Fund and Endowment Definitions
The St. Sebastian Parish Foundation has both Funds and Endowments. Both are invested in the same manner, but how they operate is different.
When a “fund” is established within the St. Sebastian Parish Foundation, the money in that “account” can be spent down to zero and only used for the specific purpose that fund was started for. For example, there is an Art Fund that was started in 2004 with a gift from Mr. and Mrs. Patrick O’Neill for the purpose of providing an art room and purchasing art class supplies. The O’Neill family wanted to ensure students always had full creative opportunities and no child’s creativity was ever stifled due to a lack of funding.
In another example, the trustees of the Dayspring Foundation started a fund with the St. Sebastian Parish Foundation: the Dayspring Opportunity Scholarship Fund. This fund was established to provide St. Sebastian School tuition money to minority students. They defined their charitable priority for their fund to support an annual scholarship award to assist minority students to attend St. Sebastian Parish School.
When an “endowment” is established with the St. Sebastian Parish Foundation, the person or family decided their priorities required a more permanent future safety net for a particular cause, project or scholarship. They want their gifts to grow by allowing only 4% of the endowments balance to be distributed yearly; versus being able to be spent down to zero like a fund. An endowment better helps guarantee the longevity of the established priority. Again, the distribution from an endowment can only be applied to the charitable priority that was established.
For example, the Louis H. Amer Education Endowment was designated specifically for the purpose of supporting teacher salaries, benefits and continuing education costs. In 1997, the initial gift was made and every year since, 4% of that year’s balance has been paid to support St. Sebastian Parish School salaries, benefits and continuing education costs. Additional gifts from donors and market appreciation continue to help grow the principle.
Endowment “accounts” must reach their minimum principle balance as determined when the Endowment was created before the payouts begin. As of 2010, all newly established endowments must reach $7,500 (which can be done over several years) before the 4% will be withdrawn.