GIFTS FOR TODAY, TOMORROW AND FOREVER
With a permanent endowment your commitment to the causes you care about can be continued beyond your lifetime. When you establish a permanent endowment fund at CCF, you can be assured that we will prudently invest and manage your permanent gift.
In addition to establishing your own endowment, you have the option to partner with other philanthropists to meet urgent or emerging community needs today and into the future by contributing any amount to the CCF Legacy Fund.
Ensuring that your charitable intentions are upheld forever is the work we’re called to at the Catholic Community Foundation.
How Permanent Endowments Work
You can start a permanent endowment with a gift of cash, securities, or complex assets, or you can establish a Donor Advised Fund that can convert to a permanent endowment upon your passing.
Likewise, after providing you with a lifetime of incremental income through a Remainder Trust or Gift Annuity, the charitable remainders of these arrangements can also be added to your Family Endowment Fund – a true legacy.
Once in place, your Family Endowment Fund will grow and make annual distributions to support the charities and/or charitable causes you’ve identified. For example, you could fund: religious education in your parish, tuition assistance, vocations, pro-life causes, etc. You decide.
A permanent endowment fund is managed to ensure a perpetual source of support so gifts will be distributed in your name for generations to come. And, once established, your children, grandchildren or other community members can add to the endowment to honor your legacy.
What is an endowment?
An endowment is a gift that gives forever. It is designed to provide stable, ongoing gifts to your favorite charities. The principal is preserved and grows through prudent investing, and grants are distributed to your chosen charities each year.
Why would I want an endowment?
To give a gift that leaves a lasting legacy that reflects your faith and values.
An endowment bears fruit forever. It ensures your favorite charities receive a steady stream of grants each year, providing them with stable support forever.
What gifts can go into an endowment?
A variety of assets can be used to fund an endowment. These include cash, appreciated securities, required minimum distributions from IRA accounts, real estate, personal property, and more.
If you have a specific asset in mind but aren’t sure if it could fund an endowment, give our team a call.
What are the costs associated with opening an endowment?
Other than the establishing gift, there are no upfront, out-of-pocket expenses.
We are responsible for investing the assets you contribute. An annual administrative fee of 0.80 – 1.00% charged against the balance of your endowment provides the resources necessary to keep our doors open and staff working on your behalf. An additional investment management fee of approximately 0.75% is paid to our investment managers.
What tax benefits will I see from opening an endowment?
You may see capital gains tax savings and estate planning benefits depending on your personal situation.
How is an endowment invested?
CCF invests endowments according to Catholic social teaching and the USCCB’s socially responsible investment guidelines. Endowments are invested in our long-term pool for balanced growth. This strategy – specifically designed for the perpetual investment of endowments – seeks to generate consistent income and growth over time. See the most recent performance report here.
Beyond simply screening investments, we leverage a newer tactic called “impact investing” that generates a fiscal return as well as a positive, measurable social impact. One example of this is investing in affordable housing development through CommonBond Communities. We not only receive a financial return, we also help sustain housing options for vulnerable populations.
How much will my chosen charities receive each year?
The amount that is distributed to your endowment’s beneficiaries is determined by something called a “spending rate.” Each year, CCF’s Investment Committee reviews and recommends a spending rate to CCF’s Board of Directors for approval. The rate is based on guidelines dictated by law. These include:
- the preservation of the endowment
- current economic conditions
- the possible effect of inflation or deflation
- the expected return and appreciation of investments
The spending rate is currently set at 4% of the average fund balance over the previous 20 quarters. Structuring the rate in this way protects against short-term market volatility and smooths distributions over time in order to deliver consistent income.
The ultimate goal when determining the spending rate is ensuring the endowments CCF stewards can provide perpetual grants.
What makes CCF different from a typical financial institution?
We do everything with a Catholic heart. That means investing according to Catholic social teaching and the USCCB’s socially responsible investment guidelines. We also screen grantees for alignment with Catholic values.
And, as a nonprofit, our only bottom line is ensuring your legacy lasts so our community continues to benefit from your faith-filled generosity.
Can I involve my family?
With an endowment, the beneficiaries are set by you and are unchanging. You can involve your family in that decision-making process.
If involving your family in your philanthropy is important to you, we can help you make a plan. We have other fund options that can include your family in making grant recommendations.
What are other giving options?
- An endowed donor advised fund enables a perpetual annual grant just like an endowment. The difference is that you, as the donor, are asked to choose different beneficiaries each year. This is a great option if you want to involve your family.
- A donor advised fund is a flexible tool that allows a donor to direct grants at any time in any amount greater than $200. Think of it as a charitable checking account. The balance can rise and fall as you make contributions and recommend grants whenever you’d like.
- An outright gift directly to the charity of your choice is always a valid and wonderful option.
Why an endowment rather than a large, one-time gift?
It depends on your giving goals. Let’s take a look at the benefits for each option.
- Ensures stable and ongoing financial support forever
- The beneficiaries can rely on – and more importantly, plan for – the grants the endowment yields
- Your intent is always honored, regardless of who leads the charitable organization
Large one-time gift
- Help organizations complete special projects
- Help meet large capital campaign goals
- Provide a much-needed lifeline to charitable organizations with immediate, specific needs
What if I don’t have $50,000 to open an endowment?
You can build your endowment over of time. One example would be using the required minimum distributions (RMDs) from your retirement account to fund your endowment.
Another option is to write your endowment into your estate plan. This way, your endowment will commence upon your death.
Will my endowment ever run out of money?
No. Endowments are designed specifically to slowly grow with each passing year. There are even state and federal laws that govern the management of these funds to ensure they last forever. CCF always complies with these laws when stewarding your gift to provide your favorite charities with annual support in perpetuity.
What happens when the market is down?
Endowments are designed to weather market changes by controlling the spending rate each year so as to preserve the principal. In years with higher market returns, the extra growth accumulates and acts as a cushion for years when the market is down.
Additionally, the strategy we use to invest endowment funds is diversified to yield steady, balanced growth over a long period of time.
I’m worried I will outlive my savings, so I don’t think an endowment is for me.
This is a very common concern. Many people choose to give upon death through an estate gift. That way, they feel financially secure today, and they know they can still leave a lasting legacy.
We’d love to chat with you about your giving goals to find the option that works best for you.
What is a beneficiary?
A beneficiary is a charity that benefits from your generosity. For example, if you list Catholic Charities as a beneficiary of your endowment, an annual grant will be given to them. You can list more than one charity as a beneficiary and choose what percentage of the annual grant each one receives.
With an amendment to the fund agreement, you can change beneficiaries. But after death, beneficiaries are permanent.
What if my beneficiary closes? Or my parish?
If any beneficiary closes during your lifetime, CCF will work with you to make necessary changes. If a beneficiary closes after your death, CCF will change the beneficiary to accomplish, as nearly as possible, the intended purpose of your gift. If your parish is merged, your gift will go to the newly-formed parish.