Leaving a Legacy for the Children of Tomorrow
If you have heard or read about the Margaret ‘Peg’ Knox Endowed Scholarship Fund launched recently by the Center’s Board of Trustees, you may have some questions about endowment. Here are answers to some basic questions.
What is an endowment fund?
Essentially, an endowment fund is one for which a donor stipulates that his or her contribution is to be held in perpetuity or for a term of years. Broadly speaking, Cedarcrest Center would use only income from endowment contributions to support a program designated by the donor (e.g., the Knox Scholarship) or for our general operations if a donor has provided no specific direction for use of the income.
In New Hampshire, as in many other states, a non-profit organization’s policies for management of endowed funds is governed by statute, specifically the Uniform Prudent Management of Institutional Funds Act (UPMIFA).
How is an endowment fund created?
The Margaret ‘Peg’ Knox Endowed Scholarship, as an example, was endorsed by the Center’s Board of Trustees with the understanding that it would be funded through a special donor appeal.
But individual donors may also establish endowed funds with bequests or outright gifts, or through a variety of other planned giving arrangements. An endowed fund can provide support for a program of significance to the donor, or can serve as a permanent memorial or tribute to a loved one, friend or colleague.
To ensure that Cedarcrest Center can meet the terms of endowment gifts, the Center’s trustees from time to time establish appropriate funding threshholds for specific types of funds, and may set minimum amounts for additions to existing endowment funds. All endowment funds must be formally endorsed by the trustees, and guidelines for their use documented in an agreement signed by the donor and the Center’s CEO.
Why are endowment funds important?
From Cedarcrest Center’s perspective, endowment funds diversify our sources of income, providing us greater financial stability and ensuring resources to meet the emerging needs of children who are medically and developmentally complex, even when there is no assurance of, or clarity about, other funding.
From your perspective as a donor, an endowment gift enables you to create a legacy to benefit future generations of children and and their families – an opportunity to achieve your philanthropic goals while addressing important financial and estate planning concerns as well.
If you have questions or would like more information about endowment gifts, please contact the Office of Development at Cedarcrest Center.