The Foundation provides chapter alumni organizations and housing corporations with the option of creating Chapter Education and Allocation Funds on behalf of their affiliated chapters. These funds are created through tax-deductible donations from alumni and friends and are for the express purpose of benefiting the educational needs of the chapter members.
Chapter Education Funds (CEFs)
A Chapter Education Fund, or CEF, is a fund managed and invested by the SAE Foundation and used to benefit a chapter's undergraduate or graduate-school members. A CEF is established with a tax-deductible contribution, or a combined total of contributions of $5,000. Upon the initial funding of a CEF, an agreement is drawn up and signed by a trustee of the Foundation. Alumni Fund Managers are then appointed. Typically, fund managers are the house corporation president, alumni association president, and the chapter advisor.
Chapter Education Funds and their administration are subject to the regulations of the Internal Revenue Service and the laws governing 501(c)(3) organizations. All donations to a CEF are included in the donor's lifetime giving record with the Foundation.
The pay-out for a CEF is specified in its initial agreement and is usually not greater than 5 percent. It is the payout that is available annually for use by a chapter for projects deemed "wholly educational in nature." Examples of such projects include:
- Tuition for the John O. Moseley Leadership School
- Academic scholarships
- Computers, computer acessories, and library resources for a chapter house
- Physical enhancements of "scholastic areas" of a chapter house
Not all projects funded by a chapter qualify as "wholly educational in nature." Projects that DO NOT qualify include:
- The purchase of ritual equiptment
- Convention fees
- Travel expenses to and from the John O. Moseley Leadership School
The SAE Foundation assesses an administration fee for the management of CEFs. CEFs with a year-end market value of less than $125,000 are assessed a 2 percent annual management fee. CEFs with a year-end market value greater than or equal to $125,000 are assessed a one-half percent annual management fee.
For more information on Chapter Education Funds, contact the Foundation at (847) 424-3021 or at Foundation@sae.net
Chapter Allocation Funds (CAFs)
A Chapter Allocation Fund, or CAF, is a non-interest earning fund managed by the Sigma Alpha Epsilon Foundation and established by the alumni of a chapter to provide educational grants to a chapter's house corporation for physical improvements to a chapter house. Based on the educational percentage of the square footage of the chapter house, the house corporation can receive grants from its CAF to pay for the renovation or construction of a chapter house. CAF grant checks are issued on the 10th and 25th of each month. The written request and notarized covenant to repay must be received by the Foundation 3 business days before the issue date to be included. All donations to a CAF at the Foundation are tax-deductible and are included in the donor's lifetime giving record with the Foundation.
CAFs can be used to:
- Help purchase, build or renovate a chapter house, based on the independently calculated percentage of educational space in the house
- Remodel areas of a chapter house that are wholly educational, such as a library
- Pay a percentage of the annual maintenance and operation costs, such as gas and electric bills or property taxes (based on the percentage of the square footage of the house that is "wholly educational").
- Pay 100 percent of a chapter's internet bill
For more information on Chapter Allocation Funds, contact Dan Stanczak at (800) 233-1856 ext. 205, or by email at firstname.lastname@example.org.
So, What's The Difference?
With a Chapter Education Fund, the tax-deductible funds contributed are invested and the annual earnings of the investment provide a "pay-out" for chapter use. The annual pay-out, following a request by the chapter fund manager, can be used for the chapter's educational purposes. A CEF is for direct educational expenses.
With a Chapter Allocation Fund, the tax-deductible funds contributed are available to the house corporation to spend on educational purposes, upon the presentation and approval of invoices. A CAF pays for educational parts of a chapter house.
Q: May I exclusively support my own chapter by making a tax-deductible gift to the SAE Foundation?
A: If your chapter has a Chapter Education Fund (CEF) or is in the midst of a capital campaign and has a Chapter Allocation Fund, then you may make a 100% tax-deductible gift through the Foundation to exclusively benefit your chapter. If your chapter has neither of the above, then your gift will be directed toward a restricted account and will be held to pay the Leadership School tuition of an undergraduate brother from your chapter.
Q: My chapter does not have a Chapter Education Fund (CEF) established. How do we go about setting one up with the Foundation?
A: Any chapter can establish a CEF with a minimum initial donation of $5,000 which is fully tax-deductible. This amount does not need to come from one individual donor and can be accumulated over time with multiple gift payments.
Q: My chapter has a Chapter Education Fund (CEF), how can this money be used?
A: Disbursements from a CEF may be made, at the request of the CEF Administrator, for the following purposes: (1) scholarships for qualified students to attend the John O. Moseley Leadership School, (2) scholarships for qualified students to attend college or university including tuition and books, and (3) any other educational purpose, such as the purchase of computer hardware and software or the renovation and enhancement of “scholastic areas” of the chapter house which the trustees deem appropriate, in their sole discretion.
Q: How much of our CEF can be allocated annually?
A: The maximum amount that may be distributed from the CEF during any fiscal year of the Foundation shall not exceed 5% of the fair-market value of the CEF at the end of the preceding fiscal year or the cost for one qualified student to attend Leadership School.
Q: What happens to the net income in our CEF if it is not used in a fiscal year?
A: Any net income of the CEF which is not distributed shall be added to the principal of the CEF for later use by the Chapter.