How Does the Trust Work?

The AAEA Trust (formerly the AAEA Foundation) is the non-profit fundraising arm of AAEA, designed to support the purposes of the AAEA and its members. The initial endowment of the Trust is comprised of the same funds that previously resided in the AAEA Foundation plus a one-time addition from AAEA excess reserves, whose earnings have partially funded public goods in the past. The amount of the initial endowment is designed to ensure continued funding of public good projects at levels comparable to recent support levels as the new Trust Fund becomes established, and to facilitate the implementation of the “Centennial Initiative” discussed below. Expansion of the endowment will emanate from donations to the Trust, and members will have the ability to indicate which categories of projects they wish their donations to support.

Why Change the Name?

The AAEA Foundation was renamed the AAEA Trust in 2010 to more accurately describe its organization and function, and to align with IRS terminology for non-profit entities.

Is the Trust Functionally Different than the Foundation?

The Trust differs in two key ways from the Foundation it replaces.

First, the Trust will be used exclusively to finance all public goods supported by AAEA on behalf of the profession. AAEA membership dues will be used for the sole purposes of financing AAEA Business Office activities and the cost of AAEA meetings beyond the net income generated by the meetings and journals.

Second, the Trust will enable members to target their donations to support specific categories of activities, each designed with a unique mission and purpose. This gives members the ability to influence the levels at which public good projects are supported by the AAEA.

The initial support categories will consist of 1) Student & Young Professional Travel and Development, 2) Outreach, 3) C-FARE, and 4) Unrestricted Uses, which are consistent with the major public good projects that have been supported by the AAEA Foundation in recent years.

What Are the Goals of the Trust?

There are two principal goals of the new AAEA Trust. One goal is to reinvigorate donations to the AAEA endowment by providing members with new ways and new incentives for giving. These include aligning funding of public goods with stated individual member-donor preferences, and a support-matching provision that will apply during the Centennial Year that matches the effective funding support that a member designates for specific categories of activities, dollar for dollar.

A second goal is to create a long run sustainable fiscal foundation for maintaining an attractive cost of membership for those members who prefer only a basic level of Association services, while also providing opportunities, and a sustainable mechanism of funding, for the provision of public goods and services for those members who prefer that AAEA support these additional activities.

How Do Your Donations to Support Categories Affect Trust Expenditures?

The allocation among support categories you choose for your donation will affect Trust spending in the following ways:

1. First, half of the value of your donation will be expended on the budget of your chosen support category(ies) beginning in the next budget year, and the other half will be permanently invested in the Trust, expand the Trust endowment, and foster future trust earnings.  Second, expenditures equal to one half of the value of your donation will be allocated to your designated support category(ies) in equal amounts over the succeeding four years, with funds derived from the total yearly allowable expenditures from the Trust.  This allows your donation to have a substantial immediate expenditure impact while also supporting your chosen support category at a level equal to the full value of your donation over a reasonable and finite five-year horizon. Your donation is also contributing to expanding the Trust endowment and earnings from that endowment.
   
   Example: If you allocate $100 to a support category today, $50 will be made immediately available for that support category to spend in 2011. The remaining $50 of your donation is invested permanently in the Trust investment portfolio, expanding the Trust endowment and fostering future earnings from it. Then for each of the four years from 2012 through 2015, expenditures of $12.50 derived from total annual allowable AAEA Trust expenditures will be allocated to the spending budget of your chosen support category.
    
2. The aggregate allocations of members’ donations across support categories will inform the AAEA Trust Committee and AAEA Board about members’ interests as they determine the allocation of remaining discretionary expenditures supported by the AAEA Trust. Heretofore, the Committee and Board have had to rely largely on anecdotal information about member interests in recommending and approving these expenditure allocations.

What is the Centennial Initiative?

To celebrate AAEA’s centennial in 2010, the impact of all members’ Trust donations will be multiplied in 2010, beginning now and continuing through the end of the AAEA summer meetings in 2011. The “Centennial Initiative” is a commitment to match, dollar for dollar, the expenditure impact of  members’ donations made during this time. For every $1 a member allocates to each support category, an additional Trust expenditure of $1 will be allocated to the budget of that support category within the next 5 years, insofar as total allowable expenditures from the Trust permit. The one-to-one matching of expenditures will be funded by earnings from the Trust investment portfolio according to the allowable spending rule that has governed the AAEA Foundation, and will now still govern the AAEA Trust.

The Centennial Initiative leverages your ability to influence expenditures from the Trust.

Example: If you allocate $100 to a support category today, $50 will be immediately available for that support category to spend in 2011. The remaining $50 of your donation will be permanently invested in the Trust investment portfolio, expanding the Trust endowment and future earnings from it. Then for each of the four years, from 2012 through 2015, expenditures of $37.50 derived from total annual allowable AAEA Trust expenditures will be allocated to the spending budget of your designated support category. The commitment of an additional yearly $25 expenditure in each of these four years increases the effective total support for your chosen category to $200, representing a $1-to-$1 expenditure match of the original $100 allocation, over the course of five years.

Who Determines the Final Expenditures of the Trust?

The purpose of enabling members to target allocations of donations to explicit support categories is to better adapt the use of AAEA Trust funds to members’ interests in an on-going way. The AAEA Board, based on recommendations of the AAEA Trust Committee, will continue to have fiduciary responsibilities to determine whether proposed projects are eligible for funding based on the long-established funding guidelines that continue to govern the Trust, and to allocate expendable earnings of the Trust beyond expenditure commitments made to donors. Other than the commitment to use half of donations for targeted support categories in the budget year immediately following members’ donations, the allowable expenditures from the Trust will be regulated by the same spending rules that have previously applied to the AAEA Foundation.

Can a New Support Category Be Added?

New support categories for member-allocated donations can be added based on a recommendation from the AAEA Trust Committee and approval by the AAEA Executive Board. Any AAEA member can petition for the addition of a new support category. Such a petition must present substantial evidence that allocations of support to the fund will exceed 10% of total member-allocated donations. The activities being proposed for support must also be consistent with the long-standing funding guidelines governing expenditures from the AAEA Trust.

Will This Affect the Appreciation Clubs and Special Purpose Funds?

The AAEA Trust will still include the existing appreciation clubs and restricted special purpose funds that were created as part of the prior AAEA Foundation, as well as any newly initiated appreciation clubs. Those who wish to donate to a specific appreciation club will be able to allocate their donation among the separate support categories of the Trust and can also take advantage of the matching provision of the Centennial Initiative if donations are made prior to the close of the 2011 AAEA Annual Meeting.

Donations to restricted special purpose funds will be applied to the designated fund and expenditures from these restricted funds will be consistent with their designated restricted purpose. Such restricted funds will not be subject to allocation among the support categories of the Trust nor the matching provision of the Centennial Initiative.

How Do I Donate to the Trust?

You can contribute to the Trust using the online donation form (credit card only) or the PDF form (all payment methods). The PDF form will need to be mailed or faxed to the AAEA Business Office, who will send you a receipt after your donation has been processed. You may use the PDF form to pay via credit card, check, purchase order, or a donation of stocks, mutual funds or appreciated assets.

Both the online form and PDF form give you the option to make multi-year commitments. You will be charged for the first installment of your pledge upon receipt of your donation form. In subsequent years, you will receive an invoice reminder from the AAEA Business Office for the amount you have pledged. Please note that only donations processed between now and the 2011 AAEA Annual Meeting will be eligible for the Centennial Initiative.

How Are Donations from Nonmembers and Other Entities Treated?

Donations from nonmembers, corporations, and foundations are encouraged but will not be subject to donor allocations among support categories nor will they necessarily influence budget allocation among support categories. They will enter and supplement the Trust endowment, and support Trust expenditures on activities that advance the purposes of the AAEA and its members as recommended by the AAEA Trust Committee and approved by the AAEA Executive Board, subject to the spending rules that have governed Foundation funds in the past. Such donors continue to retain the prerogative of making restricted donations that are to be used for specific designated purposes or making donations directly to the public good. For more information, please contact the AAEA Business Office at info@aaea.org or at (414) 918-3190.

Because the Trust is using association resources to fund the Centennial Initiative and to provide administrative support to the Trust, and because an overarching goal of the AAEA Trust is to better align AAEA funding of projects with members’ preferences for providing support, only AAEA member donations will be used to  guide how non-restricted Trust funds should be allocated.