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Endowment Funds Q& A
The following information was created by the UUS Endowment Committee in February 2021 for a series of weekly email articles to inform the congregation of UUS’s various Endowment Funds and how they work. The articles have been modified for posting on our website. Questions about our Endowments can be sent to email@example.com.
WHAT IS AN ENDOWMENT FUND?
An endowment fund is a kind of financial investment fund that is held by a non-profit organization. It is typically a long-term fund that is meant to exist for as long as the organization exists(in perpetuity). It is established from donations made by generous people who support the organization. Commonly, universities, churches, hospitals, or other non-profit organizations have set up endowment funds. The donations are known as the principle, or corpus. The funds are invested to grow income in the fund. That income is called earnings or interest.
The purpose of an endowment fund is to provide monetary support to the institution for the purposes defined by the institution when the fund is initially set up. Generally, unless stated otherwise, only the earnings can be withdrawn from the fund for support of the organization. The corpus remains intact to continue earning money. This is true of the UUS General Endowment Fund.
Organizations can have several different funds, some of which can only be used for specific purposes, e.g., scholarships, often defined by the person donating the money. These are called restricted funds because their use is restricted to specific purposes. UUS has several restricted funds.
HOW MANY ENDOWMENT FUNDS DOES UUS HAVE?
The short answer is – quite a few. Some of them are restricted, meaning the funds are meant to be used for specific purposes. The UUS also has several unrestricted endowment funds. These funds comprise the bulk of the value of our endowment funds.
WHAT ARE THE UUS RESTRICTED FUNDS?
The UUS Music Enhancement Fund can be used for music needs which are beyond normal music budget expenses. We used this fund to outfit both of our pianos with humidifiers, a one time expense. The music fund originated when a number of music appreciating members desired to restore the church organ at our old building in downtown Iowa City. It had been in disrepair for many years. It was repaired, and the left-over money became the Music Fund.
The Program Fund (often referred to as the Detiger Fund) was established sometime in the early 1980s through the efforts of Eleanor Hubor Detiger. Her desire was to supply funds for “community-wide programs that bring attention and credit to the Society.” For example, this fund has been used to sponsor a music program at the Englert Theatre by Peter Mayer.
The Jean Reese Fund – This gift from Jean Reese, a long-time and loyal member, now deceased, was established recently from a portion of her total bequest to UUS. It is to be used to fund the development of UUS property outside the building. A corpus has been established so this fund will never be depleted. It will remind us of Jean’s generosity and her love of the outdoors. It will provide funding for projects for years to come.
WHAT ARE THE UUS UNRESTRICTED FUNDS?
We have several unrestricted funds, but by far, the largest is the General Endowment Fund (GEF). It was established in 1973, as a result of donations in the memory of the very popular Rev. Evans Worthley, long-time UUS minister. The GEF is called unrestricted because the earnings can be used for whatever purpose the Board determines. Currently, it is valued at about $1.3 million (as of early 2021). This includes the corpus (donations) and earnings.
With a few exceptions, the UUS Endowment Policy restricts the amount of money that can be annually withdrawn from the fund to a range of 2-5% of the total fund. This is called the Annual Spending Allocation (ASA). The ASA percentage is determined by the Board of Trustees with input from the Endowment Committee each year. The ASA supplements the UUS general budget. In 2020, the ASA amount allocated to the budget was
Several other unrestricted endowment funds predate the current GEF and were donations by visionary and generous members. The first of these was $500 for the Whittaker Fund, established by Helen Whittaker in 1927, in memory of her husband, Frederick Hayes Whittaker. Another donation, made by Harriet Carr, of $300, in l939, was designated as the Edgar D. and Harriet Carr Fund. Harriet increased the value of this fund to $10,000 in 1969. The Bristol Fund, a bequest by Myrl F. Bristol, is the last of the unrestricted funds. Earnings from these funds, unless directed otherwise by the Board, are deposited in the GEF.
WHAT IS THE UUS MEMORIAL FUND?
The UUS Memorial Fund was initiated in 1973 by the UUS Board as a result of donations to the church in memory of Rev. Evans Worthley, a well-respected and popular UUS minister. He served our congregation from 1931-51. Upon his death in 1973, the Memorial Fund was established.
Policies were adopted to delineate use of memorial donations. It was decided the donations would be used for the intended desires of the donors or family of the deceased. If the donation was not designated for a specific purpose, the donations could be used for tangible, long-lasting items for the Society, or for improvements to the physical plant. Over the years, funds have been used to purchase furniture for the library, new chairs for the Fireside Room, and other items at our old building in downtown Iowa City.
The Endowment Committee does not oversee the Memorial Fund, although it does keep the Memorial plaques updated with the names of those members memorialized because of donations made in their name. The names of 110 members and are currently displayed on these plaques in the conference room.
Also in the conference room are the Chalice Society plaques, with 63 members’ names, which record the generous people who have decided to bequeath donations to the Society upon their death.
HOW DOES ALL OF THIS AFFECT YOU? WHAT CAN YOU DO TO HELP?
So now you know nearly everything there is to know about UUS Endowment Funds. You are invited to contact the Endowment Committee with any questions. For the 2020/21 congregational year, members of the Commitee include Ken Atkinson (chair), Jamie Sharp, Liz Swanson, Gary Lawrenson, and Carmen Griggs. You can reach them individually or by emailing firstname.lastname@example.org.
If this was a normal year (and we definitely know it is not), we would have already hosted you at our annual Endowment Committee party. It goes without saying (but we will) that we missed seeing you. It’s always a lovely gathering and provides a friendly reminder that contributions to the Endowment Fund are always greatly appreciated. Because of Covid, we will not be hosting our normal party this year. If you are inclined to make a donation, please send a check to UUS With “General Endowment” on the memo line. Your donation allows us to strengthen UUS in the future to sustain our facilities, programs, and personnel, and provide a source of funds for Mission-driven opportunities that may arise outside of our budgeted expenses.
We are looking forward to hopefully hosting one or more Zoom gatherings on Legacy Giving. In the meanwhile, we will keep you “in the loop” as there is more information to share. Take care and stay well!