Articles
Endowment Fund Committee Policies and Procedures
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DUPAGE UNITARIAN UNIVERSALIST CHURCH
Endowment Fund Committee
Policies and Procedures
Responsible entity: Endowment Fund Committee
Revised April 23, 2013 Paragraph B
Reviewed Oct 21, 2012 no changes
Approved: April 4, 2006
Governing Principles
The primary function of the Endowment Fund Committee is to exercise custodial and managerial control over the Endowment Fund. The Enabling Resolution for the Endowment Fund, adopted by the congregation on January 12, 1992, established the governing principles for the Endowment Fund. These principles are as follows:
1. The purpose of the Endowment Fund is “. . . to receive and invest special gifts apart from the general operating budget and other funds of the church . . . .”
2. The income generated by the Endowment Fund shall be used for the benefit of the Church in a manner consistent with the budgeting process prescribed in the Church constitution.
3. All principal amounts will be retained by the Endowment Fund and only the income will be spent. However, under “temporary, difficult circumstances, and where integrity of gift restrictions permits,” a portion of the Endowment Fund’s principal may be used for operating budget items. Such use of the Endowment Fund’s principal may only occur “by action in meeting assembled, by two-thirds majority of the church members voting.”
Committee
The elected Endowment Fund Committee members annually select a Chairperson, a Financial Secretary, and a Recording Secretary. Please refer to the Endowment Fund Committee’s committee description for information about the tasks assigned to these positions.
Investment Management Policies for the Endowment Fund (hereafter “Fund”)
A. The Endowment Fund Committee has adopted an investment strategy emphasizing the long-term growth of capital with a secondary objective of achieving current income for the Fund. This means investing primarily in equity securities. Because the goal is to accumulate a Fund to support long-term future activities, it is appropriate to adopt a policy of long-term growth of capital. The Committee recognizes that the principal balance of the Fund will fluctuate and be more volatile with this approach than if an investment policy emphasizing stability of principal were adopted.
B. The initial investment policy will be continued until the balance of the Fund reaches the "Threshold Value". Until this goal is achieved, the normal operating procedure will be to reinvest all income after the payment of current operating expenses of the Fund and those expenses of the Endowment Fund Committee not covered by any allocation to the Committee from the Church’s annual operating fund.
C. The investment policy shall be implemented by investing in at least two Securities and Exchange Commission registered open-ended investment management companies (i.e. mutual funds or other investment vehicles). These accounts shall be in the name of the DuPage Unitarian Universalist Endowment Fund. The signatures of two members of the Endowment Fund Committee shall be required for all withdrawals from these accounts.
D. In determining which investment vehicles to select for investment, the Endowment Fund Committee will be guided by the Enabling Resolution that specifies that investments be “wise, prudent, and socially responsible.”
E. The Financial Secretary shall be responsible for continually monitoring the performance of the investment vehicles, shall report at least quarterly to the Committee on their performance, and shall report immediately to the Committee any developments that might require prompt attention.
Receipt of Requests and Contributions
All funds received by the Endowment fund shall be immediately deposited in a restricted fund in the Church’s general bank account. The Committee determines when, and in which investment vehicle, accumulated funds should be invested. The Financial Secretary then coordinates with the Church Treasurer to have a check drawn and mailed to the selected investment firm. As a general practice, the Committee has chosen to leave sufficient funds in the Church’s checking account so that there are funds available for possible Committee expenses.
Conflicts of Interest
No Fund assets shall be invested in any entity directly or indirectly controlled by, under common control with, or affiliated with any member or friend of the Church or their immediate families. No fees, commissions, or other consideration, direct or indirect, payable in cash or in kind, shall ever be paid to any member or friend of the Church or their immediate families in connection with Fund assets and activities.
Restrictions on Borrowing
The Fund assets shall never be pledged, liened, or otherwise encumbered. The Fund shall not borrow money or incur any liabilities, except those arising from its ordinary course of business.
Financial Reporting Procedures
A written report of all Fund activities shall be made quarterly to the Board, annually to the congregation, and upon request in connection with other Church business meetings. Because all Fund assets are invested in shares of publicly available investment vehicles, and all initial receipts are deposited in the Church’s audited general banking account, an independent audit of the Fund will not be required.