Each year the SAA Foundation may make available for distribution a portion of the income from its investments for grant-making purposes. The total income available is realized on the dividends, interest, and contributions to the unrestricted funds that are available to the SAA Foundation.
The SAA Foundation Board of Directors will determine annually the percentage of income, or payout rate, to be distributed from its unrestricted funds. The annual payout percentage will be clearly stated for the benefit of Board members and donors. The Board may award money that has been set aside by this distribution.
The Board agrees to a standard formula for a payout rate that is relatively unchanged. The predictability of a standard payout rate provides the Board with planning assumptions and reasonable expectations for funding a grant program. An important consideration is that a conservative payout rate will allow a higher capital accumulation of the investment pool in the long term. To preserve the purchasing power of the invested funds, a range between 4 and 7% is typical, with a convergence at 5.5% on average for long-term preservation of the principal.
The Board agrees that a 5.5% payout rate is advisable in the first year of implementation (i.e., FY 2015). In accepting a 5.5% rate in the first fiscal year, the Board understands that it may:
Funds available for distribution in the SAA Foundation grant program will be identified in the financial statements along with the performance of and returns on investments. Interest on funds that are restricted and/or under the management of SAA [the 501(c)(6) corporation] are not available for distribution. The SAA Foundation may also control restricted funds set aside for special purposes, such as the National Disaster Recovery Fund for Archives, which are governed by separate rules.
To apply for an SAA Foundation Grant, please see the Application Process and Guidelines.
Adopted by the SAA Foundation Board of Directors, March 14, 2015