Fees for management of a scholarship fund do not differ from those of any other fund at the Foundation. All expenses to the fund total approximately 1% of the average market value of each fund. Thus, with a $15,000 fund the expenses would be roughly $150 per year. This includes investment management fees, the preparation of an annual certified audit, the filing of a tax return, financial needs analysis on applicants, and all staff services provided for the fund.

WILL I BE KEPT INFORMED OF THE STATUS OF MY FUND?
Yes, the Foundation will send the donor and members of the advisory committee a semiannual statement showing the book value, market value, income and disbursements from the fund.

WHAT PORTION OF THE FUND WILL BE USED TO MAKE SCHOLARSHIP GRANTS?
For any year, spending from the fund is limited to 4.5 percent (after expenses) of the average market value (using a 16-quarter rolling average). By limiting spending in this fashion, an endowment fund keep pace with inflation. Any earnings in excess of the 4.5 percent and the 1 percent administrative fees are reinvested into the principal of the fund. As the fund's market value increases, so too will the income available for grants.

WHAT IS a SCHOLARSHIP FUND ADVISORY COMMITTEE?
Each advised scholarship fund managed by the Foundation must have a voluntary committee which meets annually to review scholarship applicants and recommend recipients. The donor can select the committee, but due to IRS requirements, the majority of the members cannot be family members of the donor. Foundation staff can assist the donor in putting together a committee. When an advised fund is established, the advisory committee also works with Foundation staff to develop promotional strategies, application forms, and selection criteria.

HOW WILL THE FOUNDATION INVEST THE ASSETS OF MY FUND?
All of the Foundation's more than 730 endowment funds, with assets nearing $400 million, are pooled for purposes of investment management, much as with a mutual fund. This permits professional management, a diversified portfolio and low management fees.

The Foundation's assets are invested in a balanced portfolio of stocks, bonds and cash equivalents. We seek growth in principal over time to preserve the "purchasing power" of each fund relative to inflation. Thus, the income generated by the fund will grow each year.

HOW ARE SCHOLARSHIP GRANTS PAID?
Typically, scholarship grants are paid directly to the school the recipient will be attending (to be credited to the student's account), not to the student. If, for any reason, the student does not enroll, the college refunds the grant to the Foundation and it is redeposited to the particular scholarship fund. In special cases (e.g. graduate fellowships or travel stipends) grants can be paid directly to students.

WHAT IS THE TAX STATUS OF THE FOUNDATION?
The Rhode Island is a public charity. Thus, unlike a private foundation, we pay no excise tax and do not have to meet the rules and regulations that apply to private foundations. All gifts to a scholarship fund are tax deductible to the extent the law allows.