Benefiting The Ministries of Your Church
An endowment is a wonderful tool to enhance and expand the ministries of your local church and its related ministry opportunities.
Your church does not have to create an endowment to encourage and receive “planned gifts.” Nevertheless, a properly structured endowment fund (or funds) will give donors a focus for planned and major gifts that are intended to sustain ministry for the long-term.
What is an Endowment?
An endowment is a charitable fund that provides a permanent source of income for the ministries of the church. A gift to an endowment is not spent. Rather, the earnings from that gift are spent in support of ministry. If managed properly over time, the fund should grow to meet or exceed inflation and produce a growing annual income stream.
An endowment fund can be created in one of two ways:
As a “restriction:”
An endowment fund can be created by the giver as a “restriction” on the gift. A bequest might state, “…I leave 10% of my estate to the Wesley United Methodist Church to be administered as a permanent endowment in memory of my late husband…” If the church accepts such a gift, it MUST honor the stated restrictions.
As one or more endowment funds:
The church can take the initiative to create one or more endowment funds. The existence of such funds will attract additional gifts and help to avoid awkward restrictions initiated by a donor. Commonly, churches carve out specific ministry areas beyond the annual operating expenses to receive endowment support. For instance, missions, building maintenance & improvements, scholarships and music ministry are popular areas for targeted endowment support.
Who is Responsible?
According to the Book of Discipline, 2016, ¶ 2533.5, the trustees of the local church shall receive, administer and invest bequests, trusts and trust funds subject to the direction of the charge conference.
Breaking it Down
So, if a church receives $50,000 from the estate of Jane Smith with the directive to administer it as an endowment for missions, then the trustees are responsible for seeing that the fund is properly invested, for providing financial reports to the finance committee, and for notifying the Church Council (or Administrative Council) of the amount of earnings that are available for use for the designated ministry purpose.
The Book of Discipline, 2016, ¶¶ 2533.5 and 2534, specifically authorize the charge conference to delegate these responsibilities from the trustees to a permanent endowment fund committee or local church foundation. In larger churches, such delegation is recommended, so that the administration of permanent endowments and the promotion of planned giving can receive the full attention of a single committee. (The trustees usually have their hands full with property matters.)
Whether the job remains with the trustees or is delegated to an endowment committee, the church conference should formally adopt policies to help ensure proper administration of existing and future endowments.
Some of the policy areas that will need to be addressed include:
- Spending policy: This policy will define how earnings may be harvested from the funds.
- Gift acceptance policy: This policy will be helpful for all gifts to the church, including those for endowments. This policy will guide the decision-making process as you examine the type of asset that is gifted, the restrictions the donor may place on the gift and the way the gift is processed.
- Investment policy: Endowments must be prudently and appropriately invested for long-term purposes. (A CD or money market account is a short-term investment that is not recommended for endowments.) Your policy can be as simple as a statement that the funds will be invested through the Missouri United Methodist Foundation, or a comprehensive outline of asset types and portfolio allocations.
- Donor relations policy: This will be a set of policies and practices aimed at tending donor relationships, instilling trust, and ensuring that the congregation understands and celebrates these gifts and the vital ministry purposes that are served. The policy includes gift acknowledgement, educational events, recognition, and communications.
As a starting point, your church conference may want to authorize a single endowment to be administered by the trustees.
Additional endowments can be added by the church or by individual donors as needs or interests arise. The following materials offer suggested policies and documentation:
Alternatively, you may want to create an endowment committee and adopt a more comprehensive endowment policy “charter.”
This can be done first or can be done later when the program has reached a size beyond the administrative capacity of the trustees. Contact the Foundation to discuss and to receive a sample charter.
Put your house in order, and make your wishes known
Putting Your House in Order workshops are held in local churches
Are there things you’d like to get in order that would make your intentions clear for your loved ones if you become incapacitated or after you’re gone?
Participants will learn:
- How to organize your financial affairs and gather important documents.
- How to put together a will or trust that reflects your wishes.
- What you’d like your service of remembrance to include.
- The people, memories, and dates that have been significant in your life.
- How to have open conversations with loved ones about sensitive but important decisions.
- And so much more!
While these are all important, they can also be emotional and difficult to discuss or discern. But when in order, they are an amazing gift from you to your loved ones.
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Care for your family, church and community
End-of-life planning can feel overwhelming, but lack of planning causes untold heartache for too many in their families, in our congregations and the community. Planning ahead with the right tools can bring clarity and peace of mind.
Let us help guide you
This free 90-minute workshop includes a complimentary Putting Your House in Order binder for each attendee filled with information, checklists, and easy-to-use forms for gathering all the key information and recording – not just the facts – but participants’ intentions, hopes, and values.
A Foundation representative is also available to follow up with participants individually, answering questions and assisting participants in discerning their final wishes.
Occasionally throughout the year an on-line workshop is also offered. Continue to check our events page for updated information of online events.
Testimonials
Most estate planning workshops are legal-focused. This one is human-focused. What a refreshing way to look at this topic of putting your house in order.
Joe H.
I can sum up how I felt after taking the PYHIO workshop: Relieved! It laid everything out for me, making it easy to take the next steps, complete the binder, and tell my kids where it is, so they won’t be left with difficult decisions.
Pastor Doug Day
This program is like a breath of fresh air for estate planning. It doesn’t just focus on the financial side of things, but also on the emotional and spiritual aspects that come with it.
Rev. Chris Abel
All Are Welcome
People of all ages and stages of life are welcome to attend either as individuals or as couples. Having a will or other previous plans discerned is not necessary. This workshop is not soliciting any legal or financial services. For parents of dependent children, there is also information about guardianship.
to schedule a putting your house in order workshop in your church, or to learn more about the workshop’s materials, contact:
Rev. Laura Murphy,
Director of Development
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