Does your ASHRAE chapter have a scholarship fund? Are you concerned about the investment and oversight of those funds set aside for scholarships? The ASHRAE Foundation may have a solution to your Chapter's problem.
The ASHRAE Foundation will take over investment management of Chapter scholarship funds. Your Chapter can retain the right to continue to select the scholarship recipients without the headaches associated with investing your Chapter's scholarship funds.
Here is how the program works. A Chapter enters into an agreement with the ASHRAE Foundation. The agreement describes the assets to be transferred to the Foundation. This is an irrevocable transfer, the Chapter can't get the money back. However, the agreement allows the Chapter to retain the right to designate how the annual distributions from the fund are to be used. The funds can only be used for the tax-exempt purposes of the Chapter.
The Chapter can specify the same scholarship selection criteria that it is already using in the Agreement with the Foundation. The Chapter must adhere to the general guidelines on scholarship recipient qualifications that are used by ASHRAE's Scholarship Trustees. These guidelines require that there be no discrimination in the selection of scholarship recipients. There cannot be any private benefit to an ASHRAE member in the selection process. Most Chapters adhere to similar guidelines already. (Keep in mind that a Chapter could also transfer the selection process to ASHRAE's scholarship trustees and still have the scholarship awarded in the Chapter's name and be consistent with criteria set by the Chapter.)
In general the program guidelines require the recipient to attend an institution that has an active ASHRAE student branch, the degree program is accredited by the Accreditation Board for Engineering and Technology in the United States and the student must have a grade point average of at least 3.0. Once again, most Chapters have similar selection guidelines in place already.
The Foundation uses Oakbridge Partners as its asset manager. https://www.oakbridgepartners.com/. The Chapter's scholarship funds are managed by Oakbridge consistent with the Foundation Board's investment policy. The Chapter benefits from the Foundation's professional money managers. Once the Chapter has finalized its gift and the Foundation Trustees accept the scholarship, the Chapter can electronically transfer the funds to the Foundation.
The Foundation invests its endowment for the best total return. Each year the Foundation distributes 5% of the Chapter's endowed principal to the scholarship recipient. The minimum amount to establish an ASHRAE Chapter awarded scholarship is $60,000. If a Chapter were to transfer $60,000 to the Foundation, the annual award for the scholarship would be $3,000.
Typically upon the death of you and your spouse, the proceeds from the life insurance trust are paid to your heirs and replace the property that passes to ASHRAE Foundation from your life income gift. Because the life insurance policy is owned by the life insurance trust, the gift to your heirs is generally not subject to estate or gift taxes.
A Chapter awarded scholarship should be awarded each year by September 1st since this is the beginning of the academic year for most students. The Chapter can manage the publicity and recognition of scholarship recipients in the same manner they are currently using.
