Rose Foundation’s unique role as a bridge between philanthropy and the community has been recognized by state and federal courts, which have appointed the Foundation as trustee over 300 restitution and cy pres funds related to consumer and environmental issues. Through this program, the Foundation has been entrusted with over $20 million in cy pres and restitution funds and has been named as recipient of additional awards which are anticipated to total over $5 million.
How We Administer Restitution and Cy Pres Funds
In accordance with charitable law, each settlement document assumes the force of a deed of gift and specifies the allowable uses for any restitution funds. In accepting a settlement payment, the Foundation accepts any associated instructions that are expressed in the settlement document, and these funds are accounted for as restricted funds as required by accounting standards promulgated by the Financial Accounting Standards Board.
Guided by settlement instructions and the courts, the Foundation uses these funds to support programs to preserve consumer privacy rights; promote environmental stewardship and protect ecosystems and public health; or to directly mitigate pollution problems. As part of aligning grant awards with the nexus of the settlement, to the extent possible the Foundation prefers to award grants to organizations that are active in the communities which suffered the original harm.
Grantmaking Initiatives with Restitution Funds
Specialized grants funds are created based on settlement requirements. Rose Foundation provides stewardship over the restitution funds, takes full responsibility for meeting court-ordered use restrictions, constitutes expert advisory boards as needed to oversee the resulting grantmaking initiatives, and prepares full reports as needed describing use of funds to satisfy U. S. Justice Department and any other oversight requirements.
Supported Program Areas
- Consumer privacy
- Scientific research
- Hands-on community environmental stewardship and watershed restoration
- On-the-ground pollution mitigation measures
- Youth education and leadership development
- Technical assistance contracts
- Community-based health programs
- Policy development and advocacy
If a project is approved for funding, a grant contract specifies the scope of allowable activity. At the close of the grant period, all applicants are required to provide a narrative and financial description of work performed under the grant. Applicants are barred from further funding until those grant reports have been received and accepted as complete. Through this accountability mechanism, which has been accepted as an adequate control mechanism by the US Department of Justice, the Foundation’s administrative process ensures that all grant funds are properly expended.
Structured Application Process
Requests for proposals are developed to invite applications that conform to a settlement’s nexus, and are broadly circulated. Applications are reviewed through a rigorous screening process and grants are awarded on a competitive basis – typically on a twice yearly grants cycle. At a minimum, all grant proposals must provide:
- Detailed narrative description of the project.
- Financial information including a project budget, organizational budget, and previous year’s financial statement (audited statement strongly preferred).
- Organizational description documenting the capacity of the applicant to complete the proposed project.
- Proof of non-profit status.
- Description of key project staff.
- Timeline of proposed activities.
- Evaluation metrics to determine the project’s success.
Neutral 3rd Party Trustee
Rose Foundation’s stewardship over restitution funds has been well-accepted by plaintiffs, defendants, the courts and the US Department of Justice. Since Rose is not aligned with either side of the original dispute, designating the Foundation as a receiver may aid settlement momentum by removing the hurdle of negotiating advance agreement on individual projects or organizations. Instead, the parties are free to focus on, and reach agreement regarding, the terms which will govern the eventual grants. Even in cases where a settlement mandates the support of specifically designated projects, the Foundation’s centralized administration, experience, and accountability can add considerable value to the process.
The Rose Foundation assumes all administrative and legal responsibility for meeting settlement terms related to the restitution fund. When applicable, the Foundation conforms with established guidelines such as EPA’s Supplemental Environmental Project Guidelines, and also provides reports describing settlement-enabled grants to the parties, the US Justice Department, and the courts.
Examples of Restitution and Cy Pres Funds
How a retired math professor questioned the air pollution impacts of new housing developments in and around Bakersfield, and worked with developers for a creative solution.
The Consumer Privacy Rights Fund awards grants to support privacy-related research, education, advocacy and policy development. Since inception in 2002, the Fund has awarded over $4.5 million to support privacy protection in California and throughout the US.
The California Watershed Protection Fund works to improve the water quality and ecosystem of San Francisco Bay, the San Francisco-San Joaquin Bay/Delta, and tributaries to the Bay/Delta Water system and other watersheds throughout California.