General Information - How it Works

Initial Investment:
To begin investment, an organization should complete the investment custody agreement and obtain a minute of approval and authorization from their Monthly Meeting for Business, board, or other appropriate body.  Send the agreement with a letter indicating the name(s) of your individual account(s) and whether income is to be paid out or reinvested.  Additional information on the purposes, the restrictions or the historical origins of the assets in each account will also help us to maintain more complete and accurate historical records.

Income Distributions
Income is distributed semi-annually on June 20 and December 20 and is based on a limited total return method of calculation.

Income distribution per unit is determined as follows:  The Fund's unit value is averaged over the past three years. This three-year rolling average of unit value is then multiplied by the payout ratio.  Finally, the resulting figure is divided in half to make the semi-annual distribution.

Payout Ratio:
The payout ratio is set at 5.5% for the June 2003 distribution and going forward. The payout ratio is reviewed annually by the Investment Committee and the Board of Directors. The payout ratio was set at 6% for the period December 1993 through December 2002.

Market Valuations:
The value of your assets is determined by unit valuation.  The market value of a unit of investment in the Consolidated Fund is determined at the end of each quarter (March 31, June 30, September 30 and December 31). New unit participations and withdrawals are calculated as of those dates.

Additions to Investment:
Additions can be made any time.  If cash is received before the dates for new unit participations/withdrawals, interest at money market rates is credited for the intervening period.

Withdrawals:
As with additions, withdrawals can be made at any time.  A request should be made in writing, noting the amount and the account from which the withdrawal should be made. An authorizing minute or letter should accompany all requests for withdrawals. Again, as with additions, the account will be charged interest at money market rates during the intervening time between the actual cash withdrawal and the next quarterly participations/withdrawals. (Please allow two weeks to receive your check following a request for withdrawal)

There is an exception with the complete withdrawal of any account (or with the withdrawal of any amount over 80% of the value of the account at the previous quarter's unit value calculation).  When the request for such a withdrawal is first received, a percentage (generally 80%) of the account's value as of the last valuation is paid out.  The balance, however, cannot be paid out until after the next quarter's unit value is determined.  The total amount withdrawn will be the product of the unit value established at the end of the quarter times the total number of units which are withdrawn.  (Please note that the entire withdrawal will be based on the unit value as calculated at that next unit valuation.  The prior quarter's valuation is only used as a guide in determining how much can safely be advanced to a constituent without danger of overpayment.) 

Subsequent Deposits:
Once you become a constituent organization, additional money can easily be deposited at any time.  Mail the check with information indicating your organization or Meeting and the name of the proper account(s) to be credited. (Call the office for instructions to wire transfer.)

Additional or Multiple Accounts:
If a deposit is sent to open an additional account, include an explanation of the purpose of the account and, if possible, a quotation of provisions from the will or other governing document, if any.  If the amount is very small, or the purpose for separate designation is not clear, the Executive Director may question the constituent organization as to why a separate account is needed.

On the other hand, organizations are encouraged to open separate accounts for Funds for different purposes or with significant trusts restrictions, so that the income and principal value of each can always be individually determined.  Also, funds restricted as to use of principal should not be combined with unrestricted funds.

In practice this usually means that moneys for scholarships, graveyards, general use, etc., should be in separate accounts.  In contrast, multiple accounts for the same purposes are discouraged.

Statements or Reports:
Income distribution statements are mailed with the semi-annual distributions, listing each account belonging to your organization and the respective income earned. 

Period end statements are prepared as of the end of each quarter and list current balances in income and principal cash; the number of units held with their original cost and current market value; and any participation or withdrawal of units during the three month period.