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Decisions, Decisions, Decisions: What to Do With the Income from Permanent Funds
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Decisions, Decisions, Decisions: What to Do With the Income from Permanent Funds
Presenter: Kim Warner
Vice President, Texas Presbyterian Foundation
From both a Stewardship and a Marketing standpoint there are four key elements that make up a healthy and growing ministry of permanent funds:
- How funds are invested
- How much each year from the funds are expended
- What those funds are spent on
- How well this is interpreted to the congregation
Key factors under girding the above observations:
Prudent investment calls for a 60% Equity/40% Fixed asset mix
Spending rate/policy
Give it all now or a lot more later
--If you are patient you can do far more
4% to 6% annually is the recommended rate
--Simply building a pile or risk running out
Why “income only” has to be handled carefully
--The tail can wag the dog
Sometimes not spending anything is appropriate—for awhile
--Large Bequest or Fund buildup time period
Enhancing mission
Budget dependent vs. budget relieving
--The 15% Rule of Thumb
When a bequest can cost you your job
--Strengthen the heritage, avoid the unfamiliar
Mission matrix
Interpretation
Don’t do it if you can’t tell it
If you do it, tell it!
Please note that these are all samples and should not be used without careful review.
This is not intended to be legal, financial or accounting guidance but as a guide for the church to write its own material according to your local needs and restrictions. Please refer to your own accountant or attorney for accounting and specific legal counsel.