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Chapter Specific Funds are:

• an excellent recruiting tool to be able to say that your chapter gives a scholarship to deserving recipients
• an excellent way for an alumnus to contribute to the leadership of his own chapter
• an excellent way to create a scholarship or fellowship to encourage undergraduate or graduate study in a specified discipline (medicine, science, humanitites, law, etc.)
• an excellent way to recognize outstanding leaders permanently (by naming a fund for a founder or an outstanding alumnus, for example)

Advantages of having a fund with the Foundation: 

• investment managment, continuity, and administration
• all accounting and bookkeeping is done by the Foundation
• the Foundations' Board of Trustees oversees general operation of all the funds
• the Foundation utilizes a professional manager to invest the assets of the Foundation, which include the general funds of the Foundation, endowments, various restriced funds, and all of the individual chapter funds
• the Trustees set the annual amount of investment proceeds available for awards based on market performance and three-year average fund balance. 
• the Foundation is qualified by the Internal Revenue Service as a 501(c)(3) Foundation, so contributions are tax deductible.

Scholarship - rewards for academic and extra-curricular achievement and excellence.

 

Leadership - underwrite some tuition costs for some educational programs like the SigEp

Leadership Continuum, UIFI sponsored by the National Interfraternity Conference and other educational campus and community leadership programs.

 

Housing - building and maintaining educational space may be able to be funded by tax-deductible donations, depending on legal review for tax code regulations; SigEp Residential Learning Communities make the most of this opportunity.

Endowment

• the principle of this type of fund grows over time
• delivers annual proceeds for awards - when a chapter’s endowment fund has a balance of $2,500 or more, that chapter can use the annual return for scholarships and leadership awards
• the amount of annual proceeds available is set by the Foundation Trustees based on market performance and policies of similar higher education foundations -  For 2009, 4.5% of funds were available for endowment funds
• the fund is perpetual, delivering proceeds every year
• the challenge is that it takes a significant balance to deliver significant proceeds

 

Direct

• the principle of this fund is available for award, but it does not deliver annual proceeds
• the benefit is having greater proceeds available earlier than an endowment
• the challenge is that without constant fundraising the award amount could drop or disappear quickly
• Direct funds are not invested due to their temporary nature.

Endowments are recommended to ensure the long-term viability of chapter initiatives. However, because some chapters have immediate needs and a working fundraising program or a couple of generous alumni, Direct funds can be useful. There are also periodic needs that could best be handled with a Direct fund.

 

The Foundation staff works with alumni corporations to establish the best mix of fund types. The goal is always to have 100% Endowment funds.

Establishing a Fund

Any recognized unit of the Fraternity can start a fund.  This includes an undergraduate chapter or its Alumni Volunteer Corporation (AVC) or any member.  The chapter's AVC must approve of each fund established through the signature of the AVC President.

Step 1:  Deciding on a name for the fund.  This is an excellent way to honor an outstanding alumnus or chapter brother (i.e. the Ernest W. "Pop" Long Scholaship Fund for the Indiana Delta Chapter), or the fund may be designated simply by the chapter name (i.e. The Ohio Theta Scholarship Fund).

 

Step 2:  Establishing a working agreement.  All funds require a working agreement be established between the chapter's alumni corporation and the Foundation. This formal documentation determines the purpose, qualifications and process for the fund(s). Click template for the working agreement template.

 

Step 3:  Raising money to establish the fund.  A minimum of $2,500 is necessary to start making awards.  To designate awards from your fund in honor of someone, the balance of the fund must be at least $5,000.  This is to ensure a meaningful scholarship is made as an honor award.  Projects of the chapter or an alumni campaign are the two most common fundraising techniques.  Your are limited only by your creativity.  Contributions to the Sigma Phi Epsilon Educational Foundation are tax deductible.

Making Awards

Selecting Recipients -- When the fund is established, the "working agreement" includes the general selection criteria and procedure, the amount of each award, and when it is to be presented.   The Trustees of the Sigma Phi Epsilon Educational Foundation encourage the chapter and AVC to determine the recipients of a chapter's scholarship.  An alternative procedure is to have applicants evaluated by the Scholarship Awards Committee of the Foundation at the time they are evaluating applicants for the National Competition Scholarships.

 

Timing of Awards -- Generally, selection is made in spring, and the awards are presented in September.  Some awards from chapter funds are offered at other times during the year, depending upon the working agreement.  Arrangements can be made for timing the awards to meet the wishes of the chapter or donor.

 

Amount of Scholarships -- The amount depends upon the balance in the fund.  Awards are made on a total return basis at a level established by the trustees annually.  For example, at 5% a $2,500 fund will provide a $125 award.  The larger the fund, the larger the amount that is available for awards.