In the exercise of its discretion, NHF may decide it is appropriate to close a Foundation. This may occur because the Foundation's purposes have been achieved. It may occur because the Foundation, after consultation with NHF, has incorporated as a independent non-profit corporation and has received IRS recognition of exempt status under IRC section501(c)(3) as a public charity. It also may occur if there are no qualified individuals to serve as directors of the Foundation.

   Certain circumstances will result in termination of the Foundation;

• If there is a zero balance, no deposits made, and/or no one has advised NHF on distributions to be made from the Foundation for a period of two consecutive years. In this case, NHF will attempt to contact the Foundation Director for a call to action.
  
  
• Upon the death, resignation, or incapacity of the last designated Foundation Director/Advisor. In this case, NHF will terminate the foundation account without contact.
  
  
• If the Foundation Account is an unendowed fund (both income and principal may be expended), and the assets in the Foundation have been entirely distributed. In this case, NHF will terminate the foundation account without contact.
  
  
• Other circumstances to be determined by NHF in its discretion.

Cases of Questionable Activity

NHF will investigate if there are reports of activities by Foundations that violate the rules and regulations of NHF, including, but not limited to, the commitments made in the Application and Legal Note. Both the Application and Legal Note, and the policies and procedures published on the web site of NHF, require that Foundations be operated at all times in ways that advance the Internal Revenue Code section 501(c)(3) purposes of NHF Any activities that are inconsistent with such purposes violate the rules and regulations of NHF.

During this period of investigation, we will place the Foundation account assets on "hold" (status changed to "Immobilized" in our database) until the matter has been resolved. With this immobilized status, funds may be deposited, but no funds will be disbursed by NHF. NHF will send written requests to the Foundation Director to request adequate information and documentation. A response must be made to NHF within thirty (30) days or within a more abbreviated response period as NHF may set if the urgency of the matter so warrants. Following the completion of such investigation, NHF retains the sole discretion to determine if a substantive violation has occurred and, if so, to terminate the Foundation, or to impose an agenda of corrective measures that must be completed on a timely basis by the Foundation Director.

The determination of the appropriate remedy is reserved solely to NHF. Violations that may result in termination include (but are not limited to):

• The Foundation is conducting improper fundraising events.

• The Foundation fails to send funds from fund-raising events or other sources to NHF for deposit.

• The Foundation is conducting a charitable program without providing an adequately detailed and documented quarterly update reports to NHF.

• Foundation deposits funds into bank or securities accounts that are not authorized by NHF and to which NHF has no access or the Foundation is collecting donations through an outside source not approved by NHF (e.g., using PayPal on your website, which is not an approved source).

• The Foundation is misleading its donors by not making clear the nature of the relationship between the Foundation and NHF. An example of this is if the Foundation misrepresents that it is a nonprofit entity, rather than a project of NHF.

• The Foundation exposes NHF to any liability (e.g., a vendor contract for services in connection with a fund-raising event) which NHF has not approved in writing. An example of this violation is if the Foundation is entering into contacts or commitments in its own name.

• The Foundation Directors engage in undue conflict that cannot be resolved by reasonable arbitration efforts of the NHF Executive staff.

• The Foundation conducts any activities that are inconsistent with the advancement of the Internal Revenue Code section 501(c)(3) purposes of NHF, including but not limited to, any activity that is an "unrelated trade or business."

• The Foundation provides misleading information to NHF or otherwise does not fully comply with the duty to keep NHF informed of its operations in order that NHF may conduct appropriate review and oversight.

Terminating a Foundation

In the event that NHF has determined that a Foundation should be terminated for any reason, or if a Foundation director him or herself has requested the account be closed, there are four options available to NHF, in its sole discretion:

• Disbursing the remaining assets on qualified charitable activities;

• Transferring the remaining assets to public charities, including existing ones and ones that may be formed with the consent of NHF;

• Transferring the remaining assets to NHF's general operating account;

• Transferring the assets to another Foundation at NHF.