By: Richard Carnes
On any given Sunday, Baptist church members across the commonwealth of Kentucky give their regular tithes and offerings to their church and make contributions to Baptist ministry and mission causes that further the growth of God’s Kingdom across the world. Each of these great stewards is to be thanked for this act of faithfulness. Perhaps you have considered how to ensure that your support for these ministries continues indefinitely into the future; one way is to endow your gift.
To create an endowment, you would leave a certain sum of money or asset through your will or living trust, or perhaps name the charity as a beneficiary of a retirement plan or life insurance policy. That sum would be used to establish a fund benefitting the ministry cause as you have directed. The income distributed from the fund would be a continuation of your annual gifts.
How does this work? An organization like the Kentucky Baptist Foundation considers economic conditions when deciding on an appropriate distribution percentage. The total amount of the gift and this distribution percentage determine how much money will be distributed to your chosen cause on an annual basis. If for instance the distribution rate is set at 4 percent, then for each $1,000 annual gift you want to sustain, an endowment of $25,000 would be required. If you have been contributing $2,000 per year, an endowment of $50,000 would ensure an annual distribution of $2,000.
Ideally, the distribution percentage should be set so that the annual amount available for charitable purposes keeps pace with inflation. The goal is that over time the total return of the endowment will exceed the percentage distributed each year, which means that the endowment principal will grow – and annual distributions will increase accordingly. So, in a sense you will be an annual giver indefinitely, and thus ensure the ministry organization you value will continue to be supported.
To make intentional plans to care for your family and the ministries God is inspiring you to support, call upon the Kentucky Baptist Foundation as a helpful partner. If you have questions, please contact the Kentucky Baptist Foundation at our toll-free number (866) 489-3533.
Richard Carnes is the president of the Kentucky Baptist Foundation, P O Box 436389, Louisville, KY 40253; toll-free (866) 489-3533; KYBaptistFoundation.org
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.