If the fund is endowed, can the fund agreement still permit an agency to access principal?
A fund agreement may permit an agency to request or recommend a distribution of principal. The fund agreement may contain a general provision permitting a request for distributions of principal or the agreement could outline specific reasons for which a distribution of principal may be requested (e.g., capital projects). In either case, the agreement should be carefully drafted to ensure that any such agency request or recommendation is solely advisory. The community foundation must maintain final authority and control over whether such a distribution of principal will be permitted.
