FundSvcs Community

Good morning.  We have a donor that wishes to fund a virtual endowment.  They want to fund the endowment through a new Bequest and create a 5 year pledge to pay based on the current endowment spending rate. This is the first virtual endowment for our organization so I have a few questions.  Has anyone else handled these before?  How do I record the pledge payments?  I would need a separate (non-endowment) account since the funds are being "spent", correct?  Are there organizations out there that do not accept Virtual Endowments as part of their Gift Acceptance Policy? Others have told me I need to reduce the Bequest each year for the amount of the pledge payment.  Would appreciate any guidance offered.

Thanks

Margaret McGraw

Hi Margaret,

Emily Konisky from Emory here. This is the first I've heard of a virtual endowment, so I can't speak to that exactly. What I can tell you is that the trifecta endowment gift at Emory is: 5 year major gift pledge with payments to the corpus, 5 year lead annual gift

pledge to cover what the endowment distribution WOULD be once fully funded, and then a bequest to grow the endowment after the donor passes.

What you are describing basically nixes the "in life" creation of the endowment. If I were asked to do this at Emory we would essentially book 2 pledges, one for the bequest expectancy with the provision to establish an endowment and the other to establish a named expendable fund that the donor would contribute to in life. We've had cases where we've done this and then if expendable find us still active by the time the bequest is realized, that fund becomes the distribution account for the endowment.

Just my 2 cents.

Cheers from Atlanta,

Emily

Good morning.  We have a donor that wishes to fund a virtual endowment.  They want to fund the endowment through a new Bequest and create a 5 year pledge to pay based on the current endowment spending rate. This is the first virtual endowment for our organization so I have a few questions.  Has anyone else handled these before?  How do I record the pledge payments?  I would need a separate (non-endowment) account since the funds are being "spent", correct?  Are there organizations out there that do not accept Virtual Endowments as part of their Gift Acceptance Policy? Others have told me I need to reduce the Bequest each year for the amount of the pledge payment.  Would appreciate any guidance offered.

Thanks

Margaret McGraw

Hi Margaret,

Emily Konisky from Emory here. This is the first I've heard of a virtual endowment, so I can't speak to that exactly. What I can tell you is that the trifecta endowment gift at Emory is: 5 year major gift pledge with payments to the corpus, 5 year lead annual gift

pledge to cover what the endowment distribution WOULD be once fully funded, and then a bequest to grow the endowment after the donor passes.

What you are describing basically nixes the "in life" creation of the endowment. If I were asked to do this at Emory we would essentially book 2 pledges, one for the bequest expectancy with the provision to establish an endowment and the other to establish a named expendable fund that the donor would contribute to in life. We've had cases where we've done this and then if expendable find us still active by the time the bequest is realized, that fund becomes the distribution account for the endowment.

Just my 2 cents.

Cheers from Atlanta,

Emily

Good morning.  We have a donor that wishes to fund a virtual endowment.  They want to fund the endowment through a new Bequest and create a 5 year pledge to pay based on the current endowment spending rate. This is the first virtual endowment for our organization so I have a few questions.  Has anyone else handled these before?  How do I record the pledge payments?  I would need a separate (non-endowment) account since the funds are being "spent", correct?  Are there organizations out there that do not accept Virtual Endowments as part of their Gift Acceptance Policy? Others have told me I need to reduce the Bequest each year for the amount of the pledge payment.  Would appreciate any guidance offered.

Thanks

Margaret McGraw

Hi Margaret,

Emily Konisky from Emory here. This is the first I've heard of a virtual endowment, so I can't speak to that exactly. What I can tell you is that the trifecta endowment gift at Emory is: 5 year major gift pledge with payments to the corpus, 5 year lead annual gift

pledge to cover what the endowment distribution WOULD be once fully funded, and then a bequest to grow the endowment after the donor passes.

What you are describing basically nixes the "in life" creation of the endowment. If I were asked to do this at Emory we would essentially book 2 pledges, one for the bequest expectancy with the provision to establish an endowment and the other to establish a named expendable fund that the donor would contribute to in life. We've had cases where we've done this and then if expendable find us still active by the time the bequest is realized, that fund becomes the distribution account for the endowment.

Just my 2 cents.

Cheers from Atlanta,

Emily

Good morning.  We have a donor that wishes to fund a virtual endowment.  They want to fund the endowment through a new Bequest and create a 5 year pledge to pay based on the current endowment spending rate. This is the first virtual endowment for our organization so I have a few questions.  Has anyone else handled these before?  How do I record the pledge payments?  I would need a separate (non-endowment) account since the funds are being "spent", correct?  Are there organizations out there that do not accept Virtual Endowments as part of their Gift Acceptance Policy? Others have told me I need to reduce the Bequest each year for the amount of the pledge payment.  Would appreciate any guidance offered.

Thanks

Margaret McGraw