Hope Moravian Church
Endowment/Investment Guidelines
Introduction
The purpose of these guidelines is to establish policies for accepting, receiving and investing permanent funds and endowments that result from major outright and planned gifts. These guidelines apply to gifts for purposes other than the ordinary donations to the Church’s general operating budget.
Types of Funds
There are two types of funds that fall within the purview of these guidelines.
§ Donor Designated” funds resulting from outright and/or planned gifts to the Church in which donors stipulate, in writing, the purpose(s) and use(s) of the gift.
§ Board Designated” funds resulting from outright and/or planned gifts to the Church from donors that do not have any stipulation or requirement from donors concerning their use.
Donor Designated Funds
The Trustees deeply appreciate the fact that many donors wish to address specific needs that they see and believe in through outright or planned gifts. The Trustees will make every effort to insure that the Church complies with the donor’s wishes. However, prior to accepting a donor designated gift or gifts the Trustees will make every effort to understand the donor’s wishes and intentions to assure that the Church will be able to faithfully carryout the purpose(s) of the gift(s). In the event the Trustees determine that the gift imposes an undue restriction on the Church an/or compromises the mission and ministries of the Church, the Trustees may ask the donor or his/her representative to amend the designation in such a manner that it fulfills the donor’s wishes and intention(s) and does not impose an undue burden on the Church. If a mutually agreeable accommodation is not reached, the Trustees reserve the right to reject the intended gift to the Church.
Board Designated Funds
In many cases, major outright and planned gifts are given to the Church without any restrictions. While these gifts are blessings they impose a significant and important responsibility on the Trustees. These guidelines, therefore, set forth how these gifts will be used.
The Board has designated six general purposes to which undesignated major outright and planned gifts shall be allocated:
§The Music Fund shall support:
oThe acquisition of music, materials and capital items that support the choir and the Church’s music programs.
oConcerts sponsored by the Church for the community;
oAttendance by members of the Church involved in the music program to conferences and programs sponsored by the Moravian Music Foundation, the Bi-annual Moravian Music Festival and other programs and training deemed appropriate by the Board of Elders that further the Church’s music programs.
§The Mission & Evangelism Fund supports worldwide and local efforts to bring the Good News to the un-churched, to those who do not know Christ, and to the needy. Some of the efforts the Fund supports include:
oDirect aid for projects and needs of the Board of World Mission;
oMission trips, both internationally and domestically, by members of the Church;
oOutreach programs to the Hope community like the Monday Night Meal Site and Vacation Bible School;
oDirect aid to organizations like the Hope Food Bank, Hope Community Center, shelter programs for the homeless and battered spouses, and other community services that are consistent with the mission and ministries of the Church; and,
oOther efforts that brings the Gospel and the work of the Church to people in need.
§The Camp and Scholarship Fund supports children and youth of the Church through:
oScholarship programs to attend camps at Illiana, Tar Hallow, and Epworth;
oAn annual scholarship to one or more members of the Church who intend to pursue post-high school education (college, technical or trade);
oScholarship aid for members of the Church that are attending Moravian Theological Seminary or other denominationally approved seminaries; and,
oContinuing and post graduate education for the Pastor.
§The Building Fund supports capital projects and major repairs of the church and parsonage. For a project to qualify for this Fund, the total cost must exceed $5,000 and result in extending the useful life of the structure. Furthermore, the congregation will be expected to provide no less than 25% of the total cost of the project, through second-mile gifts. This Fund shall not be used to pay for routine maintenance and upkeep for the church and/or parsonage.
§Morning Star Preschool Fund supports the preschool by:
o Supplying educational materials, equipment, and increased, qualified staff to serve and be utilized in the instruction of the community's preschool-aged children;
o Funding tuition scholarships for preschool students in an effort to support and reach out to the community's families in need; and
o Providing capital improvements such as outdoor recreational equipment, computer systems, etc. intended to enhance the preschool's mission of providing a Christ-centered learning experience involving safe, loving, and secure exploration and discovery.
§Cemetery Fund supports the perpetual care and upkeep of the Hope Moravian Cemetery. Currently, there is adequate funding to meet all current and anticipated needs of the Cemetery. While the Church welcomes additional gift to the Cemetery Fund, members are encouraged to support other vital ministries, as mentioned above. If at any point, this Fund is not adequate to meet the needs of the Cemetery, this policy shall be revised.
Types of Gifts
There are two types of gifts that fall with the purview of these guidelines:
1.Major Outright Gift - A gift or pledge in excess of $500 that has not been designated for the Church’s operating/general budget. A Major Outright Gift may consist of cash, stocks, bonds, mutual funds and/or other marketable securities. Other property, such as real estate, boats, cars and other items where there is a ready-market may also be given; however, in these instances an agency of the denomination, the Moravian Ministries Foundation, will be asked to assist the trustees prior to acceptance. The trustees reserve the right to refuse any gift that may burden the Church with a current or future liability equal to or in excess of the value of the gift.
2.Planned Gift - A gift made by bequest, revocable or irrevocable trust, gift annuity, retirement plan, life insurance and the like. In the event the planned gift consists of real estate, boats, cars or other items where there is a ready-market may also be given; however, an agency of the denomination, the Moravian Ministries Foundation, will be asked to assist the trustees prior to acceptance. The trustees reserve the right to refuse any gift that may burden the Church with a current or future liability equal to or in excess of the value of the gift.
All gifts of marketable securities will be liquidated upon receipt. The Church will maintain a brokerage account for the purpose of receiving and liquidating the donated assets.
Accounting and Reporting
All Donor and Board Designated Funds will be accounted for separately and reported to the congregation at Church Council. In addition, an annual report on the use of all Funds will also be provided at Church Council.
The Trustees will also provide a written acknowledgement to the donor or donors of the gift.
Investing Funds
Both Donor Designated and Board Designated Funds will be invested in a diversified portfolio of stocks and bonds. The options for investing the funds shall include:
§a “growth allocation” consisting of approximately 70% equities and 30% fixed income securities;
§a “balanced allocation” consisting of approximately 50% equities and 50% fixed income securities; and/or
§an “income allocation” consisting of approximately 30% equities and 70% fixed income securities.
The selection of the allocation for each Donor and Board Designated Fund shall consider the goals and purposes of each fund and the risk tolerance of the Church to the marketplace. In most cases, the investment time horizon is in perpetuity, and therefore, primary consideration should be given to economic and market trends over a five to ten year period.
It is important to note that there may be times when there are market conditions that affect the performance or value of the funds, significantly. While the trustees will not engage in so-called ‘market-timing,’ from time-to time the Trustees will evaluate and affirm or change the asset allocation. Nevertheless, investing in the stock and bond market always has an element of risk; however, the Trustees believe that over the long term the Funds will greatly benefit from being invested in a diversified portfolio.
Distributions
Unless otherwise prescribed by the donor, the Trustees shall make annual distributions to carryout the purposes or purposes of the fund, using one of the following methods:
§The Total Return Method - considers the Net Asset Value (NAV) of the fund, regardless of the rate of return, computed against a percentage amount that will be no less than 5% and no greater than 7%.
§The Income Method - considers the income generated by the fund through interest, dividends and realized capital gains.
§The Dollar Method - is a dollar amount allocation from the fund determined by the Trustees, without regard to the NAV or the income generated.
The Trustees shall annually adopt one method for each Donor and Board Designated Fund; however, the Trustees shall not be obligated to make a distribution in the event there is not a need.
Recognition
The Trustees will be bound by the principle that the donor’s wishes with regard to naming and recognition will prevail. Therefore, if a donor wishes to remain publicly anonymous about the gift the Trustees shall honor the donor’s request.
If the donor wishes or agrees to public recognition of the gift, the Trustees will determine an appropriate and respectful method that is also satisfactory to the Church.
In the event the donor is silent on whether he or she desires any recognition, the Trustees will keep his or her name anonymous
In every instance the donor’s name and other known information about the donor will be recoded in minutes of the meeting where the Trustees accept the gift.
Other Provisions
From time-to-time the Church may need to respond to crisis needs that require the expenditure of funds well in excess of cash available from the operating and other reserve funds. In these cases, the Trustees shall have the option of either:
1.Liquidating needed assets in any or all the Board Designated Funds, and/or
2.Borrowing the funds from either the Board or Donor Designated Funds. If the Trustees wish to borrow funds, then there shall be a note that contains a payment plan, with interest. The fixed rate of interest shall be comparable to the prevailing rate for government securities for the length of maturity equal to the term of the loan.
In either case, the Trustee shall bring this matter before Church Council for its advice and consent.
Finally, the State of Indiana, through the, “Uniform Management of Institutional Funds Act, as amended” spells out duties, rights and obligations of charities and churches in their management of endowment and permanent funds. Therefore, it is the intension of these policies is to comply with the statue and any omissions shall default to the provisions in the Law.