Determination of Annual Distribution Amount . - updated March 1, 2021


From a Dayton Foundation letter dated May 19, 2017:

"As part of being a responsible steward in overseeing the investments of all Dayton Foundation funds, we annually review our investment policy and the method for calculating the administrative assessments for all funds and the distribution amounts from endowed funds. In making these calculations, we have been using the fund value average over 12 quarters ending with March 31 of the current year.

Over the next two years, the Foundation will phase into a practice of calculating these amounts based upon a fund value average over 20 quarters instead of the 12 quarters. This change to a longer timeframe for the calculation takes the highs and lows out of the market volatility and makes the distributions and assessments from your fund more predictable for you. This means the value of your fund will be better positioned for future growth. The first phase of this new calculation will go into effect on July 1 with a 16-quarter average, followed by a 20-quarter average starting July 1, 2018."


Additional information by email, confirmed by The Dayton Foundation on March 1, 2021:

"At the end of the 1st quarter each year (3/31), the total amount of deposits (contributions) and withdrawals (grants) over the prior 12 months is assessed, and if the net deposits/withdrawals is plus or minus 10% of the 3/31 fund balance from the previous year, a "restart" occurs where the calculation of the 4 percent distribution will occur beginning with the quarter in which the plus or minus 10% difference occurs. Deposit and withdrawals do not include investment income, fees, realized gains and losses, and unrealized gains and losses."


Feb 15th, 2018 email from DZ: "For FY2018, we took the average rolling 16 quarters fund balance ending at the March 31, 2017 quarter. So going back 16 quarters from that point, (see below) we would start at 6/30/13 and calculate the average and multiply by 4%. The distribution for FY2018 was $5,690.94. As you know the grant request that we received was to distribute $6,000. Beginning in FY2019, TDF we will calculate based on a 20 quarter average ending at March 31, 2018.

Keep in mind Stuart that whenever the fund balance is increased or decreased by more than 5%, the calculation will reset with the quarter in which the over/under 5% has occurred, so with the Salisbury estate gift coming in July 2017, the FY2019 distribution calculation will reset and start with the quarter ending 9-30-17. We will average the 3 quarters (9-30-17, 12-31-17 and 3-31-18) and multiply that by 4%. So, FY2019's distribution amount available will probably be in the range of $14,000-$15,000."


June 14th, 2018 email from DZ: "The FY2019 distribution amount for the Kern Fund is $14,896.47. The fees are 1.2% on first million and then .45% fee on remaining value over $1M. "


October 24th, 2019 email from DZ: "Credit Cards fees are charged 3% no matter what credit card is used."


February 20th, 2020 email from DZ: "The +-10% quarter is not quarter to quarter but for the 12 months between 3/31 of prior year to 3/31 this year. If the fund's balance at 3-31-20 is +-10% from the 3-31-20, it will reset at the quarter that this changed. That will definitely happen and if you get many donations from your mailing in this current quarter, it may just reset with the 3-31-20 balance. Looks like you will be near $18K for the FY2020 distribution."


February 10th, 2021 email from CD: "A reset occurs when there is a single addition or withdrawal greater than 10%. The last time that we restarted the clock for this fund was 9/30/17. That was due to the July 2017 contribution of $203,000. Increase in value since then has been from smaller contributions and market value appreciation. Barring any large contribution or withdrawal prior to March 31, there will be no restart this year. The FY 21 distribution was calculated on an 11 quarter average (11 quarters starting at 9/30/17 and ending with 3/31/20). The FY 22 distribution will be calculated on a 15 quarter average (add 4 quarters). Using the 12/31/20 balance for the 3/31/21 balance, the FY 22 distribution should be about $16,240."


February 12th, 2021 email from CD: "'The report that I run shows me the % change due to deposits and withdrawals. So in his example, a fund with a starting balance of $500,000 would be restart whether a single $50,000 contribution came in or several totaling $50,000 came in.' So, it doesn't have to be just a single contribution, but it does have to be a 10% change."


Additional Resources:


The calculation occurs at the end of March for the *following* fiscal year (July-June). Because the Kern Fund check is usually presented to Camp Kern in June, this means that there is an elapsed time of about 15 months between the calculation of the amount and the check's actual distribution. The Carl B. Kern Fund Advisory Board is notified of this amount and may act upon it - for example, rounding it up or down - to make a final determination of the amount to be distributed from the Fund. Depending on the difference between the calculated amount and the Advisory Board's recommended amount, approval from The Dayton Foundation's Governing Board may be necessary.