FREQUENTLY ASKED QUESTIONS...
What is the purpose of the Huron Educational Foundation (HEF)?
The HEF’s purpose is to attract, aggregate, grow, and distribute private gifts of cash and equities to and for the exclusive
use of educational enhancement for the students, educators, and programs of the Huron City Schools
Who is involved in directing the HEF?
The HEF is managed by a Board of Directors made up of private citizens representing many aspects of the community including business, cultural, civic, and educational leadership. This Board has currently contracted Merrill Lynch, Sandusky, to manage its assets.
Is the Huron Board of Education and/or its Administration involved?
Yes. The Superintendent and a representative of the Board participate as ex-officio, non-voting members of a nine person board. The remainder of the Board of Directors are not associated with the school district, except that as citizens they are interested in and committed to the betterment of the Huron City Schools.
What types of things does the HEF fund?
When the HEF is funded to the benchmark where disbursements are able to be made from the earnings of its endowment, it will distribute funds on scholarships, primarily for students, but also for teachers, for any and all programs, materials, projects, and activities that will enhance teaching and learning. Funds will be distributed in response to grant applications for financial assistance. HEF funding is NOT meant to be used for usual and customary salaries and/or expenses that are the provenance of established district budgetary line items.
I was an average student in Huron who has done very well in life. Does the HEF have strict requirements for awarding scholarships that preclude average students?
Donors who establish a named donor-directed fund for scholarships are able to design their criteria into their own unique requirements. A donor may want to designate students with passing grades, or specify trade school, or not require them to be full time college students. While donors cannot select the specific recipients of their fund directly (legal requirement), donors may serve an advisory role on the selection committee.
Will these gifts reduce the taxpayers’ obligations to the schools?
No. HEF funding is intended to supplement, enhance, enrich, to complement the basic school programs already in place by providing additional educational opportunities, training, and resources that would not ordinarily be available to Huron students and programs except through private contributions.
What are the standing requirements for most of the scholarship awards in the Huron City Schools?
Today there is a lot of student need for financial assistance with post high school education. The competition for scholarship funds is growing. Huron High School personnel and scholarship selection committee members have established the following “general requirements” for scholarship awards:
Awards are made to graduating high school seniors and/or current undergraduates who are:
1.Residents of Huron City and Huron Township 2.Enrolled full-time in a two-year or four-year college or university or post high school training program in the fall after graduation 3.In the top third of their class academically 4.In need of financial aid 5.Involved as volunteers in school, community, or other extracurricular activities.
Huron students seeking HEF assistance must submit a completed scholarship grant application consisting of records of past academic, social, physical, and civic growth as well as a personal essay. Annually the Scholarship Selection Committee will individually review each application, and then as a body assess the applicants’ preparation, likelihood of success, character and need before selecting the requisite number of awards for that year.
What types of donor assets does the Huron Educational Foundation accept? What to give?
Cash, Securities, Closely-held Stock, Life Insurance, Other Assets
When choosing how to establish a fund or donate to any of the HEF Funds, there are many types of assets that can be accepted. The choice of which asset to give depends on your financial plans and the type of gift vehicle you choose.
Cash: Cash is the simplest asset to give, and there are in most cases, very favorable tax implications.
Securities: Appreciated securities (stocks and bonds) are one of the most effective assets for a charitable gift, because most often the donor will avoid the capital gains tax that would be imposed if they sold the stock and donated the proceeds.
Closely-held Stock: Stock assets in a closely-held business can be distributed by the donor, pending review and acceptance by the HEF Board of Directors.
Life Insurance: A life insurance policy can be the ideal tool for charitable giving. You may well find that you can make a much larger gift than you thought possible.
Other Assets: Other donor assets may be considered by the HEF Board of Directors.The HEF suggests that Donors discuss their giving options with their financial planner/tax accountant to determine all the donation’s tax implications.
I am considering donating money to support education. What are some of the things I should think about as I make that determination of whether to create my own charity or give to the Huron Educational Foundation?
It is good to consider the alternatives that might meet your needs without the responsibility of managing your own educational charity.
Think about the following questions:
1.How much money will you devote to this fund? (A HEF Donor Named- Directed Fund requires a $25,000 donation to establish.) 2.Will you want to continue adding to this fund? (A HEF Donor Named-Directed Fund can be added to at any time in any amount.) 3.What kind of grants do you want to make from your fund? (A Donor Named-Directed Fund can specify the criteria for distribution of grants or scholarships.) 4.What is the geographic scope of your charitable interests? (The HEF is limited to supporting Huron City School Students, Staff and Programs.) 5.In considering establishing your own charity, how comfortable would you be managing record-keeping and tax filings? 6.Do you look forward to soliciting and reviewing grant applications, site visits and grant follow-ups? Would you be comfortable
declining grant applicants?
7.How much time can you and others in your family devote to this endeavor each month? Each year? 8.How do you expect to involve other members of your family? 9.Do you want public credit for your grants? Anonymity?
10. How important is it to you that you personally manage the investments of your fund?
The HEF Scholarship Endowment Committee helps donors articulate their values and priorities, identify what causes matter to them most, craft the best giving strategy for their financial situation, and more.
I am thinking about starting a Named Donor-Directed Fund, but I am not sure how to focus my giving.
Can the HEF help me?
The HEF’s Endowment Committee can assist donors articulate their values and priorities, help to identify what causes matter most to them, help to craft the best giving strategy for their financial situation, and more. The answers to the following questions may help a donor clarify their objectives:
•What key values did you learn through life and how did they influence your attitudes about philanthropy? •What attitudes have you developed about charitable giving and who has most influenced that thinking? •How do you want to be remembered by your family and your community? •Who do you most admire in life and why? •Do you wonder how much money is "enough" for your family and how much is "enough" for your charitable legacy? •How involved do you want to be in your giving? •What causes or issues are most important to you?
Answering these questions should help you give shape to your philanthropic goals. If you are ready to create a plan that will help you achieve those goals, you can turn to the HEF Scholarship Endowment Committee for help.
We recently lost a member of our family whose focus was always on children and their futures. I want to give some money to support education in her memory, but it’s not enough to establish a donor named-directed fund. How can this donation best be directed to help kids and honor my family member?
The HEF suggests donating to the unrestricted permanent endowment in her memory. All donors will be noted in the annual report and in the Huron Educational Foundation’s permanent record. Your memorial gift will join many gifts to aggregate into a size-able investment. The earnings on this investment will be used to support scholarships, grants, programing and educational needs that will continue to give in perpetuity. (Only the growth of the fund is awarded, not the principal.) Gifts of any size are welcome to this important part of the Huron Education Foundation’s future.
I have a gift for the Foundation, but I would like it awarded in full this year to a student going into the field of nursing or medicine. Can you accept this donation into your Foundation and distribute the full amount in 2015 providing there is a suitable candidate?
Yes. The HEF has a mechanism to accept gifts to be used for educational scholarships and program support that can be distributed without going into the endowment. While our goal is to build endowments, we recognize that there are many ways to support education through our foundation vehicle. We will consider all of those options.
Who decides what projects and programs the Foundation will support?
Essentially, the Board of Director’s Disbursement Committee will decide what projects and programs will be supported at any one time. Disbursement of any funds will be done through a competitive grant application process, with the Committee weighing the merits of each application.
Where an individual or a group has established a separate fund within the HEF for a specific purpose or focus, that individual or group may assist in the disbursement of those funds for the designated purpose. Examples might be a Piano or Instrument Replacement Fund, a Robotics Lab, or for scholarships for writers or history majors. The possibilities are limitless.
How does the foundation raise its funds?
Funds are raised from individuals, corporations, businesses, other organizations and even from other foundations. Most will be within the Huron area, but others may be from outside sources and from private resources not usually used by other school and school related groups. Many of these will be alumni from around the nation, major national corporations, and other local, regional, and national foundations who support educational needs.
Are there any assurances that the Foundation will use its funds as intended and not lose funds through risky investments?
Yes, in as much as anyone can guarantee low risk when venturing into the security and bond markets. First, as a non-profit corporation, chartered under the rules of the State of Ohio, the HEF is subject to numerous requirements covering fund raising activities. Second, the HEF is granted exemption under Section 501(c)(3) of the U.S. Internal Revenue Code and subject to rules, regulations, and reporting requirements covering things as annual disbursements, conflicts of interests, jeopardy investments, restricted funds, etc. Third, in establishing the HEF investment policy with Merrill Lynch, they have been instructed to invest in a very conservative, long term growth group of assets with reliable earnings and low risk. A copy of this policy is available on line.
Are all donations tax deductible?
“Donations” are “eligible for tax deduction” in most cases, but only if Donors itemize on their Form 1040. Since 1986, those using the Short Form 1040 have been permitted to deduct charitable donations. Generally, a tax deduction can be taken for up
to 50% of a person’s adjusted gross income (AGI). In some cases, however, the full value of the contribution may be limited
by law. Each donor should check with their tax advisor in his/her own state to determine the extent of deductibility on that state’s income tax form.
Does the Foundation spend all that it earns or will it reserve money for the future?
The purpose of the Foundation is to create an endowment which will earn in perpetuity and theoretically relieve it of annual fundraising efforts. Only the earnings from investments up to a certain limit will be disbursed for scholarships or for those items awarded grants. Any earnings not expended are retained within the endowment to continue to grow, thus compounding the value of the endowment corpus.
The disbursement policy stipulates that a three year average be computed each year of earnings over and above the value of the principle invested. As earnings can be expected to vary each year, that annual computation will vary. It is the intention of the committee to disburse a portion of the earnings from the endowment funds, with any remainder retained to compound the funds’ value, according to our disbursement policy. For all other designated funds, disbursements will be made as each fund instructs, but in no case will the principle be reduced, unless the fund was originally established as a pass-through fund for a specific cause.
Do teachers have a say in how funds are disbursed?
Teachers may apply for funds for a project, field trip for students or even to take a specialty class to help them develop their curriculum. Teachers may even be asked to assist on the Disbursement Committee. The final distribution of funds must be approved by the Board of Directors of the HEF.
Can the Foundation give funds to private-schools or other organizations?
Under its state charter and federal exemption, the Foundation is allowed to disburse funds only to benefit the Huron City Schools and its students and staff. The Foundation may give scholarships to students attending private colleges or trade schools, or to an organization that may apply for grants to provide special educational events, programming or opportunities for Huron Students/Staff.
Why do we even need this Huron Educational Foundation?
Huron has been blessed with a community of education supporters. Local taxes are highest in the area. But with the State’s share of dollars decreasing, sometimes painful decisions are made that may threaten the programming that has supported the academic excellence Huron has come to expect. This Foundation has been created to provide additional opportunities for Huron’s students to more fully prepare them for their future career and workplace successes. Huron has also been the leader in innovation in education practices in the area. The HEF can help to assure that tradition continues.
Can we give to the schools directly and skip the foundation?
Yes. However the HEF provides more protection that your wishes are met as to how you want your dollars distributed. Further, our exempt status best guarantees your contributions will be tax deductible. Many businesses and organizations are prohibited from giving to public entities. Many private foundations are restricted from giving directly to public schools but not to other foundations. Finally, our Foundation provides a “focus of support.” in that we target the needs and actively seek out individuals and organizations that will support those needs.
Will the HEF fund athletic programs in the district?
The short answer is no. Huron Schools have been blessed to have a most active Booster organization and other groups that champion all aspects of the Tiger athletic programs. Of course a student athlete will be eligible for Foundation scholarships but based entirely upon his chosen field of study, past academic performance, volunteerism, and other qualifications. Athletic success will not factor into the competition for academic scholarships.