Endowment Fund
  By Gary G. Wilmer

            An endowment fund consists of monies or securities that are set aside in a trust account or bank account. Only the earnings on these invested funds should be used in the day to day operations of the parish/school. This is an attractive source of income because an endowment can continue forever. Endowment funds have been known to provide a steady source of income that comes to be relied on year after year. It offers an ongoing investment-challenge opportunity for the entire Catholic community. A well-managed endowment frequently attracts large gifts or bequests from within and outside the community. The endowment fund’s annual yield (rate of return) is the necessary means used to complement the church/school and not that of the capital funds.

            It is essential that parishioners, school families, and individuals involved with the Catholic community be made aware that even if they do not have children in the local parish school, in financially supporting it, they are doing what Jesus asked-to teach all nations. It must be made clear that the values taught on a daily basis within the parish/school are well worth the investment no matter who the donor. By educating the parishioners, school families, and all others involved in the community of these facts, many will come to understand the need for an endowment fund.

            As in all development activities, an advisory committee comprised of members of the community is helpful if not a necessity. This committee in particular, should be comprised of individuals with expertise and esteemed credentials in finance and business operations. These committee members will consult with the parish/school leadership and others concerning the investment and management of endowment funds in an effort to ensure maximum safe growth. Of course, appropriate legal documents and agreements will need to be set up to govern all gifts. It will be essential that the appropriate parties set up a trust agreement as a guideline for managing the fund. This instrument will be a legal document with provisions built in to protect the interests of the parish and school from a potential alteration or movement of funds contrary to the expressed purpose of the funding operation.

            As the endowment grows on a yearly basis, the parish/school will be able to depend on the annual yield. In this model of funding, all assets will remain untouched, always be managed by a qualified committee of investment advisors, and the interest/dividends will be used to support the parish/school. The endowment fund can always grow and the goal is to increase capital funding thereby increasing annual yield.