insurance in a reduced amount with no further payments; or
Surrender the policy for its present cash value. To help ensure proper acceptance and to mitigate risks associated with the acceptance of life insurance policies, the following procedures are to be followed:
(1) Obtain documentation to ensure that the Friends & Foundation is named as beneficiary of the policy.
(2) Obtain documentation to determine whether the Friends & Foundation is irrevocably named as beneficiary.
(3) Ensure that adequate cash is available within the fund to pay future insurance premiums, if the Friends & Foundation chooses to pay such premiums.
(4) Review rating of insurance company. (5) Understand and thoroughly document term and other details of
insurance policy. (6) Review status of named beneficiary, policy and insurance company on
an annual basis. The Friends & Foundation shall cautiously evaluate paying the premium on an insurance policy in which it is not irrevocably named as beneficiary on a case-by-case basis. Retirement plans Retirement plans represent a potentially significant asset that may be subject to estate taxes upon death. Similar to life insurance policies, it is possible for an individual to name the Friends & Foundation as beneficiary of the retirement plan assets upon death of the donor. In this case there would be no immediate tax deduction to the donor, but the donor’s estate could avoid significant estate taxes on the amount of the gift transferred to the Friends & Foundation. To ensure proper acceptance and to mitigate risks associated with the acceptance of retirement plan interest, the following procedures should take place throughout the gift acceptance process:
(1) Obtain documentation to ensure that the Friends & Foundation is named as beneficiary of the retirement plan.
(2) Review rating of company where retirement plan assets are held. (3) Understand and thoroughly document term and other details of retirement
plan interest. (4) Review status of beneficiary and retirement plan interest on an annual basis.
Planned Giving Planned gifts involve the transfer of substantial assets that affect the distribution of the donor's estate. These gifts do not immediately confer institutional ownership and generally are not taken out of current earnings. The Friends & Foundation will serve as sole trustee of any deferred gift that requires the appointment of a fiduciary, but reserves the right to delegate and/or designate that authority. Acceptable methods of creating deferred gifts to the Friends & Foundation are described below. A. Bequest in Will A bequest is a gift of any amount or form made to the Friends & Foundation in a donor's will. Bequests may provide for a specific dollar amount in cash, specific securities, specific articles of tangible personal property, or a percentage of the residue of the estate. Bequests may be given as unrestricted or restricted gifts subject to the conditions of this Gift Policy. Among donors' options are residuary and contingent bequests. A residuary bequest will give the Friends & Foundation all or a portion of the estate after all debts, taxes, expenses, and all other bequests have been paid. A contingent bequest will ensure that, despite unforeseen circumstance, specified property will pass to the Friends & Foundation rather than unintended beneficiaries. Donors may also establish, by will, an annuity trust or unitrust. The bequest can be arranged so as to provide a life income for a designated beneficiary by directing that the bequest be used to establish a charitable remainder annuity trust or charitable remainder unitrust. If such a gift is made by will, the principal will pass to the Friends & Foundation only after the death of the life income beneficiary.
B. Charitable Remainder Unitrust The primary feature of a charitable remainder unitrust is that it provides for periodic payment of income to the donor, or another person specified by the donor, for life or a specified term of years, after which the trust assets pass to the Friends & Foundation. During the lifetime of the donor, he or she creates a formal trust agreement under which assets such as cash, appreciated securities, or both, are irrevocably transferred to a trustee who then pays the donor, or a person specified by the donor, an income for life or a specified term of years. During the donor's lifetime, the trust assets are managed and invested by the trustee as a single fund. The donor cannot borrow or otherwise deal with the trust assets. The donor or person named by the donor receives payments based on a fixed percentage of the net fair market value of the trust as valued annually. Upon creation of the unitrust, the donor determines the fixed percentage, which may not be less than five percent. Donors may make subsequent additions to the unitrust during their lifetimes or by bequest upon their deaths. C. Charitable Remainder Annuity Trust The annuity trust shares many common features with the unitrust, the principal difference being the manner used to calculate the payment to the income beneficiary. Whereas the unitrust provides for a payout that varies with each annual valuation, the annuity trust provides for fixed payments based upon the fair market value on the date the trust is established. Another difference is that additional contributions cannot be made to an annuity trust. The donor during his or her lifetime irrevocably transfers assets to a trustee, who pays the donor or another person a fixed dollar amount annually for life. The trust can also provide income for the donor's survivors for life; however, at the end of the term the trust assets become the sole property of the Friends & Foundation. D. Charitable Gift Annuity A charitable gift annuity is a contract between the donor and the Friends & Foundation, whereby in exchange for donor’s cash or property, the Friends & Foundation agrees to make fixed payments to one or two annuitants (beneficiaries) for life. Unlike the charitable remainder trust that looks only to the trust corpus for its payments, the charitable gift annuity payments are backed by the entire assets of the Friends & Foundation. The charitable gift annuity is designed to assist a donor who would like to benefit the Friends & Foundation, but who does not desire to give up the income those available assets would produce.
E. Charitable Lead Trust The primary feature of a charitable lead trust is that it provides for the immediate support of the Friends & Foundation through income generated by the assets in trust for a set period of time, after which the assets pass to a non-charitable beneficiary such as the donor, the donor's children, or other persons the donor specifies. Thus, a charitable lead trust is conceptually the opposite of a charitable remainder trust. In a lead trust, the donor gives the Friends & Foundation the current economic benefit of the transferred assets and retains the right to reacquire possession and control of the assets at a future date. The donor during his or her lifetime creates an irrevocable trust agreement for a period of ten years or more. The agreement may take effect during the donor's lifetime or be part of the donor's will. Assets are transferred to a trustee, with the stipulation that the income from the assets be paid to the Friends & Foundation for the life of the trustee, after which the principal or corpus of the trust reverts back to the donor or others of his or her choosing. A lead trust may be advantageous for donors who have a larger income than they currently need and who desire to transfer assets to heirs. F. Remainder Interest in Personal Residence or Farm A donor can give a remainder interest in a personal residence, such as a home or condominium, or a farm to the Friends & Foundation. The donor or other occupants may continue to occupy the residence or operate the farm without disruption for the duration of the donor's life. Thereafter, the residence or farm will either be sold or used by the Friends & Foundation for purposes specified by the donor, if any, if in accordance with this Gift Policy. The procedures for evaluating proposed gifts of real property, as outlined in this Gift Policy, also apply to gifts of a remainder interest in real property. If a life estate is retained in the property, expenses for maintenance, real estate taxes, and any indebtedness relating to the property must be borne by the donor. Gifts-in-Kind The Friends & Foundation may accept gifts-in-kind (e.g., gifts of professional services), provided, however, that prior to acceptance, the Board must agree in writing with the donor as to the value of such gift-in-kind. The Board must approve each gift-in-kind and verify that such gift-in-kind is in the best interests of the Friends & Foundation. Legal, Tax and Accounting Aspects of Giving Nothing in the gift manual should be taken as advice about the legal, tax or accounting aspects or benefits of any gift. It is the sole responsibility of the donor to make those determinations.
Donor Confidentiality Information regarding all individual, Friends & Foundation, corporate and association gifts shall not be considered confidential, unless the donor expressly requests confidentiality. Final Approval, Acceptance, and Execution by the Friends & Foundation Documents effectuating the acceptance of all gifts, the creation of endowment programs, and the transfer of real or tangible personal property to the Friends & Foundation, must be approved by Friends & Foundation legal counsel and executed by the authorized Friends & Foundation official. Documents shall be executed in duplicate, and the donor and the Friends & Foundation shall each retain an original of the documents. Supplements to Gift Policies From time-to-time, the Friends & Foundation Board may supplement these gift policies through formal action. Any such supplements have the same force and effect as set forth in this document. See corresponding Gift Policy Adopted by the Lawrence Public Library Friends & Foundation Board on this xx day of xxx Original Foundation gift policy and manual approved May 3, 2010; Amended March 28, 2011, May 29, 2012, and January 27, 2014.