Endowments: Is Your Church Prepared?

Generosity is a fundamental expression of faith, shaping not only how we live but also how we plan for the future. For many believers, their church home is a cornerstone of their life—a place of spiritual growth, community, and vital outreach. Some members of your church may have a specific ministry or cause in mind when giving to your church. An endowed gift is one way that they may chose to give to support that cause. We often encourage churches to consider accepting designated gifts to fund projects or to quasi-endowments, instead of endowments, however, donor instructions  and their intent may make it necessary to create an endowment fund.

To help you create and manage your endowment fund program we have created an endowment policy template. It covers all endowment types and provides tips and resources for your church to use. 

Here are a few reasons your church may consider accepting an endowed gift:

• Creates a permanent source of support
  An endowment allows your church to invest donated funds and use a portion of the earnings over time.
• Provides financial stability
  Regular distributions from an endowment can help support ministries, missions, building maintenance, scholarships, outreach, or other ongoing programs, allowing you to continue supporting your daily operations with regular giving. 
• Protects donor intentions
  A well-designed policy can specify how restricted gifts are to be used, helping ensure that a donor's wishes are honored for years to come.
• Encourages larger and legacy gifts
  Members may be more willing to make substantial gifts or include the church in their estate plans when they know there is a formal structure for managing and preserving those gifts.
• Reduces dependence on annual giving
  An endowment can supplement—not replace—regular tithes and offerings, enabling special programs or projects to continue even when times are tough.
• Supports future generations
  The goal is often to establish funds that can benefit the church 10, 25, or even 100 years from now. It creates a financial legacy beyond the current congregation.
• Provides governance and accountability
  A written endowment policy establishes who manages the funds, how investments are handled, how much can be distributed, and what happens if circumstances change.
   

An endowment isn't simply an investment account or special restricted fund. It is a long term stewardship strategy designed to preserve the principal for the future while using a sustainable portion of the assets to advance the church's ministries today.