Unitarian Church of Hinsdale

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UCH Endowment Fund FAQs

Some years ago, the church established an Endowment Fund. The fund enables members and friends of the Unitarian Church of Hinsdale to permanently provide for the church and its future needs. Despite the fact that the Endowment Fund has been in place for years, many people still have questions about how it works. Here are answers to some of the most common questions about the Endowment Fund:

What, exactly, is an Endowment Fund?

Webster defines the word endow as follows: To furnish with an income; to make a grant of money providing for continuing support or maintenance. Thus an Endowment Fund (and specifically the Unitarian Church of Hinsdale Endowment Fund) is designed to receive and invest money from which income is derived to support the church.

Why does the Unitarian Church of Hinsdale need an Endowment Fund?

Our church has served the western suburbs for more than 120 years. Not all of those years have been good ones. Still, we are the beneficiaries of members long gone who left us with a large lot in an excellent location, and a proud building. Our annual pledges provide for current operations. The Endowment fund provides for the future.

How large an Endowment Fund is appropriate for a church like ours?

The immediate goal of the Endowment Committee is to amass an Endowment Fund of $2 million. A fund of this magnitude, invested at 6 percent, would produce income of $120,000 annually.

How is Endowment Fund money spent?

Endowment Fund money never gets spent—only the income earned from investing the fund monies can be spent. So if you give $100,000 to the Endowment Fund, it will remain forever—and only the income it produces can be spent. Even so, the income need not necessarily be spent—it can be simply reinvested.

Who is Responsible for investing the Unitarian Church of Hinsdale Endowment Fund monies?

Endowment Fund investments are selected and managed by a committee of five church members, elected by the congregation at the annual meeting. The Endowment Fund committee is responsible only to the congregation, not to the Board of Trustees. The terms of the committee members are five years in length, to ensure that the committee has continuity and that elected members are in place for sufficient time to learn how to manage the fund. One member is elected to the committee each year. Nominees for the Endowment Fund committee are slated by the church nominating committee.

How is the Endowment Fund money invested?

The Unitarian Church of Hinsdale Endowment Fund may be invested only in ways that will guarantee protection of the principal and produce income. This means that Endowment Fund money is not to be placed in investments that are subject to market pricing and the vagaries of the marketplace.

What happens to the income produced by the Endowment Fund?

Income produced by the fund may be used according to the needs of the church. Possibilities include augmenting the annual operating budget, funding a major capital project, developing new programs, or simply reinvesting it.

Who decides how Endowment Fund income is used?

The Endowment Fund committee is required by our bylaws to report to the Board of Trustees annually regarding the income generated by the Endowment Fund. The Board may then propose that some or all of the income be spent.

What ensures that the Endowment Fund won’t be raided, and the money used for ordinary expenses?

The church bylaws specifically state that Endowment Fund principal can be spent only if 75 percent of the entire membership agrees to do so. This extremely high hurdle virtually assures that any money donated will remain in the Endowment Fund forever.

Why would Endowment Fund income be reinvested, rather than used to augment the operating budget?

By reinvesting Endowment Fund income, it is possible to accumulate a significant amount of money which could be used for a capital project or other major expenditure without reducing the principal.

Are contributions to the Endowment Fund tax-deductible?

Contributions to the Endowment Fund of the Unitarian Church of Hinsdale are fully tax-deductible.

What is the best way to contribute to our Endowment Fund?

This depends entirely on your individual circumstances. Some members like to make an annual Endowment Fund contribution in addition to their pledge to the church operating fund. Some make an Endowment Fund contribution in years when income is high and a tax deduction proves advantageous. Others make a contribution to the Endowment Fund in lieu of flowers, in memory of a deceased loved one, or to honor a fellow church member. The Endowment Fund can be named as a beneficiary of mutual funds or IRAs. And some prefer to name the Endowment Fund in their will or trust, thus maintaining the ability to generate income until they pass on.

Do I need an attorney to make a contribution to the Endowment Fund?

Of course, no attorney is necessary if you wish to simply write a check or give securities to the Endowment Fund. If you wish to name the Endowment Fund in your will or trust, however, or make a specialized contribution which will provide you income until you die, you should consult your attorney. The Endowment Fund committee can help you and your attorney structure your bequest to accomplish the result you desire.

To help fund the future of the church, contact the church office or the minister, or Email uchendowment@hinsdaleunitarian.org.