December 2, 2009 // Local

Endowments and the Catholic Community Foundation

By Elisa Smith

What is the Catholic Community Foundation of Northeast Indiana?
The Catholic Community Foundation of Northeast Indiana (the foundation) is a religious organization that was incorporated in Indiana in 1994 by Bishop John M. D’Arcy under the name “Diocese of Fort Wayne-South Bend Endowment Trust” and has received 501(c)(3) tax-exempt status under the Internal Revenue Code.

What is the purpose of the Catholic Community Foundation of Northeast Indiana?
The purpose of the foundation is to provide a means for individuals and organizations that wish through long-term efforts to financially support the spiritual, educational and charitable needs of the Catholic Church. Through the establishment of individual endowments, the foundation generates income for parishes, schools, agencies and organizations and helps sustain the long-term strength and viability of the Catholic community in northeast Indiana.

Who manages the foundation?
The foundation is managed by an advisory board of directors comprised of clergy and lay persons. The directors are leaders in their parishes and communities. The financial statements of the foundation are audited each year to ensure accuracy and accountability by a certified public accounting firm. In addition, professional investment advisors manage and invest the assets of the foundation.

What is an endowment fund?
One aspect of our Catholic stewardship is to provide for future generations. An endowment can accomplish that mission. Unlike an offertory collection or annual appeal which is an expendable gift or immediately usable, an endowment is held in an investment fund set aside for the long-term support of an organization. The principal is preserved in perpetuity to provide future earnings for the benefit of a Catholic charitable cause. The income earned can be used according to the donor’s intentions.

What are the endowments established by the Legacy of Faith campaign?
In 2004, Bishop D’Arcy and the Diocese of Fort Wayne-South Bend embarked on a grand effort to raise funds for endowments through the Legacy of Faith campaign in order to strengthen Catholics in northeast Indiana for years to come. Endowments for Catholic education, Hispanic ministries, and Catholic Charities are accounted for and administered through the Catholic Community Foundation of Northeast Indiana.

Are endowments only for diocesan-wide projects like the Legacy of Faith campaign?
No. A donor may establish an endowment fund within the Catholic Community Foundation of Northeast Indiana for the purpose of a specific parish, school or other Catholic ministry. It may be a restricted gift for building maintenance or tuition assistance. Or an unrestricted endowment fund, which has no stipulation for use, can be set up if the donor wishes to provide the greatest good to those Catholic organizations in greatest need. The foundation holds approximately 100 endowment funds for parishes, schools and other ministries.

How are the assets in the Catholic Community Foundation of Northeast Indiana invested?
In January 2003, the diocese hired Jeffrey Slocum and Associates, Inc. as an investment evaluator to provide investment consulting and advice on all diocesan investment assets. Based on their analysis, the diocese switched from three custodians to one, Northern Trust, in early 2004. In addition, a new statement of investment objectives and policies was created. Now all assets including the assets of the Catholic Community Foundation of Northeast Indiana are pooled together with other diocesan assets and allocated to various investment managers. The diocese and Catholic Community Foundation of Northeast Indiana strictly adhere to morally and socially responsible guidelines in accordance with those set forth by the U.S. Conference of Catholic Bishops.

How do endowments further the mission of one’s parish and school?
As a parish grows spiritually and physically, its needs may exceed its financial means. Fluctuations and shortfalls in offertory collections and school tuition may lead to deferred maintenance of church and school buildings, inability to retain good teachers, and other program cutbacks.
Endowments are a way to stabilize income for years to come. Thus, they help parishes, schools and other Catholic organizations continue to carry out the work of Christ.

How much money is necessary to start an endowment?
An initial minimum gift of $5,000 is required for an individual or for a Catholic parish, school or agency to set up a separate endowment. Donors have the option of naming the endowment in their family’s name or in memory of a loved one.

Why would an individual or Catholic entity want to create an endowment fund?
An endowment can be the vehicle for an annual gift to continue each year to a parish even after the donor’s death. For example, let’s say that a donor contributes $1,000 per year to his/her parish. The donor could create an endowment that would be funded with $20,000 principal and would pay out 5 percent each year. This would provide the parish with $1,000 annually from this endowment to use as the donor chooses either in an unrestricted manner or for a restricted purpose.

An endowment can also be used to establish a scholarship fund for a Catholic school. Perhaps instead the donor would like to establish a scholarship fund for a student attending a Catholic school. If that same $20,000 were contributed initially, each year approximately $1,000 would be available for tuition assistance for a student attending that school.

Can the principal of the endowment fund ever be invaded and used?
The principal includes the initial contribution given to create the endowment as well as all additional contributions to the endowment. Endowments are permanent and therefore, principal is invested and the income used for the purposes in which the donor expresses.

What are the steps to establishing an endowment fund with the Catholic Community Foundation of Northeast Indiana?
• The donor, parish, school or agency would contact the diocesan development office and state that they would like to establish an endowment.
• After gathering the necessary information from the donor, an Endowment Fund Donation Offering Agreement would be drafted and sent for review.
• The donor signs the agreement and returns it to the development office. In return, the foundation representative would sign the agreement and return a copy to the donor for their files.
• The initial gift to the new endowment can be contributed currently or, if in the form of a deferred gift, can be contributed at a later time.

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