First Lutheran Church of Venice
First Lutheran Church Endowment Fund
Endowment fund formally established on July 14, 2002
On July 14, 2002, the Voters' Assembly established the First Lutheran Church Endowment Fund
as drafted by the Interim Endowment Committee and recommended by the Church Council,
with these two amendments:
The Voters' Assembly also authorized the Church Council to decide, on a case by case basis,
how much of future estate planning gifts given to First Lutheran Church will be placed in
the endowment fund.
- The Voters' Assembly
(a) authorizes the Board of Christian Growth and Education to determine how this
year's endowment distribution for Tuition Aid for Students at our School shall be used
(b) allocates this year's endowment distribution for Help for People in Need
to the Elders' Fund (a fund, administered by the Board of Elders, to assist people
in our church and our community who have unmet physical, emotional or spiritual
need, such as food, temporary housing, or counseling).
- The Voters' Assembly reserves the right to make amendments to the by-laws
of the First Lutheran Church Endowment Fund at its next regular meeting in October 2002,
and only then, with a simple majority (as opposed to a two-third majority).
[Note: There was some inconclusive discussion on which church body shall
make the final decision on how endowment distributions will be used,
in particular for restricted funds.]
Endowment fund overview
In December 2001, our church received a significant donation from two of our
church members who decided to share the fruits of their stake in a successful
Our church is truly blessed and we are very joyful to have this wonderful
opportunity to start an endowment fund, something we have long been looking
In January 2002, the Church Council appointed an Interim Endowment Committee to
work out a proposal for the establishment of an Endowment Fund, including
a vision, investment policy, and by-laws governing the fund.
The committee adapted and augmented sample endowment fund by-laws that the
LCMS Foundation kindly provided to us. In July 2002, the Voters' Assembly
approved the proposed establishment of the new endowment fund.
Here are some endowment fund highlights:
The proposal consists of
(1) the main section of the Endowment Fund By-Laws,
(2) an appendix with Endowment Fund Categories,
(3) an appendix with the Endowment Distribution Policy, as well as
(4) an Investment Policy as it pertains to the Endowment Fund.
- The purpose of the endowment fund is to further the growth and
mission of our church by providing long-term funding of important
ministries. Every year, about 4.5% of the endowment fund will be
spent on selected ministries. We expect that this percentage will
preserve the principal of the endowment in inflation-adjusted dollars
over time so that the Endowment Fund can continue to bear fruit for
many many years to come.
- The Endowment Fund shall have two types of funds: restricted
and unrestricted. For the distribution from unrestricted funds,
an Endowment Committee will make recommendations to the Voters' Assembly
every year as to where it believes proceeds are most needed.
See also the separate handout for categories of restricted
funds that donors can choose to give to.
- The new Endowment Committee shall have as its ex-officio members
the pastor, president, treasurer and principal plus five elected members.
Besides making proposals on which programs to support, the committee
shall also promote and administer the fund.
- Based on investment policies for endowments of other churches and
universities, the committee drafted an investment policy to provide
prudent stewardship over the funds of the endowment.
Endowment Fund By-Laws (main section)
Download First Lutheran Church Endowment Fund By-Laws (7 pages, without appendices) in
Appendix: Endowment Fund Categories
Download Endowment Fund Categories (1 page) in
Appendix: Endowment Distribution Policy
The Endowment Distribution Policy determines how much of the endowment
fund is distributed to designated endowment projects every year.
This policy is part of the First Lutheran Church Endowment Fund By-Laws.
Download full Endowment Distribution Policy (10 pages including appendices) in
postscript format. Download endowment distribution program as listed in Appendix C of the policy.
The endowment committee is aware that some donors might want to make
contributions to be exhaustively spent in a period of several years,
with a significantly higher rate of spending than the endowment fund.
The endowment committee notes that those donations might either be
held in a restricted fund within our general (non-endowment) funds
or that we might start a new multi-year project fund for projects
with such time frame.
We won't beat the market.
Investment manager(s) might not feel very empowered,
because execution of investment policy is almost mechanic.
Related document: Investment Policy
The Investment Policy was written to be applicable to both
the Endowment Fund as well the Church's general funds.
It was approved by the Voters' Assembly on July 14, 2002 in
so far as it applies to the endowment fund and by the Church Council on
September 3, 2002 for the general funds (i.e. the non-endowment funds).
Download full Investment Policy (2 pages) in
For the investment policy there are a number of choices to be made.
Should there be separate investment policies, one for the endowment
fund and one for the general funds, or should there be a single
investment policy (as reflected in the current proposal)?
Shall we try to beat the market? Shall we give wide latitude to our
investment manager(s)? Shall we have a very sophisticated investment
policy? (Current proposal answers all questions with `no'.)
Disadvantages of a simple approach:
Advantages of a simple approach:
We can expect average market return.
No blame game if investment strategies don't work out.
Less time consuming.
We don't need highly skilled investment manager(s).
We don't have to pay a highly skilled investment manager
and can generally keep overhead expenses low.
Keeps policy relatively short and simple.
For the proposal of the Investment Policy we used Chris Graves' analysis of our
general funds as well as two investment policies that Reese Anderson got from other
churches (Southminster Presbyterian Church and First Presbyterian Church).
Thanks to Chris and Reese for those very valuable contributions.