FundSvcs Community

I see most often option #1 (although I have seen #2, which I think is not being a proper steward of contributed assets - but that's just one person's opinion). The accumulated earnings do NOT lower the donor's funding requirement but, rather, are "reinvested" in the fund. If the donor fails to make the required investment in the endowment then their gifts are redirected to an expendable fund with similar spending requirements. The accumulated earnings can go to the same fund or you may have an institutional policy directing those to some other priority. As an aside, while building to permanent endowment status these funds are more commonly invested in the short-term pool. John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Sat, Feb 16, 2019 at 3:21 PM Anna Wilk < 0000000db8c39c8e-dmarc-request@listserv.fundsvcs.org> wrote: > Hi all, > > I was wondering if there was a best practice or what others were doing in > situations when a donor will want to create an endowment over a five year > period in amounts of $5,000 a year for 5 years ($25,000 is our threshold to > create an endowment). When does your organization start an endowment > account to receive earnings? > > 1. Do you start at year one when you receive the $5,000 so it can start > receiving earnings right away? > > With this idea, what do you do with the earnings made on the endowment? > Increase the FMV on the endowment or sweep the earnings to the organization > because the endowment has not reached the threshold yet to start an > endowment? > > 2. OR do you hold the money in a restricted account and once the full > $25,000 is reached then you move the money to receive earnings but this > would not happen until year 5, until then the money just sits? > > > Thanks for your input! > > Anna Simons > Saint Xavier University >

Hi all, I was wondering if there was a best practice or what others were doing in situations when a donor will want to create an endowment over a five year period in amounts of $5,000 a year for 5 years ($25,000 is our threshold to create an endowment).  When does your organization start an endowment account to receive earnings?  1. Do you start at year one when you receive the $5,000 so it can start receiving earnings right away?  With this idea, what do you do with the earnings made on the endowment?  Increase the FMV on the endowment or sweep the earnings to the organization because the endowment has not reached the threshold yet to start an endowment?  2.  OR do you hold the money in a restricted account and once the full $25,000 is reached then you move the money to receive earnings but this would not happen until year 5, until then the money just sits? Thanks for your input! Anna SimonsSaint Xavier University

Hi Anna, We would create a restricted account based on the pledge and start investing the funds into the endowment pool with the first payment. It would not receive spending distributions from the pool until it met threshold, but it would be participating in any market movements (hopefully upward ones). -Josh _____________________ Joshua S. Greenbaum 09B, Executive Director Advancement Information Services Emory University, Advancement & Alumni Engagement 1762 Clifton Road, Office 1456, Atlanta, GA 30322 Office: (404) 712-2020, Fax: (404) 727-4876 josh.greenbaum@emory.edu<mailto:josh.greenbaum@emory.edu> From: Advancement Services Discussion List <FUNDSVCS@LISTSERV.FUNDSVCS.ORG> On Behalf Of Anna Wilk Sent: Saturday, February 16, 2019 3:21 PM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG Subject: [FUNDSVCS] Growing to Endowed Accounts-When do earnings begin to accrue? Hi all, I was wondering if there was a best practice or what others were doing in situations when a donor will want to create an endowment over a five year period in amounts of $5,000 a year for 5 years ($25,000 is our threshold to create an endowment). When does your organization start an endowment account to receive earnings? 1. Do you start at year one when you receive the $5,000 so it can start receiving earnings right away? With this idea, what do you do with the earnings made on the endowment? Increase the FMV on the endowment or sweep the earnings to the organization because the endowment has not reached the threshold yet to start an endowment? 2. OR do you hold the money in a restricted account and once the full $25,000 is reached then you move the money to receive earnings but this would not happen until year 5, until then the money just sits? Thanks for your input! Anna Simons Saint Xavier University ________________________________ This e-mail message (including any attachments) is for the sole use of the intended recipient(s) and may contain confidential and privileged information. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copying of this message (including any attachments) is strictly prohibited. If you have received this message in error, please contact the sender by reply e-mail message and destroy all copies of the original message (including attachments).