Stewardship Kaleidoscope seminar explains why and how churches should establish an endowment

Presbyterian Foundation speakers say an endowment can be a vital part of a church’s legacy for years to come

by Nancy Crowe for the Presbyterian Foundation | Special to Presbyterian News Service

The Presbyterian Foundation’s Stephen Keizer spoke during Stewardship Kaleidoscope last month. (Photo by Gregg Brekke)

An endowment extends good stewardship above and beyond a church’s operating budget, said the presenters of “Introduction to Endowments: Why Have One, and What Are They?”

Like any gift that keeps on giving, an endowment requires smart choices to get started.

Stephen Keizer, Vice President of Ministry Relations, and Olanda Carr, Senior Ministry Relations Officer, both of the Presbyterian Foundation, discussed those choices last month at  Stewardship Kaleidoscope, an annual conference focused on stewardship and generosity. It was held Sept. 26-28 in Savannah, Georgia.

A long-term legacy

Since endowments are permanent funds established from irrevocable gifts, they can be vital to a church’s legacy for years to come. Once they’re established, they don’t need a lot of maintenance.

They’re also an expression of a donor’s faith, Carr said. “What would you endow right now in your church?” he asked. Maybe it’s a particular music ministry such as a choir, or an educational program.

Whatever it is, donors want to give to things that make an impact and are fiscally sound. “They don’t want to give to sinking ships,” Keizer said.

They also need to know the leadership can keep a seaworthy ship on course.

Defining priorities and looking forward

Keizer suggested identifying three to four mission priorities rather than leaving an endowment unrestricted. The categories should reflect what ministries may look like in five, 10 or 50 years.

For example, Carr said, many churches are no longer using organs or may stop using them. Therefore, a music fund would make more sense than a specific organ fund.

An endowment also can’t support just the annual operating budget, Keizer said. Your endowment should support no more than 25% of your budget.

Still, spending legacy funds is important, both emphasized. Church members/potential donors need to see that the endowment is sound and working.

Policies ease the way

No congregation is too small, or too populated with people of seemingly modest means, to have an endowment. You can’t judge someone’s capacity for giving based on their homes or cars, the two said. It’s not unheard of for a congregation to be surprised by a generous gift, and if there are no policies in place to receive it, the gift may not be handled well.

So, create the opportunities for giving that an endowment provides, the presenters advised, but create policies to ease the way for donations and protect all parties.

A spending policy defines the funds you’re asking people to support. It’s not about the today’s leaky roof, Carr said, but about needs and priorities in the next 15 or 20 years.

An investment policy defines the instruments that will be used and where the funds will be invested. Consider the statements you are making with investments, review the policy and portfolio annually and have a conflict-of-interest policy in place to prevent fraud or misappropriation of funds, Keizer advised.

A gift acceptance policy spells out the types of gifts the endowment will accept. This can prevent unexpected costs such as environmental remediation on donated land, Keizer said. That’s just one example.

Olanda Carr is Senior Ministry Relations Officer for the Presbyterian Foundation. (File photo by Gregg Brekke)

“I have so many churches who’ve received multiple pianos,” Carr said, adding occasions like Legacy Sunday are a great opportunity to let people know what gifts the endowment accepts.

Moreover, “gratitude is at the heart of this,” Keizer said — both to God and to the donors. That’s why it’s crucial that a gift acceptance policy include procedures for acknowledgement and thanks.

Beyond the committee

Endowment policies need to include leadership, too.

“One of your most important roles is to be a cheerleader,” Keizer told the pastors in the audience. “That’s your role in this, too.”

But it can’t all depend on the pastor. Lay endowment leaders must be givers to the endowment — donors won’t support something the leaders do not — but they need not all be financial professionals. Include visual and verbal storytellers, too, perhaps even event planners. Carr and Keizer urged anyone with an endowment to have a marketing plan and a thank-you event.

And by all means, take note and celebrate when the endowment makes a difference.

Help with endowments is available from Stewardship Navigator and your Ministry Relations Officer.

Nancy Crowe is a writer, editor, and animal wellness practitioner based in Fort Wayne, Indiana. She is a graduate of Louisville Presbyterian Theological Seminary. Send comments on this article to Robyn Davis Sekula at robyn.sekula@presbyterianfoundation.org.