As we enter the fourth quarter of 2023, the topic of year-end legacy giving arises. Legacy giving, in turn, leads to the importance of endowment funds as an important piece of a long-range planning strategy for every church and non-profit. Every person who displays a generous heart at one time or another gives thought to their own legacy. The challenge with endowment funds is that they tend to do their work “behind the scenes”, and the purposes for which they are created can often be forgotten or misunderstood.
Here are things to consider when establishing or revitalizing an endowment program:
- An ongoing education process is important. Develop a simple piece of literature to promote the fund, and share through email, Facebook, website, etc. Conduct planned-giving seminars with your members… and as you do, don’t be bashful to ask for consideration of a bequest gift to the endowment fund.
- Consider having two funds: one as a “pass through” fund to support immediate ministry projects; the other as a true endowment fund where only a portion of the earnings are distributed and the principal balance is kept intact.
- You can have a separate team that invests the funds, but it is best to keep decisions about fund distributions in the hands of the church governing body. Clear, documented policies on how the funds will be distributed need to be communicated to the congregation, and all potential donors.
- When dollars from an endowment fund are spent, celebrate the occasion. Celebrate the foresight of the donors who helped create the fund. Celebrate the project or program that benefited from the funds. Explain how these dollars are above and beyond your operating budget. Too often endowment fund dollars are spent quietly and the congregation knows little about the impact of the fund.
- Establish a Legacy Society for all members (past and present) who have remembered the congregation in their will.
- Hire professionals to help. They can advise your members on the various options available for making a planned gift (life insurance, real estate, stocks/securities, charitable remainder trusts, etc.).
Here’s a final thought…legacy giving is not just for the wealthy. Many long-time members or supporters of modest means can become impactful donors of estate gifts to your endowment fund.
Fred Stoltz, Sr. Program Director
The James Company