St. Timothy Episcopal Church

Endowment Fund Policy

1.       The Vestry of St. Timothy Episcopal Church deems it desirable and in the best interest of the church to establish a permanent endowment fund for St. Timothy Episcopal Church (the “Endowment Fund”).

2.       The Endowment Fund is to be designated as the "Endowment Fund of St. Timothy Episcopal Church."

3.       The Endowment Fund shall be managed by the Finance Committee of the Vestry of St. Timothy Episcopal Church.  With respect to the Endowment Fund, the Finance Committee shall have the following duties:

a.       The Finance Committee is responsible for developing an investment policy for the Endowment Fund and shall annually present the investment policy to the Vestry of St. Timothy Episcopal Church for approval.

b.       The Finance Committee will invest all bequests, gifts, and other assets directed to the Endowment Fund as additions to the Endowment Fund.

c.       The Finance Committee is responsible for publicizing and administering the Endowment Fund which may include gift planning within St. Timothy Episcopal Church.

d.       The Finance Committee will report to the Vestry quarterly on the status of the Endowment Fund including any new assets received and the intended use of the Permitted Fund Distributions (as defined below) in the current calendar year.

4.       The Endowment Fund shall be made up of such bequests and other gifts as may be made thereto and of such other funds and securities as may be directed to the Endowment Fund by the Vestry.  Once transferred to the Endowment Fund, the assets transferred shall not be refunded or otherwise returned to the transferee.

5.       The Endowment Fund assets shall be kept as a separate account in the church's accounting system.  The investment of such funds shall be in accordance with the investment policy approved by the Finance Committee.  The Finance Committee will not knowingly invest the Endowment Fund in any entity that derives a preponderance of its revenues from business operations that contradict basic Christian values.

6.       Withdrawals from the Endowment Fund shall only be made for the purposes set forth in this Policy and shall be limited to a calendar year total not in excess of four percent (4%) of the balance of the Endowment Fund as of January 1 of such calendar year (the “Permitted Fund Distributions”).  As used herein, the “balance of the Endowment Fund” shall mean the fair market value of the assets held by the Endowment Fund as of such date with any assets not having ready market values being valued by the Finance Committee in such manner as the Finance Committee shall deem reasonable in its discretion.  The principal and income of the Endowment Fund, except as otherwise provided herein, shall be held in perpetuity for St. Timothy Episcopal Church, and any successor or successors in interest, and shall be invested and reinvested in such lawful investments that are in accordance with the investment policy approved by the Finance Committee.

7.       St. Timothy Episcopal Church hereby covenants with every person or entity that shall make, or promise to make, a bequest or other gift to the Endowment Fund, that the principal and income thereof will be held in perpetuity as provided in this Policy and will not be invaded, except as otherwise provided herein.

8.       The Permitted Fund Distributions shall be used for the religious, charitable, and educational purposes of St. Timothy Episcopal Church.  These purposes shall be limited to: (1) maintenance and upkeep of its physical properties; (2) support of its Christian formation and education programs; and (3) support of its music programs.  In addition, upon the recommendation of the Finance Committee and with the prior approval of the Vestry of St. Timothy Episcopal Church, the Permitted Fund Distributions may be used to provide seed money for new programs of St. Timothy Episcopal Church for no longer than three years per program.  Except for funds approved for such new programs and unless the Finance Committee shall modify the allocation for a particular calendar year, the Permitted Fund Distributions for each calendar year shall be allocated according to the following percentages:

            (1) maintenance and upkeep of physical properties (40%);

            (2) support of Christian formation and education programs (40%); and

            (3) support of music programs (20%).

The Permitted Fund Distributions and the Endowment Fund are not to be used for the ordinary operating expenses of St. Timothy Episcopal Church.

9.       The Permitted Fund Distributions will be distributed as directed by the Finance Committee.  The Finance Committee may direct that all or part of such Permitted Fund Distributions not be distributed from the Endowment Fund in a particular calendar year.  Any such funds not distributed shall remain distributable in future years and such funds shall not become part of the principal of such fund.

10.   Notwithstanding anything to the contrary contained in this document, all or any part of the principal and income of the Endowment Fund may be expended for any church purpose in the nature of an emergency, provided that such emergency use shall first be recommended by the Vestry of St. Timothy Episcopal Church and then be approved by the affirmative vote of not less than three-fourths of the eligible voting members (as defined in the then-current Bylaws of St. Timothy Episcopal Church).

11.   Any amendment of this Policy may only be made after a recommendation to do so by the Vestry of St. Timothy Episcopal Church and subsequent approval by the affirmative vote of not less than three-fourths of the eligible voting members (as defined in the then-current Bylaws of St. Timothy Episcopal Church).

12.   This policy and any amendments thereto shall be initially published in the monthly church newsletter and thereafter shall be available to members of St. Timothy Episcopal Church upon request.

Approved by the Vestry of St. Timothy Episcopal Church on 11/20/07