By: Barry G. Allen- President & CEO
Do you know what an endowment fund is? Colleges, universities, children’s services, museums, the arts, other public charities and some church traditions have utilized endowment funds for decades to enhance and to strengthen their financial futures and to assure the perpetuation of their missions. However, endowments have not been utilized widely among Baptist churches, except in a few instances, until now.
Some church members resist philosophically the endowment concept for a church lest the church become too dependent upon them and relieve the current members of their on-going giving responsibilities. Others lack confidence in the church’s ability to administer such funds. These obstacles can be overcome through education and vision casting.
First, the sources for endowments are not the same as the sources for the on-going giving of the members. Offering plate giving typically comes from one’s cash income; endowment giving typically comes from one’s estate, represented by non cash assets such as securities, real estate, bequests in wills or trusts and beneficiary designations of life insurance and retirement accounts. Second, the Kentucky Baptist Foundation exists to relieve your church from the on-going administration of endowment accounts and is available to assist church leaders in casting a vision for how and why endowment funds should be incorporated into the stewardship ministry of the church.
Think about this. If a church member, who died 20 years ago, had included in his or her will a $20,000 bequest to establish an endowment with the KBF for the benefit of your church, your church would have received $22,875, an average of $1,144 per year, over that 20 year period to further the church’s Kingdom impact. Those funds could have been used for special mission opportunities, capital improvements, student scholarships, human need ministries or other special purposes. Furthermore, this $20,000 fund would have grown to $32,454 and would continue to provide, until Jesus comes again, a growing stream of funds for ministry.
What if 5 members had done the same thing, or if one member gave $100,000. In that case the church would have received $114,374, and the fund value would be $162,270. That’s what I call endowment power.
Call us toll free for individual assistance or to assist your church to utilize this power.
For more information, please call us at (502) 489-3533 or toll free in KY at 1-(866) 489-3533.
The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.