Each year, Blue Mountain Community Foundation calculates the amount available to grant from each endowed fund. The calculation is determined by the Spending Policy which is set by the Foundation’s Board of Trustees.
BMCF’s grant spending rate will decrease gradually over the next 3 years. Changing the calculation will:
- make our grant spending more sustainable over the long term in a lower investment return environment
- provide more stability in the grant amount each year
- help to protect the real value of the fund over the long term
The Available to Grant amount will be calculated for the new year by November 15, 2012. You may see the specific amount for each fund for which you are a fund representative by logging in to Donor Central, or contact the Foundation office.
How grant amounts are calculated
Previously you could calculate your grant amount by multiplying your fund balance by the spending rate:
Fund Balance x 5% = Grant Amount
The following chart details how the annual grant amounts will be calculated under the new policy.
Step A determines the average of the ending balances of the 12 quarters.
Step B applies the percentage listed to the amount in Step A.
Step C calculates a “floor” and “ceiling” based on the end date in Step A, to make sure that the amount reached in Step B is reasonable.
The floor ensures that we do not grant too little. The floor may be triggered when a significant additional gift has been made to a fund during the 12 quarter period.
The ceiling ensures that we do not grant too much in times when investments are in decline.