Blue

Draft #4

May 8, 2015

 

Proposal to Establish the

 

Atonement Endowment Program

 

by Endowment Structure, Procedures, and By-laws Subcommittee

(Cheryl Arnold, Paul Dunker, Bernie Erven, Debbie Luttrell, Erika Senk)

 

I. Introduction

                God has generously blessed Atonement Lutheran Church (ALC) for 50 years. ALC's Stewardship Committee is proposing the establishment of the Atonement Endowment Fund in thanksgiving. We look back on many blessings and forward in anticipation of open doors for new ministries. We do so believing there will always be opportunities to serve our Lord and church during the next 50 years. A congregation that has been generous in the past with its commitments of time and financial blessings now welcomes new possibilities. We celebrate the saints of Atonement and their numerous gifts.

                Stewardship is our opportunity to give back out of a sense of appreciation for blessings received. It is essential for the support and viability of our beloved staff, place of worship and diverse ministries. An endowment program can be an integral part of our stewardship. Its distinguishing characteristic will be a commitment to the congregation’s future into perpetuity, i.e., as long as the Lord calls us to ministry in this place.

                An endowment program adds to our current stewardship program and in no way detracts from it. In fact, many congregations have found that the addition of opportunities for investment in ministry brings increases in both current giving and giving for the future. Atonement is called to be financially prepared for the present as well as the future. This financial preparedness combines: (1) annual giving for the operating budget, (2) capital giving, e.g., for a building program or for major renovations, (3) designated giving, e.g., youth mission trip and (4) endowment giving. Atonement throughout its 50 years has had the first three kinds of giving; now we are proposing to complete the stewardship picture by adding the fourth: an endowment program.

                The Atonement Endowment Program will be an Atonement designated gift fund owned by the church in the same way that other designated funds and assets of the congregation are formally owned by Atonement Lutheran Church. All ALC stewardship programs are managed with prudence following guidelines set forth in the church's constitution and by-laws. An endowment program adds to rather than subtracts from or changes our stewardship program.

                The Voters Assembly's approval of this proposal will establish the Program. The proposal’s policies and procedures will guide the Stewardship Committee’s leadership and administration of the Program. The Stewardship Committee, rather than a new committee or board will lead the Endowment Program. This assures a tie of the Endowment Program to financial management of the church, Church Council and the Voters Assembly. The Chair of Stewardship is a member of Council and the Church Treasurer is a member of the Stewardship Committee.

 

 

 

II. Statement of Purpose

                The overarching purpose of the Endowment Program is to help Atonement build up the Kingdom. Specific goals are to:

 

  1. Support Atonement’s mission. The ways in which the Endowment Program evolves will directly reflect the evolution of Atonement’s mission. Flexibility rather than rigidity, creativity rather than tradition, and forward thinking rather than unadventurous timidity will characterize this Program’s movement forward.
  2. Provide opportunity for Atonement members and friends of Atonement to impact the congregation and its mission long-term.
  3. Encourage and receive gifts and bequests from members and friends of Atonement.
  4. Prudently manage the Endowment's principal including preservation of its purchasing power.  
  5. Help Atonement’s pastor, teachers, staff and members to think effectively about mission and program opportunities and to put forth proposals for action on these visions.
  6. Annually fund one or more proposals that are supplementary to the church budget.

 

                This statement of purpose intentionally imposes no particular order or set of priorities on what the Endowment Program will support. The following is illustrative and in no particular order: educational ministries, missions, human care needs, music, pilot projects, worship, general capital improvements, building and grounds maintenance, and building and grounds renovation.

 

                We pray that for many years to come the enthusiasm and vision for the Endowment Program will echo the great hymn, We All Are One in Mission.

 

                                                                           We all are one in mission

                                                                               Our varied gifts united

                                                                              By Christ, the Lord of all.

 

                                                                               Our ministries are varied

                                                                               Our purpose is the same:

                                                                             To touch the lives of others

                                                                          Through God's surprising grace.

 

 

III. Leadership and Administrative Structure for Atonement Endowment Fund

 

A. Development of a Proposal

 

                The process began with appointment by the Stewardship Committee of a subcommittee called the Endowment Structure, Procedures and By-laws Subcommittee. The appointment came soon after Stewardship made a commitment with Council support to establish an endowment program.

                Five people were appointed to the subcommittee with the chair coming from the Stewardship Committee. This subcommittee was charged with studying the structure, functioning and accomplishments of endowment programs established by other churches, consulting with knowledgeable people on the establishment of endowment funds and then writing a proposal to be carefully reviewed both internally and externally and ultimately approved by Stewardship and Council for submission to the Voters Assembly. The subcommittee was intended to continue functioning only until Voters Assembly approval of the Atonement Endowment Program.

 

B. Overall Leadership and Administration of the Endowment Program

 

                The Stewardship Committee will be responsible for the overall leadership and administration of the Endowment Program as established by Voters' Assembly. This will include:

  1. Promoting the Endowment Program and growing the endowment principal.
  2. Developing and administering gift acceptance guidelines
  3. Managing all assets received as gifts or earnings from the Program's three funds: Unrestricted, Temporarily Restricted and Permanently Restricted
  4. Selecting and working closely with a fund manager.
  5. Determining when awards from the endowment will be made.
  6. Determining the total amount of awards to be granted each year for endowment projects.
  7. Reporting annually to Council and Voters' Assembly on the functioning and progress of the Endowment Program.
  8. Proposing to Council any needed changes in guiding principles, procedures and organizational structure of the Endowment Fund.

 

C. Endowment Program Awards Committee

 

                This five-person committee will include the Congregational President or the President's designee plus four other members to be appointed by Council from among the current membership of the congregation. Appointees' terms will be for four years after random assignment of 1, 2, 3 and 4 year terms for the appointed members of the original committee. One new member will then be appointed by Council each year. Consecutive four year terms of appointees are not allowed. A person serving out an unexpired term of a previous member can be immediately appointed to a new four year term. No current Council member (other than the President or the President's designee), Stewardship Committee member or staff member may be appointed to serve on the Committee. (Staff is defined to include the pastor, pastor emeritus and all full- or part-time employees of ALC.) The Awards Committee may invite the Pastor to attend Awards Committee meetings in a non-voting advisory capacity. Transfer of membership out of the congregation or the inability to participate because of distance, schedule or health issues will be basis for the other four members by majority vote to declare an Awards Committee position vacant. Council will appoint any needed replacements to serve out the terms of people who have left the committee.

                The Awards Committee will have the following responsibilities:

  1. Annually select its Chair, Secretary and Proposal Facilitator.
  2. Assure that Endowment Program awards are made following the guidelines and purposes set forth in this document.
  3. Publicize to the staff and congregation the availability of endowment monies to be awarded in the coming year.
  4. Develop and keep current a set of guidelines and a 1-2 page proposal form for staff and Atonement members wishing to submit project proposals.
  5. Develop and conduct training programs as needed on proposal development for those wishing to submit proposals.
  6. Receive project proposals from staff and members of the congregation.
  7. Select proposal(s) to be funded.
  8. Award the amount of money each year that the Stewardship Committee has determined to be available.
  9. Receive brief reports on outcomes from use of the Endowment awards.
  10. Report in writing to the Stewardship Committee annually. The annual report may include suggestions for improvement of the awards program.

IV. Options for Giving to the Endowment Fund

 

A. Funds

                Donors (ALC members and friends and others) to the Endowment Program principal will have the option of making restricted or unrestricted gifts consistent with the policies and procedures described in this section. Unrestricted gifts will be added to the Fund's principal and earnings will be used to support projects consistent with the procedures explained later in this proposal. Earnings from restricted gifts will be used only for projects consistent with instructions for use of earnings incorporated into the description of the fund. (Donors wishing to have ALC use up the dollar value of their gifts rather than use only the earnings from the principal should chose to make a designated gift to the church rather than make a gift to the Endowment Program.)

               

                More specifically, donors will choose one of four funds:

 

  1. Permanently Unrestricted: Net annual earnings after an allowance for maintenance of buying power will be awarded annually on a project by project basis.
  2. Temporarily Restricted: Donors can designate their gifts for a temporarily restricted fund, e.g., building fund until the project is completed or abandoned at which time unused gifts for the specified purpose will become unrestricted and transferred to the unrestricted fund unless a donor has specified otherwise. This fund assures that all earnings will be added to the principal until the project is completed or abandoned.  
  3. Permanently Restricted by Donor: Donors of $50,000 (amount to be adjusted every five years by Consumer Price Index) or more can designate permanent restrictions on how earnings can be used provided the restrictions are consistent with policies and procedures incorporated into this document. Donors establishing this type of fund have naming rights for the fund. Net earnings from this fund can only be used for the purposes designated by the donor and approved by the Stewardship Committee.
  4. Permanently Restricted by Voters Assembly: Voters Assembly on recommendation from the Stewardship Committee can establish a permanently restricted fund for a specific purpose. For example, an endowed fund can be established with the earnings minus an allowance for maintenance of buying power used only for maintenance projects approved by the Board of Trustees. The principal would remain in perpetuity.

 

                The endowment program will have only the four funds listed. Nevertheless, the Stewardship Committee and Voters Assembly will be ever alert to the possibility that such a limitation on creation of funds could become counterproductive to the goals of the Endowment Program. Under no circumstances, however should the policy on number of funds lead to: (a) the proliferation of named funds with small and stagnant balances, (b) funds created by individuals without consideration of the overall goals of the Endowment Program, and/or (c) creation of vaguely defined and unfocused funds.

 

 

 

                This table summarizes how endowed giving fits into the overall giving program for ALC:

 

 

Type of Giving

General Use

Examples of Specific Uses

1

Annual

Church operating budget

Salaries, utilities, Sunday School

2

Capital

Approved capital expenditures

Building program, major renovations

3

Designated

Uses designated by donors

Youth mission trip, music fund

4

Endowment

Undesignated & designated projects

Projects proposed by staff and/or members and approved by Awards Committee

                This table summarizes how designated and various endowed options differ from each other:

 

Category of Gift

Both Principal and Earnings Used Up?

Principal Held In:

Who Decides How to Use?

1

Designated gift

Yes

ALC Savings Account

Council and Treasurer

2

Endowment Permanently Unrestricted

No

Endowment Fund

Awards Committee from proposals received

3

Endowment Temporarily Restricted

Yes

Endowment Fund

Stewardship Committee and Council

4

Endowment Permanently Restricted by Donor

No

Endowment Fund

Donor of $50,000 or More and Stewardship Committee

5

Endowment Permanently Restricted by Voters Assembly

No

Endowment Fund

Voters Assembly

 

 

B. Gift Acceptance Procedures  

                The Stewardship Committee will accept gifts and bequests on behalf of Atonement Lutheran Church and the Endowment Program. The gift acceptance process will follow procedures to be developed by the Stewardship Committee and approved by Church Council. The procedures will encourage gifts and receipt of funds consistent with the goals of the Endowment Program. The general guideline will be to accept most gifts. Exceptions to the general guideline would be justified when the likely net value of a gift is negative, e.g. a gift that requires legal and restorative costs totaling more than the gross value of the gift.    

                No later than one year after approval of the Endowment Program by Voters Assembly, the Stewardship Committee will propose to Church Council for approval a detailed set of guidelines for gift acceptance consistent with the guidelines set forth in this document.

 

C. Restrictions on Gifts

                There will be no minimum required monetary value for gifts, limitation on frequency of gifts or number of donors that can together give a single gift.

                Gifts with proposed restrictions inconsistent with the Endowment Program guidelines will be reviewed by the Stewardship Committee. The Stewardship Committee will stand ready to work with donors to help bring gifts into line with the guidelines.

 

D.   Liquidity of Gifts

                The general guideline is that a liquid gift, e.g., cash, or near liquid gift, e.g., readily marketable security is preferred to a gift difficult to make liquid. However, the Stewardship Committee will be responsible for decisions on acceptability of any gift and will develop a carefully crafted and understandable gift acceptance policy to guide its acceptance decisions.

 

E. Types of Gifts

                The following list is intended to help potential donors understand the acceptable range in possible gifts even though cash, checks or readily marketable securities are preferred:

  1. Life insurance and annuities
  2. Qualified and non qualified retirement plans
  3. Real property
  4. Real estate
  5. Bequests from trusts and wills
  6. Donor advised funds
  7. Charitable remainder trusts
  8. Charitable lead trusts
  9. Endowments

                Note that real property and real estate are potentially acceptable types of gifts even though the Stewardship Committee may find it necessary to assure that the net value of the gift is positive and readily convertible to a liquid form for addition to one of the three funds in the Endowment Program.

F. Gift Donation Forms

                Each donor of a gift will be asked to complete a gift donation form. (Appendices 1 and 2)   The form will ask the donor(s) to specify the amount of the gift or describe the gift, designate choice of a fund, provide contact information, give or withhold permission for public recognition and provide other information as appropriate.

                The church office will receive all gifts, assure that the gift is accompanied by a completed gift donation form and notify the Treasurer and Stewardship Chair of the gift's receipt.

 

G. Acknowledgement of Gifts

                The Stewardship Committee will offer pubic recognition and appreciation of a gift only after donor permission has been granted through the gift donation form. Two goals will guide acknowledgement of gifts. The first is to extend sincere and enthusiastic appreciation to donors. The second goal is to encourage generosity, discipleship and good stewardship of the gifts God has provided us. Any acknowledgement or recognition of gifts should avoid glorifying the donor beyond appreciation for the gifts of God and His Grace.

 

V. Administration of the Endowment Fund

 

A. Asset Management Procedures

                The Stewardship Committee will propose an investment policy to be approved by Church Council. This policy will guide Stewardship's management of Endowment Program assets so as to best accomplish the overall purposes of the Endowment Program. The policy will be applicable to all gifts regardless of their size, frequency or donor.   The investment policy will explicitly address the need for limitations on the type and manner of investments. The investment policy will also provide guidelines for preservation of buying power. The investment policy will be reviewed and updated as needed every three years.

                The assets of the Endowment will be held separately from any other ALC assets. There will be no comingling of the assets even if deposited with the same financial institution. The Endowment Funds will be deposited in various financial institutions at the discretion of the Stewardship Committee. The Stewardship Chair and Church Treasurer will maintain signatory authority over all assets of the Endowment Fund. The Committee will exercise prudence and appropriate care in all of its investment decisions.

                The Stewardship Committee is required by these asset management procedures to contract with an outside, experienced and proven organization to manage the financial assets of the Endowment Program. This contracted financial manager cannot be a person within the congregation or an internal congregational finance committee. The contracted external custodian firm, financial institution or investment management company will professionally manage the deposited funds of the Program. The Stewardship Committee will formally audit and review the contracted professional entity's performance every three years or more often if thought appropriate by the Stewardship Committee. These audits and reviews will be intended to assure the congregation that the assets are being prudently managed and the financial returns on the assets compares favorably with commonly accepted industry benchmarks.   Results of audits and reviews will be reported to Church Council and the Voters Assembly. Reports will describe any needed corrective action that the Stewardship Committee has decided to take.  

  

B. Endowment Fund Restrictions

                Restrictions on funds are of two types: temporarily restricted and permanently restricted. A donor (individual, family or organization) of gifts totaling $50,000 or more at one time or over a lifetime of giving has the option of designating permanent restrictions on how earnings can be used. Permanently Restricted Funds allow the donor to specify an intended use or uses defined into perpetuity. Naming rights will also come with the establishment of permanently restricted funds. A donor establishing a permanently restricted fund may designate a portion of the earnings from the fund to be transferred to the unrestricted fund.

                The Stewardship Committee may create temporarily restricted funds that donors can select for their gifts, e.g., building fund, until the project is completed or abandoned. The Stewardship Committee's creation of a Temporarily Restricted Fund will include specification of the explicit purpose(s) not defined as perpetual endowment support. Any principal and earnings left in the completed or abandoned project fund will be transferred to the Unrestricted Fund. Funds once transferred from a Temporarily Restricted Fund to the Unrestricted Fund will be comingled with other funds with no separate identity of these transferred funds being maintained.

 

C. Liabilities or Encumbrances of the Endowment Fund

                Loans of any kind for any purpose from the Endowment Fund are prohibited. Use of the Endowment principal as collateral for loans by ALC is also prohibited.

VI. Fund Distribution Procedures

 

A. Defined Purposes

                Support of Atonement's mission is the defined purpose of the Endowment Program, i.e., the reaching out with grace, passion and commitment both within ALC and externally. Project proposals for reaching out or support of such efforts will originate through the creative energies of Atonement staff and members. No prioritization of possible purposes of project distributions is included in the Endowment Program policies. The Awards Committee will make its choices for funding primarily on the basis of the proposals' demonstrated grace, creativity and passion for the proposed uses of awards funds. The Awards Committee is free to identify secondary considerations in addition to the primary ones listed.

                The criteria set forth in the previous paragraph will be used in each year's project awards. This means that support of highly promising ministry proposals will not be sacrificed to a goal of gaining equality among everyone wanting to share in fund distributions. Merit of proposals will drive awards; there is no goal of taking turns for rewards among various Atonement ministry programs.

                More than project start up or single year funding is allowed. What is funded from Endowment earnings is to depend solely on the quality, creativity and ministry-building features of submitted proposals. Nevertheless, no project or ministry should become dependent on Endowment funding long term.    

 

B. Restrictions on distributions

                The following are explicitly excluded from possible use of Endowment Fund principal: (a)Support of the church operating budget, (b)Cover of operating deficits previously accumulated and (c)Help in addressing financial crises stemming from dire circumstances.

 

C. Process for review and distribution of funds

                The Awards Committee will develop its own process for review of proposals and distribution of funds. The Awards Committee has the authority to adjust the dollar amount of awards from what has been requested in a proposal. These adjustments should be based on the merit of projects proposed, not on a desire to spread available funding over more than one or all of the proposals received.

                The Awards Committee has final say in award decisions. No appeal process or possibility for reconsideration of decisions is possible.

                Any unfunded project can be resubmitted keeping in mind that the makeup of the committee will change by one person each year.

               

D. Start up years of the Endowment Program

                Traditionally, new endowment programs specify a minimum principal balance that must be reached before any awards are made. This policy can result in several or many years without demonstration of the God pleasing results that can come from endowment gifts. For the Atonement Endowment Fund, the intent is to use early program awards to help generate enthusiasm for the Endowment Program and the accomplishments that will come from Endowment Program awards.   At least one project award starting the first year of the Endowment Program will be made. This award establishes immediately that the storing up of treasure here on earth is never to become the Program's goal. Instead, the Stewardship Committee will seek special gifts totaling $300 designated for distribution starting within one year of Program approval by Voters Assembly. One or more annual awards totaling $300 will continue to be made from special designated gifts until the earnings from the principal can start funding annual awards of at least $300.

 

VII. Other Policies and Procedures

 

A. Duration

                The Endowment Program's intended duration is for as long as the congregation shall continue its life of ministry and caring. As long as there is an Atonement Lutheran Church there will be an Atonement Endowment Program.

 

                The ALC constitution addresses the duration question relative to distribution of assets following a split in the congregation or total disbandment:

                "If, at any time, a division should take place on account of doctrine, the property of the      congregation and all benefits connected therewith, shall          remain with those communicant members who continue to adhere in confession and practice to Article III of this Constitution. If division takes place for any other reason, the property shall remain with the majority of the             communicant members. In the event the congregation should totally disband, the property             and all rights connected therewith shall be transferred to that District of The Lutheran Church-     Missouri Synod of which the congregation has been a member at the time of disbanding.”

               

                The justification for following these rules from the constitution is the nature of the endowment's principal. This principal will be an asset owned by Atonement Lutheran Church just as the church's land, building, equipment and furnishings are assets owned by the church.

 

B. Amendments

                The Stewardship Committee is authorized to make occasional minor changes in operational details of the Endowment Program. Minor fine-tuning changes are expected to be especially important during the start up period of the Endowment Program. The minor changes will be tied to the ability to accomplish the Endowment Program's goals as laid out in this document's Statement of Purposes.

                Need for amendments beyond minor changes in operational details is expected to be rare. Once the Stewardship Committee has established the need for a major amendment in policies and/or procedures, Voters Assembly action will be necessary for approval. To make changes in the Endowment Program that have been recommended by the Stewardship Committee, a super-majority of 75% of the eligible voters must vote in favor in two consecutive Voters Meetings that are separated by at least 30 days.



 

 

 

 

 

 

 

 

 

 

Appendix 1

Atonement Endowment Program

Donation of Cash, Checks or Readily Marketable Securities

                Earnings from the accumulated gifts to the Atonement Endowment Program are used to fund special projects not found in the day-to-day operating budget of Atonement Lutheran Church. Gifts to the Program are carefully managed for growth and earnings according to the Program's investment policies.

                There is no minimum required monetary value for a gift, limitation on frequency of gifts or number of donors who together can give a single gift . All gifts are subject to acceptance by the Atonement Stewardship Committee.

                More information about the Endowment Program and gifts to the Program can be obtained by contacting the church office at 614-451-1880 or (an e-mail address to be determined by Stewardship Committee).

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Submitted by:

                __________________________________________

                Name (s) of individual(s) or group (Please Print)

               

                ___________________________________         _________________

                Signature                                                                                             Date

               

                _________________________________________________________

                Mailing address

               

                ______________________             _____________________________

                Phone                                                                   Email address

 

I (We) wish to make a gift to the Atonement Endowment Fund. in the amount of $ ___________.

 

I (We)wish to designate the gift for:

 

                ____ General support of church projects

 

                ____ The following Atonement Lutheran Endowment Fund:                                                                                                                    __________________________________________

___ In memory of __________________________________________________

                                   Name

___ In honor of ____________________________________________________

                                   Name

 

___ Other (Please explain) _________________________________________________________________________________

 

Do we have your permission to offer recognition and appreciation within the congregation for your gift? (In no case will the amount of the gift be publicized. All donors will receive a receipt for tax purposes.)

____ Yes, you have my permission for recognition of my (our) gift within the congregation as a way of celebrating stewardship of our gifts.

____ No, I (We) ask that the gift receive no recognition other than a private communication from the person designated to receive the gift on behalf of the Endowment Program.

____ No, I(We) ask that the gift generate no recognition or private communication other than confirmation of the gift's receipt.

 

Comments or additional information:

 

 

Appendix 2

Atonement Endowment Program

Donation of Life Insurance, Annuities, Retirement Plan Proceeds, Real Property,

Real Estate, Bequests from Trust and Wills, Charitable Remainder Trusts, Charitable Lead Trusts and Endowment Proceeds

 

                Earnings from the accumulated gifts to the Atonement Endowment Program are used to fund special projects not found in the day-to-day operating budget of Atonement Lutheran Church. Gifts to the Program are carefully managed for growth and earnings according to the Program's investment policies.

                There is no minimum required monetary value for gifts nor is there a limitation on frequency of gifts or number of donors who together can give a single gift. All gifts are subject to acceptance by the Atonement Stewardship Committee.

                More information about the Endowment Program and gifts to the Program can be obtained by contacting the church office at 614-451-1880 or (an e-mail address to be determined by Stewardship Committee ).

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

I (We) wish to make a gift to the Atonement Endowment Fund. Please describe the gift you wish to make. What is the estimated value of the gift? $ _______

_____________________________________________________________________________________

_____________________________________________________________________________________

_____________________________________________________________________________________

 

I (We) wish to designate the gift for:

 

                ____ General support of church projects

                ____ The following Atonement Lutheran Endowment Fund:                                                                                                                    __________________________________________

Submitted by:

                __________________________________________

                Name (s) of individual(s) or group (Please Print)

                ___________________________________         _________________

                Signature                                                                                             Date

                _________________________________________________________

                Mailing address

                ______________________             _____________________________

                Phone                                                                  Email address

 

   ___ In memory of __________________________________________________

                                   Name

___ In honor of ____________________________________________________

                                   Name

___ Other (Please explain) _________________________________________________________________________________

Do we have your permission to offer recognition and appreciation within the congregation for your gift? (In no case will the amount of the gift be publicized. All donors will receive a receipt for tax purposes.)

____ Yes, you have my permission for recognition of my (our) gift within the congregation as a way of celebrating stewardship of our gifts.

____ No, I (We) ask that the gift receive no recognition other than a private communication from the person designated to receive the gift on behalf of the Endowment Program.

____ No, I(We) ask that the gift generate no recognition or private communication other than confirmation of the gift's receipt.

 

Comments or additional information: