The UUSMC Board of Trustees has approved the establishment of an Endowment Fund for the Church as part of our overall Legacy Giving process. In August of 2020, we opened an account with the UUA Common Endowment Fund, and this document describes the programs and policies that govern its use, and the procedures that are used to access the fund.

Legacy Giving

Legacy Giving can be defined as special monetary gifts over and above pledge and plate offerings. Our church has been blessed in the recent past with a number of substantial legacy gifts that have been important to our financial stability.

Legacy giving includes end-of-life giving as well as special gifts from our members for either, 1) specific (designated) purposes, or 2) general gifts (non-designated) for Church operations.

All legacy giving is managed by the Finance Committee, under the oversight of the Board of Trustees.

UUSMC Endowment Fund

While our Legacy Giving has been very beneficial to the financial health of the Church, a key ingredient has been missing, and that is a long-term investment program that will yield important cash flows for us in the future. For organizations like UUSMC, an endowment fund is the mechanism that the Board of Trustees has chosen for our investment program.

There are two options for the management of the fund: 1) self-managed using an internal EF Committee, or, 2) join the existing UUA Common Endowment Fund by investing in Units or shares of that fund. Members of the Finance Committee have researched the UUA fund, and attended several seminars hosted by the leaders of the fund. Based on the input of those people, the Board of Trustees has approved the use of the UUACEF as the management system for the UUSMC fund.

The UUACF is managed by the UUA staff through a group of expert financial advisors. The Fund practices socially responsible investing.  For further information on the UUA CEF, please visit http://uucef.org/.

How the UUA Common Endowment Fund Works

Legacy gifts to the UUSMC Endowment Fund are invested in the UUA CEF, and managed by the UUSMC Finance Committee. These gifts can include End-of-Life giving as part of a will, as well as special gifts from members as described in the above table.

Fund Operation

An initial investment of $10,000 is required to open an account. These funds were raised internally during the spring and summer of 2020, and the UUSMC account opened in August 2020.

Legacy gifts that are designated by members for the Endowment Fund are added to the UUSMC Fund account principal through the purchase of units or shares of the UUA Fund. The Funds are invested for the purpose of the generation of future cash income for UUSMC. The income comes in the form of optional quarterly payouts to UUSMC, anywhere from 0 to 6% per annum of the value of the current portfolio.

UUSMC Policy regarding the use of Endowment funds[1]

Principal

The purpose of the UUSMC EF is to invest in a fund that provides for long-term cash outflow. Any reduction in an account principle may lead to a reduction in those cash flows.

The intention of the Board of Trustees is to use funds from the principle only in the case of extreme emergency, or a major opportunity for the Church, and the Board recognizes that it cannot foresee the future, and therefore must allow future Boards the flexibility to determine for themselves the conditions under which portions of the principle are withdrawn.

Cash Payouts

Setting the level (from 0 to 6% of the Principal): UUSMC will set the payout level at 0% until such time as the payout level will be significant enough to warrant withdrawal. This is a Board decision with input of the Finance Committee. For example, if the fund reaches $100,000 through legacy giving, the annual payout could be $6,000 if set at the Maximum of 6%. At $250,000, that would amount to $15,000.

Use of UUSMC EF cash proceeds: Options: 1) Transfer to the Operating Fund for day-to-day use 2) use funds to help fund important Church projects, 3) use to help fund important service projects in the community or beyond.

Use of cash payments are determined by the UUSMC Board of Trustees based on the recommendations of the Finance Committee

Procedures for Giving to the UUSMC Endowment Fund

The procedure for placing a gift into the UUSMC Endowment Fund is as follows:

1. Donations to the UUSMC Endowment Fund will be tracked in our accounting software program.
2. Members should write checks to UUSMC documenting Endowment Fund donation in the memo line, and send to the Minister or UUSMC Admin.
3. Checks are deposited into the UUSMC checking account.
4. The UUA Common Endowment Fund allows its members up to one deposit per month, so if more than one member donation is received during a calendar month, they need to be consolidated into a single deposit.
5. At the end of each month as needed, the Church Admin will:
   1. Fill out Contribution Form
   2. Return the form along with a check for the month’s total contribution to the address shown on the form
6. The Church Bookkeeper will then document this addition to the Endowment Fund so it is reflected as both an Asset and Restricted Net Asset in our monthly Statement of Financial Position reporting.

Building the UUSMC Endowment Fund and legacy giving in general

Developing and managing a successful endowment fund and legacy giving program requires a consistent effort to communicate with the congregation as to the importance of giving for the long-term needs of the Church.

The responsibility for managing the Legacy Giving program lies with the Finance Committee, with the oversight of the Board of Trustees. The Finance Committee will appoint a leadership team to work with the congregation and Church administration to develop the communications tools to educate the membership, acquire marketing materials for dissemination to the membership, be available for members who wish to learn more about the fund and legacy giving, and ultimately assist them as needed to complete the transaction.

[1] Formulated by the UUSMC Board of Trustees on April 11, 2018