Ministry Leaders for Board
FROM: Jim Bramer, Retired CPA-Auditor
RE: Endowments at Ministries Originated in December 1999
Endowments at Ministries
Endowments at Ministries usually involve at least the following:
- The proceeds (often called Corpus or Principal) are financial resources that can not be spent now ..... they are "nest eggs."
- The yield (Investment Income) therefrom is available for understood Ministry operational purposes.
- Endowment resources come from either alive or deceased Donors and the yield is used as requested by the Donor.
- Quasi Endowments come from Board discretionary financial resources and, of course, the yield is used as the Board determines, etc.
- The Board should have an "Investment" criteria or agreed policy at they prudently care for this responsibility.
In order to get a grasp of Endowments, please Go Here for some information and then Click Here and obtain some perspective of some Endowments at a Mission Organization. Endowments involve at least the following:
Not long ago I was at a board meeting where Endowment topics were discussed --- especially Quasi-Endowment issues. One savvy Ministry business man board member voiced some philosophical concerns. This person's thinking included:
Be fully aware of the 'tyranny of the urgent' issues, whereby you do not plan ahead well.
This Ministry is attempting to meet urgent needs and there never seems to be enough money to do the job.
The Lord's return is imminent --- we must use every resource we now have to reach as many unsaved now as possible. Have a "Do Ministry Now" mentality and not dwell on the future.
So all Board discretionary monies should be spent now for ongoing Ministry purposes and not "nest egged".
Church and non local member Ministries like Schools, Mission Agencies and Camps are not alike. Their Ministry targets are different; some are more oriented to training the Saved, while others are more pointed to evangelizing the Lost. Obviously, such differences will contribute to your philosophy on this topic as Ministry funding takes place.
Some of you have "earned income,", or non donation, aspects of your Ministry. It is entirely possible that such board discretionary "net earnings" can be utilized to fund applicable Quasi-Endowments.
My Thesis Includes the Following:
Your Ministry needs to establish an Endowment/Quasi-Endowment philosophy within context of the above discussion.
Donor estate planning is essential ..... they MUST prayerfully take these steps. You must be positioned to encourage them along these lines and point them to the appropriate professional help.
Your philosophy and approach will include the need to prayerfully challenge your donors to fully fund your Ministry (perhaps via Endowments) while they are alive.
If you learn of an 'Endowment in the works' , prudently encourage the Donor and family to understand your philosophy as to such matters and encourage them accordingly.
Structure such endeavors so that appropriate larger one-time donations do not "re-invent the wheel, or unnecessarily do their own thing, etc." but flow into your existing Quasi-Endowments program that appeal to your Donors. See the Mission Agency example referenced above.
Endowments are resources the Ministry should prayerfully pursue.
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UPTD: June 08, 2012
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