ENDOWMENT FUNDS
Your commitment to the community is evident in everything you do…the responsibility you take, the care you give, the traditions and values you teach. Now you can extend your commitment and inspire the next generation and generations to come. You can make a connection to the future. Your annual gift alone cannot secure the future of your organization. Your endowment fund can.
An endowment is a permanent restricted fund dedicated to endowing your annual gift to your organization. An endowment fund is not intended to substitute for any part of your annual gift—it is, instead, a lasting legacy for the future. Endowments can be created through a variety of vehicles, some of which do not necessitate funding during your lifetime yet still provide your estate with considerable tax benefits. They also enable you to perpetuate your commitment to your organization in a way that best achieves your own personal financial and estate planning goals. Your gift will continue forever. To arrive at the estimated amount needed to endow your entire gift, simply multiply your current gift by 20. Alternatively, you could endow a portion of your gift by establishing a fund with a lesser amount, perhaps building up the fund through subsequent contributions.
FREQUENTLY USED VEHICLES TO FUND AN ENDOWMENT
An outright gift. This is the easiest way to create an endowment, using cash or appreciated assets such as stocks, bonds or real estate.
A life insurance policy. The reasonable costs and tax benefit make this particularly appealing for younger donors. If your organization is named owner and beneficiary, premiums may be tax-deductible.
A philanthropic fund or supporting foundation. Donors may dedicate the remainder of a fund or supporting foundation, or make recommendations annually from it.
An IRA or pension plan. The Treasury rules regarding taxation of distributions of IRA assets make these assets ideal for transfer to a charity or qualified charitable trust through action of the Plan Instrument itself or by Testamentary provisions. A portion of these funds can be used to create an endowment as part of a financial or estate plan.
A charitable income plan, charitable remainder trust or charitable gift annuity. This offers the benefit of life income payments with tax deduction. The remainder may be contributed to an endowment fund.
A simple bequest in a will or trust.