Disclosure of Fees and/or Financial Benefits to Third-Party Participants
Fund and Investment FeesThe Community Foundation charges a management fee, according the fee schedule on all funds held by the foundation.
In addition, funds are billed quarterly for investment manager fees. At the present time, The Community Foundation contracts investment management services from the Boulder-based firm of Sargent Bickham Lagudis.
All investments of The Community Foundation are overseen by a pro-bono Investment Committee, comprised of principals in a number of local investment firms and banks. That committee conducted an extensive search, including a request for proposals and in-depth interviews, of over 20 investment managers seeking to advise the Foundation in this capacity.
Sargent Bickham Lagudis charges the Foundation a maximum of 40 basis points annually at the present time. As the funds under management hit certain milestones, that fee will go down. All funds are billed directly on a quarterly basis.
When a donor establishes a fund of $250,000 or more, he or she has the option of recommending a different investment advisor. These advisors must adhere to the Investment Policy Statement guidelines issued by The Community Foundation Investment Committee, must consent to the oversight of this committee, and may not charge more than 60 basis points annually for investment advisor services. (Current investment advisors are shown in a box on the right.) In this event, the Foundation, the investment advisor and the donor must all sign the “Items of Understanding between The Community Foundation Serving Boulder County and Investment Management Firms.”
Legal Fees
The Community Foundation has had the resource of a standing pro-bono Legal Committee. This committee is comprised of attorneys and accountants who specialize in fields including wills and estates, corporate law, real estate and transactional law, and audit accounting. This group reviews potential gifts on a monthly basis to help the foundation – and potential donors – understand the legal ramifications of a potential gift. In the event that the foundation incurs legal fees, those would generally come out of the foundation’s operating budget, and would not be billed to a donor or a donor’s fund without prior consent.
Merrill Lynch Community Charitable Fund(SM) Program
Donors to The Community Foundation through the Merrill Lynch Community Charitable Fund(SM) Program will incur the following fee schedule, excerpted from the “Merrill Lynch Community Charitable Fund(SM) Program – May 2003” Publication:
Ongoing Fee Structure:
Each donor advised fund will be assessed a 210
basis point (2.1%) total annual fee automatically
deducted on a pro-rata monthly basis (17.5 bps).
This fee will be split between the participating
community foundations (PCF) and Merrill Lynch,
110 bps and 100 bps, respectively. The PCF fee
will be used to pay the asset and fund based fees
charged by NPO Solutions (ranging from 33 bps
to 48 bps, depending on the technology option
selected) and Community Foundation Investment
Partnership (CFIP) and Community Foundations Service
Corporation (CFSC) support expense (initially
25 bps) with the remainder being available for
the PCF. The Merrill Lynch portion will be used
to cover all investment related expenses: both
for management and consulting services, as well
as for general overhead and the monthly maintenance
fee to NPO Solutions. Many of these internal fees
charged to community foundations are on an aggregated
sliding scale, which should result in increased
net revenues to individual community foundations
as the program matures. |
January 6, 2005
