Frequently Asked Questions about the 5170 District Foundation
Frequently Asked Questions
FREQUENTLY ASKED QUESTIONS ABOUT THE DISTRICT 5170 FOUNDATION
Q. What is the District 5170 Foundation?
A: It is an Internal Revenue Code § 501(c)(3) nonprofit corporation that Rotary Clubs (and Rotaract and Interact Clubs) in District 5170 can use as a vehicle to hold funds intended for charitable use, pending disbursement of the funds to the intended charitable recipient.
Q. What are the benefits of a club depositing funds with the Foundation?
A: If a club does not have its own § 501(c)(3) endowment or foundation, use of the Foundation will permit the club to deposit and hold the funds with a qualified § 501(c)(3) organization, while they are being accumulated and prior to disbursement, without commingling them with other club funds. (Such commingling may jeopardize the eligibility of donors to receive a tax deduction for the donation.)
Q. Does the Foundation charge for its services?
A: No. There may be standard bank charges involved, but the Foundation’s officers and directors serve without compensation, and the Foundation does not impose any administrative fees or charges of any kind.
Q. Does the Foundation maintain separate bank accounts for each participant?
A: No. All the funds are held in either a checking or savings account in the name of the Foundation. The Foundation maintains records as to the amount deposited by each participant, and no participant may withdraw more than the amount the participant deposited (plus a pro-rata share of any interest earned on the accounts).
Q. May the Foundation disapprove intended grants by Clubs that have deposited funds with the Foundation?
A: The Foundation has a fiduciary responsibility to disapprove, and will disapprove, proposed grants that are not for valid charitable purposes, or that do not comply with the bylaws, rules, and regulations to which the Foundation is subject.
Q. Who is in charge of the Foundation?
A: The Foundation is run by its Board of Directors, which consist of five elected members, plus the District Governor, District Governor-Elect, and the immediate Past District Governor. Additionally, members of the Board of Directors will generally serve as Board Chairman, Foundation Treasurer, and Foundation Secretary.
Q. Does the Foundation maintain financial statements, and if so, how may a member gain access to them?
A: The Foundation maintains the required financial statements, which are open to inspection by all participants in the Foundation. Copies are also available to the participants in the Foundation’s Annual Meeting, which is normally held at the District Conference. Finally, the Foundation Board has recently determined that the statements should be posted on the District website.
Q. How does a club become a participant in the Foundation?
A: The club must pass a resolution authorizing its participation in the Foundation, and agreeing to observe all the bylaws and rules of the Foundation.
Q. How difficult is it for a club to withdraw funds from the Foundation, and how long does that take?
A: A club may withdraw funds at any time by written notice to the Treasurer of the Foundation. Disbursements are usually made no later than two weeks after such notice is received. However, if there is a question as to whether the funds to be withdrawn are to be used for valid charitable purposes, then the process may take longer because of the need for the Foundation Board to review the request.