National Standard 3: Foundation Control over Component Funds

A community foundation’s governing body retains variance power by which it may modify any restriction or condition on the distribution of assets, if circumstances warrant. Further, with respect to assets held in trust, the governing body must have the power to replace any participating trustee for breach of fiduciary duty or failure to produce a reasonable rate of return of net income over a reasonable period of time.

Key Elements 

3.1 Does your foundation have a process for making a material change to a fund agreement and determining when the board needs to vote on those changes?

3.2 If your community foundation has assets held in trust, does your board understand that they have sole and independent power

  1. to replace any participating trustee, custodian, or agent for breach of fiduciary duty and,
  2. to replace any participating trustee, custodian, or agent for failure to produce a reasonable return of net income over a reasonable period of time?