Five Steps to Create an Endowment

June 8, 2020

What if we could master plan our churches the way commercial businesses and many nonprofit organizations do? What if we could anticipate our needs for ministry, facilities and staff and set aside funds that would earn interest income to support our mission and ministry for the long-term.

The answer is, we can, and many churches do.

Church endowments provide the income to maintain church buildings, generate funds for mission work or enhance other ministries. A properly structured endowment program can help you secure the financial future of your church. Endowments have provided a major source of funding for many institutions in our society for years.

An endowment fund says that your church:

  • Believes in its future
  • Wishes to be guided in stewardship by the belief that all we have is from God
  • Wants to build a sense of permanence
  • Desires as a church family to be good stewards even as we expect each member to be a good steward
  • Wishes to go the extra mile in providing new services and programs
  • Wants to create a legacy for future generations

Below are five steps to create an endowment:

1. Identify the need for an endowment

2. Learn what an endowment is and what it can do

An endowment fund is created by the church that encourages members to give for the long-term. These gifts are often pooled invested to endow the church with the resources to grow its mission and ministry beyond our lifetimes.

3. Identify the needs and causes that will be supported by the endowments

Distributions from the endowment should be used in ways that are in line with church’s mission.

4. Establish the endowment fund

The church will need to select an endowment committee to oversee the fund and prepare an agreement, which includes steps such as approving a transfer of start-up funds to the endowment and stating the guidelines for distributions for the endowment.  

5. Create a plan to promote your endowment fund

Most likely, church members will need to learn what an endowment fund is. When you communicate with your members, always create clear and consistent messages about the needs and goals of the endowment fund.

Check out our endowment web page for more resources. The Foundation can also help with setting up or rejuvenating an endowment so feel free to contact us at info@iumf.org or 515-974-8927.