The Community Foundation of Southern New Mexico
Agency Endowment Agreement
THIS AGREEMENT is made as of the __ day of ___, 200_, between ** ("the "Agency"), a corporation established under the nonprofit corporation law of the State of New Mexico, with the principal office located at _________________, and The Community Foundation of Southern New Mexico (the "Foundation"), a corporation organized under the nonprofit corporation law of the State of New Mexico, with its principal office located at 301 South Church Street, Las Cruces, NM 88001.
WHEREAS, the Parties to this Agreement have a common interest in the welfare of the southern New Mexico communities and in serving charitable, scientific or educational purposes for the benefit of the southern New Mexico community;
WHEREAS, each Party is a qualified charitable organization (as defined in paragraph 7); and
WHEREAS, the Foundation has been established with a principal purpose to receive and administer funds as endowments for various charitable, scientific or educational purposes and organizations in the southern New Mexico community, various interested persons have expressed a desire to establish a fund in the Foundation in the nature of an endowment to provide current income and long-term protection for the operations of **, and the agency wishes to have the benefits of such a fund.
NOW, THEREFORE, the Parties agree as follows:
1. Establishment of the Fund. A fund shall be established on the books of the Foundation and shall be known as the ** Fund ("Fund"). The Foundation acknowledges receipt of the initial property of the Fund.
2. Property of the Fund. The Fund shall include the property received with the execution of this Agreement, such additional property as may from time to time be transferred to the Foundation by ** for inclusion in the Fund, such additional property as may from time to time be transferred from any other source for inclusion in the Fund and accepted by the Foundation, and all undistributed income from the foregoing property. The Fund shall be the exclusive property of the Foundation, held by it in its corporate capacity, and shall not be deemed a trust fund held by it in a trustee capacity. The Foundation shall have the ultimate authority and control over all property in the Fund, and the income derived from it, in accordance with the Articles of Incorporation and Bylaws of the Foundation (as they may be amended from time to time), and the term of this Agreement, applied in a manner not inconsistent with said Articles and Bylaws.
3. Designation of Purpose. The Fund shall be used for support of the charitable, scientific, or educational purposes of ** and its affiliated agencies (if any).
4. Distributions of Income. Distributions from the fund shall be in accordance with the Investment Policy established by the Board of the Foundation and shall be paid and distributed at least annually, or more frequently, as the Parties may from time to time agree.
5. Other Distributions. In transferring its property to the Fund, ** intends to create a permanent endowment. However, distributions in excess of the amount dictated by the application of the Foundation's spending policy may be made to ** in any year as determined by the Board of the Foundation provided one of the following conditions is met: (1) the distribution is for the purpose of enabling ** to acquire or renovate a capital asset; (2) ** is faced with unexpected financial needs that are not likely to recur. However these conditions are not binding on the Foundation.
6. Exercise of Variance Power
(a) The Foundation shall promptly notify ** of any decision made to exercise the variance power. Notification of the exercise of the power shall be delivered in writing to the last known address of ** within 10 days following the Board's decision. The Foundation shall also notify the Agency if it becomes aware of any other action instituted or proposed by any person to vary the purposes, uses or method of administration of the Fund.
(b) If the Foundation ceases to be a qualified charitable organization or if the Foundation proposes to dissolve, the assets of the Fund shall, after payment or making provision for payment of any liabilities properly chargeable to the Fund, be distributed to **. If ** is not then a qualified charitable organization, said assets shall be distributed in such manner and to such organizations in the southern New Mexico communities as satisfies the requirements of a qualified charitable organization and serves purposes similar to those of **.
7. Definitions and Construction.
(a) As used in this Agreement:
(1) "Qualified charitable organization" means an organization described in section 501(c)(3), which is other than a private foundation under section 509(a) of the Internal Revenue Code.
(2) References to any provision of the Internal Revenue Code shall be deemed references to the U.S. Internal Revenue Code of 1986, as the same may be amended from time to time, and the corresponding provision of any future U.S. Internal Revenue Code.
(b) It is intended that the Fund shall be a component part of the Foundtaion and that nothing in this agreement shall affect the status of the Foundation as an entity that is a qualified charitable organization. This Agreement shall be interpreted in a manner consistent with this intention and so as to confirm to the requirements of the Internal Revenue Code and any regulations issued pursuant thereto applicable to the intended status of the Foundation.
