Citations Affected: IC 30-2-12.5.
Synopsis: State grants to community foundations. Provides state
donations and matching grants to community foundations. Appropriates
$1,000,000 from the state general fund for distribution to the
permanent endowment of community foundations in each county, with
income from the investment of 25% of the money to be used for
purposes of community scholarship foundations (such as Dollars for
Scholars organizations) and 75% to be used for the general charitable
purposes of the community foundation. Provides for administration by
the treasurer of state with assistance from an organization that assists
community foundations. Provides various methods of allocating money
that is not claimed by an eligible community foundation.
Effective: July 1, 2001.
January 18, 2001, read first time and referred to Committee on Education.
A BILL FOR AN ACT to amend the Indiana Code concerning
community organizations and to make an appropriation.
ADDED TO THE INDIANA CODE AS
A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
Chapter 12.5. State Matching Grants for Community Foundations
Sec. 1. As used in this chapter, "community foundation" refers to a community foundation established in Indiana under IC 30-2-12.
Sec. 2. As used in this chapter, "community foundation share" means the total amount of money that one (1) community foundation is entitled to receive under this chapter.
Sec. 3. As used in this chapter, "community scholarship foundation" means an organization that meets the following criteria:
(1) Is a nonprofit organization described in Section 501(c)(3) of the Internal Revenue Code and is exempt from taxation under Section 501(a) of the Internal Revenue Code (or meets
this criteria through affiliation with a state or national
organization that meets this criteria).
(2) Is formed for the purpose of providing scholarships for students to attend institutions of higher education. The organization may provide academic support for residents of the community served by the organization.
(3) Solicits broad based community support for the organization's academic support and fundraising activities.
(4) Is broadly representative in the organization's volunteer operated structure of the community where it is located and has a board of directors that includes a variety of leaders from community organizations and residents of the community.
(5) Awards scholarships for postsecondary education without regard to the recipient's age, sex, marital status, race, creed, color, religion, national origin, or disability.
Sec. 4. As used in this chapter, "county share" means the total amount that all community foundations in a county are entitled to receive under this chapter.
Sec. 5. The treasurer of state shall do the following:
(1) Before August 1, 2001, determine the county share for each county. The county share is the percentage that the population of the county bears to the population of Indiana applied to the total amount available for distribution under this chapter.
(2) Before August 1, 2001, determine the community foundation share by dividing the county share among all community foundations in a county in proportion to the population of the geographic territory that each community foundation serves.
(3) Until June 30, 2005, if there is no community foundation in a county, hold the county share for that county until a community foundation is established in the county.
(4) Until June 30, 2005, distribute a community foundation's share to the community foundation as follows:
(A) Distribute twenty percent (20%) with no required match.
(B) Distribute eighty percent (80%) over a period as provided in this subdivision. At least twice in a calendar year, as a community foundation matches two (2) state dollars of the community foundation's share with one (1) locally raised foundation dollar, distribute the community
foundation's share to the community foundation.
(C) The distributions under clauses (A) and (B) must occur according to a schedule that:
(i) the treasurer of state develops in conjunction with the nonprofit organization described in section 7 of this chapter; and
(ii) is structured to provide the maximum incentive to community foundations.
(5) Until June 30, 2005, invest any amounts held under subdivision (3) or not distributed under subdivision (4) and use the interest from this investment for the following purposes:
(A) To pay the treasurer of state's expenses in administering this chapter.
(B) To pay reasonable administrative expenses related to this chapter of the organization described in section 7 of this chapter.
(C) After paying the amounts required under clauses (A) and (B), distribute annually the remainder to a nonprofit Indiana statewide community scholarship foundation organization having affiliates that are community scholarship foundations. A statewide organization receiving a distribution under this clause must deposit the amount received in the permanent endowment fund of the statewide organization.
(6) On July 1, 2005, distribute any amounts:
(A) held under subdivision (3); or
(B) not distributed to a community foundation under subdivision (4);
to the organization described in section 7 of this chapter.
Sec. 6. A community foundation that receives a distribution under this chapter must do the following:
(1) Hold twenty-five percent (25%) of the amount received in a permanent endowment fund of the community foundation.
(2) Distribute interest received from the investment of the amount described in subdivision (1) to community scholarship foundations that operate within the geographic territory of the community foundation.
(3) Hold seventy-five percent (75%) of the amount received in a permanent endowment fund of the community foundation.
(4) Use interest received from the investment of the amount described in subdivision (3) to support the charitable purposes
and general operations of the community foundation.
Sec. 7. (a) The treasurer of state shall request assistance in the administration of this chapter from one (1) nonprofit organization that oversees and gives technical assistance to other nonprofit foundations, including community foundations. The organization shall advise the treasurer of state on all matters relevant to the administration of this chapter, including the eligibility of community foundations for distributions.
(b) An organization described in subsection (a) that receives a distribution under section 5(6) of this chapter must:
(1) deposit the amount received in a temporary endowment fund; and
(2) until June 30, 2009, distribute amounts from the temporary endowment fund to community foundations in the same manner that amounts are distributed under section 5(4) of this chapter.
On July 1, 2009, any amounts in the temporary endowment fund become the property of the organization for placement in the organization's permanent administrative fund.
Sec. 8. A foundation that receives a distribution under this chapter for placement in the permanent endowment fund of the foundation must return the amount received under this chapter to the state general fund if the community foundation:
(1) loses the foundation's status as a public charitable organization;
(2) is liquidated; or
(3) violates any provision of this chapter concerning the endowment.
SECTION 2. [EFFECTIVE JULY 1, 2001] (a) There is appropriated from the state general fund one million dollars ($1,000,000) to the treasurer of state to carry out IC 30-2-12.5 , as added by this act, beginning July 1, 2001, and ending June 30, 2002.
(b) This SECTION expires July 1, 2002.