An endowment fund provides a source of annual income to a Catholic organization of the donor’s choice. An endowment can honor or memorialize a loved one, or establish a lasting legacy of faith, or support the donor’s chosen organization or cause. Because an endowment is designed to grow and last in perpetuity, it makes it possible for a donor to ensure long-term, everlasting financial support to a chosen cause.
Creating a new endowment fund requires an agreement between a donor and the Catholic Foundation. This agreement permanently defines the purpose, and outlines the procedures for managing the endowment funds. A standard language is maintained by the Catholic Foundation to ensure consistency in fund management. Usually an endowment can be started with am initial deposit of $50,000 or a plan to build to that amount.
What Assets Can Be Used to Establish Endowment Funds?
There are several financial assets that can be used to establish an endowment fund during a donor’s lifetime. These include:
- Cash gifts
- Securities – Avoid capital gains by donating appreciated stocks to an endowment fund.
- IRAs – An individual who is 70.5 years old or older may transfer up to $100,000 per year into an endowment fund without tax penalty.
- 401Ks – Transfer monies from your 401K into an IRA to make a gift to an endowment.
- Insurance Policies – Proceeds from a fully paid insurance policy may be donated to an endowment.
- Insurance Policies or Investment Funds Beneficiary Designation – Include an endowment fund as a full or partial beneficiary.
- Bequests – Include an endowment fund with the Catholic Foundation in your will or Trust documents.
Funds by Designation
