1. What is an endowment fund?

Simply stated, an endowment is a permanent investment fund set up by a church or foundation to further the mission of the organization through periodic withdrawals of investment income for defined and approved projects.  Endowments are funded by donations, typically through legacy giving or planned giving. In contrast to tithes given by the congregation out of their annual income toward the operating budget of the church, endowed giving is intended to benefit the church’s long-term interests and mission. Since only investment earnings are spent, and not the principal portion, endowment gifts become a means of supporting the organization in perpetuity.

 

2. What is the Rowandale Baptist Church Endowment Fund?

The Rowandale Baptist Church Endowment Fund (the Fund) is a permanent fund established to offer Rowandale members and adherents the opportunity to leave a legacy of faith for future generations. Gifts to the Fund become part of a perpetual fund with earnings used to expand and enrich the mission and ministry of Rowandale Baptist Church (the Church). The Fund is separate from the annual operating budget and capital fund of the Church.

 

The Fund is comprised of two accounts. The General Account and the Ministry Training Support Account.

 

Fund Account	Purpose	Distribution
General Account	To receive donations of accumulated assets to be invested for the long-term life and ministry of the Church.	Income generated will support and enhance non-recurring activities and projects consistent with the mission of the Church, other than the annually budgeted operating expenditures.
Ministry Training Support Account	To support individuals undertaking education, training, workshops or some other form of training in a vocational field consistent with the ministries of the Church.  Preference will be given to those seeking training in fields related to children’s or youth ministry.	An annual distribution in the form of a bursary will be awarded based upon submitted applications by an appointed committee.

 

 

 

3. Does a gift to the Endowment Fund replace my annual stewardship giving?

It does not.  Regular giving to the Church supports the annual operating budgeted expenditures. A gift to the Fund is invested with the objective of protecting and growing the principal; only the earnings are distributed.  In this way, your gift becomes a long-term benefit to the future ministry of the Church.

 

4. Why should I consider giving to the Endowment Fund?

A gift to the Fund is one way you can help ensure the ministry of the Church will grow and be carried into the future and that those who follow you will be served for generations to come.  Your gift creates a lasting legacy of your stewardship and a more stable financial environment for the Church.  Additionally, there may be meaningful tax and estate planning advantages available to donors.  You are encouraged to consult your tax and accounting professional about these matters.

 

5. What is planned giving?

Planned gifts are contributions made as the outcome of a process of choosing the most appropriate gift for the most important purpose in the most advantageous time frame for the donor, the charity and the donor’s heirs.  Gift planning, as the process is often called, is the preparation and design of charitable gifts to maximize the benefits for both the donor and the organization.  This process often occurs when the donor is creating or revising their will in consultation with their financial, accounting or tax professionals.

 

6. How can I give to the Endowment Fund?

Donors wishing to give to Fund will complete an Endowment Fund Contribution Form.  This form will be submitted to the Finance Committee. A member or members of the Finance Committee will arrange to meet with the donor to discuss the details of the gift being given.  The form will then be submitted to Council for approval and acceptance of the gift.

 

Inter vivos donations (gifts while living), testamentary donations (bequests by will), assignments of life insurance and transfers of property and other such methods may be contributed to the Fund.

 

7. Who manages the Endowment Fund?

The Fund is managed by the Finance Committee (the Committee) in accordance with The Endowment Fund Policy of Rowandale Baptist Church Inc.(the Policy). A copy of this Policy is available by contacting the Church Office.  The members of the Finance Committee are appointed by Council.  It is comprised of the Treasurer, Assistant Treasurer, Bookkeeper, and members-at-large.

 

8. How is the Endowment Fund invested?

The investment of the principal portion of all gifts is governed by the Policy.  The Policy specifies investment goals of risk tolerance and accepted types of financial instruments.  The Committee will review the portfolio’s performance periodically to determine if any adjustments are warranted.

 

9. Can I designate how my gift can be used?

At this time, no.  As specified in the policy, the Fund is an unrestricted endowment fund.  In the future, however, it is possible additional Fund accounts may be created for designated purposes upon the recommendation of the Committee and approved by Council.

 

10. How can I get more information about the Endowment Fund?

You may complete the information request form available on the website or call the Church office. A member of the Finance Committee will contact you.

1. Endowment Fund – a fund in which the principal remains permanently invested and only the annual income is available for disbursement.
2. Unrestricted Endowment Fund – A fund which consists of assets that can be spent, saved, invested, and distributed at the discretion of the institution receiving the gift.
3. Restricted EndowmentFund– A fund where the principal is held in perpetuity, while the earnings from the invested assets are distributed as per the donor’s specifications.
4. General Fund Giving - Gifts given by members and attenders designated toward the annual General Fund budget of The Church. These gifts are disbursed as The Church carries out its ministry in the current year.
5. Legacy Giving - Gifts which are monetary gifts or other assets and which come from accumulated assets given by a person or through an estate and intended to benefit the long-term ministry of The Church.
6. Planned Gift – A gift given to The Church, usually from assets (savings, real estate, stocks) rather than current income. Gift planning, as the process is often called, is the preparation and design of charitable gifts to maximize the benefits for both the donor and the organization.   Planned gifts occur through a will or given while the donor is still living and often with the advice of accounting, financial or tax professionals.
7. Working Funds – Funds which are available for use in the form of cash and bank deposits. These funds have not yet been distributed or invested.
8. Externally Restricted or Designated Donation – Gifts given which the donor designates a distinct or narrow purpose for investment and disbursement.
9. Unrestricted Donation – Gifts given for which the donor has made no specific use restriction or designation.
10. Internally Restricted Donation – Gifts which are not restricted by a donor’s intent; as such, the membership has the authority to change the terms of the fund by majority vote, and use all or a portion of the principal, if they so decide.
11. Value of the Fund - The market value of the total net assets of the Fund.
12. Principal - The portion of the Fund that is non-wasting and that is to be maintained and managed in perpetuity to generate investment returns.
13. Annual yield - The summation of annual appreciation of the Fund from interest, dividends and realized or unrealized capital gains or losses.
14. Income – The portion of the annual yield which will be available for current use.
15. Consumer Price Index – A measure of the changes in prices experienced by Canadian consumers.
16. Distribution Amount - The amount of income which will be distributed from the Fund.
17. Disbursement Quota – CRA specifies that if a registered charity has any property that is not directly used for charitable purposes and the value of the property exceeds $100,000, then 5% of the average value of that property over the previous 24 months must be used for charitable purposes in any given year. Because the disbursement quota calculation includes all the revenue and expenditures for a congregation, and congregations are usually spending or giving away most of the money they take in, this is not usually a concern.