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The following steps outline the process for
voluntarily establishing an account in The Catholic Foundation:
1. Identify the Need to
Create an Endowment
Parish/Diocesan leaders understand that many donors wish to endow
their cherished charity — their church — but do not know how to go about
doing that. Many other parish leaders see the necessity for having a revenue
source that will benefit the parish or diocesan entity into the future.
These leaders make a conscious choice to use memorial monies, bequests or
other revenues to establish an endowment account. Pastors and Diocesan
Directors who wish to establish endowment accounts must consult with their
Finance Council or appropriate supervisory authority before action can be
taken.
2. Define a Purpose
Leaders need to define for each account a clear purpose for which the earnings will be used into the
future. While the purpose should be clear, it should not be overly
restrictive. Some examples are for: The Mission and Ministries of a Specific
Parish, Parish Catholic Education, Parish Cemetery, Capital Improvements,
and so on.
3. Decide the
Investment Objective for the Account
The Catholic Foundation now offers a choice of distribution
options: Spending Rule or Total Return. Spending Rule
accounts feature a fixed percentage annual payout regardless of
investment earnings. The payout rate is reviewed and set annually by the
Foundation Board of Directors. There are no participant investment
choices required for this account type as the Board also determines how
these funds are invested. The current annual distribution rate has been
set at 5%. The Total Return option allows the participant to annually
withdraw (or retain) all earnings (if any). The Total Return
option also permits the participant to choose between three Investment Funds
in which to invest. If a
participant's primary objective is for dependable income return for current
operational budget needs, then the Income Fund
is chosen. If a participant's objective is a combination of growth and
modest income, the Balanced Fund is chosen. If a
participant's objective is long-term growth with no immediate need for
income and has long-term strategy for maximum growth, then the
Growth Fund is selected.
4. Determine the
Initial Amount to be Deposited
The Catholic Foundation accepts checks payable to the "The Catholic
Foundation." In the memo section identify the name of the account.
Securities may be directly transferred to The Catholic Foundation. Specific
instructions are necessary for each type of security transfer.
5. Complete the
Necessary Documents
The process begins with the Application Form. An account will be
initially established with the acceptance of the Application Form and the
transferred assets. Formal establishment of the Catholic Foundation account
will occur when the "Participant Agreement" documents have appropriate
signatures. Foundation officials, including the Bishop, will sign.
Participant signatures will include the Pastor or Diocesan Department
Director and a person, such as the Finance Council chair, who has a
consultative role in the financial
affairs of the participating entity. (This latter signature is necessary to
document that appropriate consultation has occurred.) One original set of
executed documents
will be placed in the Foundation files, the second original set will be returned to the
participant for their files and a copy of the documents will be placed in
the Diocesan Archives.
Application for Endowment Account |
