You may be one of the many individuals who regularly contribute to our organization, and we thank you for your faithfulness. You may have thought about how to ensure that your support continues indefinitely into the future; one way is to endow your gift.
To create an endowment, you would leave a certain sum through your will or living trust or perhaps name us as a beneficiary of a retirement plan or life insurance policy. That sum would be used to establish a permanent fund in your name. The distributed income from the fund would be a continuation of your annual gifts.
The size of an endowment necessary to provide a certain annual sum depends on the distribution percentage, which is determined by our organization based on economic conditions. If for instance the distribution percentage 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. The annual distribution would of course be larger if the distribution percentage is set higher than 4 percent.
The distribution percentage is set so that the annual amount available for charitable purposes keeps pace with inflation. The plan 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 the annual distributions will increase correspondingly.
Our records will associate the endowment income with you. So in a sense you will be an annual contributor indefinitely, and you can thus ensure that the charitable projects you value will not be diminished.
To learn more about the various ways you can endow your annual gift and possibly also realize tax benefits, please contact us.