A PERMANENT ENDOWMENT FUND and COMMITTEE
EMMANUEL UNITED METHODIST CHURCH OF LAUREL, MARYLAND
This Fund shall be known as the Emmanuel United Methodist Church Permanent Endowment Fund, referred to in this document as “the Fund.”
The Fund and its administration will conform to all applicable Maryland laws and regulations, any applicable Federal laws and regulations including the provisions of the Internal Revenue Code, and The Book of Discipline of The United Methodist Church (2008), particularly pertaining to Paragraph 2533.
PURPOSE OF FUND
The Fund is established to provide members and friends the opportunity to make charitable gifts to Emmanuel United Methodist Church (referred to as “the Church”) that will become a permanent endowment for financial support and a living memorial.
The Fund is intended for Church purposes that are not funded through the annual operating budget; however, gifts which intend to supplement programs and ministries are appropriate. The primary account is the Undesignated account. Gifts may be designated to specific purposes by a donor and the Committee will determine the specific sub-account, for example: Cemetery; Flower; Missions; Education; Youth; etc.
I. CHURCH PERMANENT ENDOWMENT COMMITTEE
The Fund shall be administered by the Church Permanent Endowment Fund Committee (referred to as “the Committee”) under the authority granted to the Committee by the Charge Conference.
The Committee shall be a standing committee of the Church Council.
The Committee shall be comprised of the following members:
1. The Senior Pastor (Non-voting Member)
2. A representative of the Finance Committee named by the Finance Committee
3. A representative of the Board of Trustees named by the Board of Trustees
4. A minimum of three (3) and not more than seven (7) “At Large Members”elected by the Charge Conference.
Committee is structured with 3, 5, or 7 At Large members and two representatives chosen from their respective committees. The Trustee and Finance Committee representatives are chosen by their respective committee and may serve a term from one (1) to three (3) years as long as they are members on their respective Committee.
All At Large members of the Committee shall serve a three year term or until their successors are duly elected. Members can serve up to two consecutive terms. Following the second term a member must be off the committee for at least one year before being able to serve another term. At Large members will be elected by the Charge Conference and terms shall be staggered. Each year the Charge Conference shall elect people to fill vacancies.1
1 Classes will be established as such: Seven (7) At Large members will be appointed in 2013. Two members will serve one year (class A); and two members will serve two years (class B). Class A and B will have an opportunity to serve a full term when their initial term is completed. Class C will serve for a full three year term.
There shall be a minimum of two (2) meetings a year. Special meetings may be called by the Chair.
A Chair shall be elected by a majority of the members at the first meeting of the calendar year and serve for a term of one (1) year. The Chair shall be the primary liaison to the primary custodian. The Chair shall attend Council meetings.
Any interim vacancies may be filled by action of the Church Council.
The Committee shall have the powers and duties authorized by the current The Book Of Discipline Of The United Methodist Church (2008) Paragraph 2533 and granted by this session and future sessions of the EUMC Charge Conference.
The Committee shall:
1. Receive and administer all bequests made to the local church; to receive and administer all trusts; to invest all trust funds of the local church in conformity with laws of the country, state, or like political unit in which the church is located.
2. Emphasize the need for adults of all ages to have a will and an estate plan; and to provide information on the preparation of these to the members of the congregation.
3. Stress the opportunities for church members and constituents to make provisions for giving through United Methodist Churches, institutions, agencies, and causes by means of wills, annuities, trusts, life insurance, memorials, and various types of property.
4. Advise the Council and other committees regarding possible investments for the Endowment Fund.
5. Provide education to church members that will be helpful in their pre-retirement planning, including such considerations as establishing a living will and a living trust, and the need to designate someone to serve as a responsible advocate should independent decision making be lost.
6. Accept or reject any designated or restricted gift, bequest or device based on the compatibility with Emmanuel United Methodist Church’s stated beliefs, mission and values.
7. Update the committee rules and regulations after each General Conference as needed.
8. Collect, receive, and provide receipt for the income, profits, rents, and proceeds of the Fund.
9. Sell for cash or credit, convert, redeem, exchange for other securities or other property, or otherwise dispose of any securities or other property at any time held by the Committee.
10. Manage and administer the Fund, which shall include an acknowledgement of gifts.
11. Employ suitable accountants, agents, legal counsel, and custodians, and pay their reasonable expenses and compensations. Each separate sub-account shall bear its pro rata share of such reasonable expenses.
12. Other responsibilities as determined by the Charge Conference.
Any other provisions of this agreement notwithstanding, the Committee shall not be compensated; nor engage in any act of self-dealing as defined in the Internal Revenue Code including section 501(c)(3); nor retain any excess business holdings as defined in the Internal Revenue Code; nor make any investments in such manner as to incur tax liability under the Internal Revenue Code; nor make any taxable expenditures as defined in the Internal Revenue Code or corresponding provisions of any subsequent Federal tax law.
The Committee shall determine all matters regarding management of the Fund, expenditures, and investment by a majority vote present at a duly called meeting (except amendments discussed under “Amendment of Permanent Endowment Fund Agreement”).
The Committee shall render a statement of its transactions regarding the Fund. At no time shall the amount of individual gifts nor the identity of donors to the Fund be published unless written permission to do so is obtained. The Church, or any member, or any donor to the Funds may file an objection to the accounting in writing within sixty (60) days of the date of the accounting. In the absence of such objection, the Committee shall be released, relieved, and discharged with respect to all matters and things set forth in such accounting as though such accounting had been settled by judicial decree of a court of competent jurisdiction.
D. Bonding and Liability
The Fund will provide Directors and Officers insurance for the members of the Committee either through the Church policy or as a separate policy.
No Committee member shall be required to furnish his/her own bond or surety. Accounting, receipts, deposits, and disbursements for all Permanent Endowment Funds shall be handled by the bonded designee(s) of the Church as assigned.
No Permanent Endowment Fund Committee Member shall be responsible for loss in investments made in good faith. No Member shall be liable for the acts or omissions of any other Member, or of any accountant, agent, legal counsel or custodian selected with reasonable care. Each Member shall be fully protected in acting upon any instrument, certificate, or paper believed by him to be genuine and to be signed or presented by the proper person or persons. No Member shall be under any duty to make any investigation or inquiry as to any statement obtained in such writing but may accept the same as conclusive evidence of the truth and accuracy of the statements therein contained. The Board of Trustees shall include the Committee as part of the Trustees indemnification insurance.
II. INVESTMENT OF PERMANENT ENDOWMENT FUNDS
A. The Fund’s Objectives
The Fund’s investment objectives are:
1. Conservation of principal for the effective maintenance of purchasing power.
2. Regular income at a reasonable rate.
3. Investment of assets in institutions, companies, corporations, or funds approved by the Committee and in compliance with the Social Principals of the United Methodist Church.
B. The Naming and/or Change in the Primary Custodian
Any change in investment firms requires approval of the Church Council with a recommendation from the Committee.
C. Limitations on the use of Principal
The objectives of the Fund are to conserve principal corpus and make use of only the income from the Fund unless the donor specifically designates the use of principal in the Gift Agreement. Only in extreme and overwhelming circumstances bordering on the survival of the Church itself may principal be withdrawn; and, then, only if use of the principal to be withdrawn has not been restricted by the donor(s).
Any withdrawal of principal (as long as it does not violate the donor’s intentions as described in the gift agreement) must be approved by a three-fourths (3/4) vote of the Charge Conference members present and voting at duly called meetings of both the Committee and the Charge Conference of Emmanuel United Methodist Church.
D. Distributable Income
Income is defined as dividends, interest and capital gains of the sub-accounts.
Distributable income is an amount determined each year by applying a percentage against a rolling three-year average of the fair market value of the fund as determined on the first business day of each calendar year. The percentage applied against the fair market value shall be 50 percent of the income. In years in which there is excessive growth in the fund, the Committee reserves the right to make additional distributions of income by a two-thirds (2/3) approval vote of its members.
E. Distribution of Income
The Committee shall report the amount for available distribution to the Church Council.
The Committee will recommend uses for the distribution of the Undesignated Fund.
To the greatest extent possible, the income of each of the sub-accounts shall be distributed as the donor has directed by will or other gift document provided such direction is in conformity with the purposes set forth herein.
To the greatest extent possible, the income of each designated sub-account shall only be distributed for the purpose associated with said designated sub-account.
III. GIFTS TO THE PERMANENT ENDOWMENT FUND
A. Gift Objectives
The objective of this section is to describe the type of gifts that can be accepted and the manner in which they can be accepted.
The Committee reserves the right to decline or otherwise refuse any gift offered to the Church, with or without cause. Reasons for which a gift may be declined include, but are not limited to the following:
1. The Committee will use as a baseline the mission and values statement adopted by the Church Council.
2. The Committee does not believe it is in the best interest of the Church or the Fund to abide by the restrictions placed on the gift by the donor.
3. The costs to maintain the gift or to meet the restrictions placed on the gift by the donor are considered to be excessive for the Fund.
4. The gift is considered to be inappropriate or unrelated to the tax-exempt purposes of the Church or the Fund.
5. The gift is designated to benefit or to be channeled to a specific individual.
All information concerning donors and prospective donors, including their names, names of beneficiaries, the amount and type of the gift, aspects relating to their estates, etc., shall be kept strictly confidential except when donors permit the release of such information.
B. Outright Gifts
a. Gifts in the form of cash and checks shall be accepted in any amount.
b. All checks must be payable to EUMC and in no event shall they be made payable to an employee, agent, or volunteer for credit to the Church.
2. Publicly Traded Securities
Securities that are traded on a national stock exchange or over the counter exchange shall be accepted by the Church.
3. Closely Held Securities
Non-publicly traded securities may be accepted upon approval by the Committee.
4. Real Property
a. All gifts of real property must have the approval of the Church/Charge Conference.
b. An initial assessment by the Committee shall include a report on (but not limited to) the following:
i. Current zoning
ii. Any encumbrances, including an Affidavit of Lien signed by the Donor
iii. A recommendation on marketability
c. Prior to approval, the Committee shall make a recommendation for accepting the real estate and shall include a report on (but not limited to) the following:
i. Current title and ownership
ii. Any and all restrictions
iii. An independent qualified third party appraisal
iv. A Phase I environmental audit for non-residential property, when appropriate
d. When the deed for the property is recorded, it shall include the trust clause: following the appropriate paragraphs of the current Book of Discipline of the United Methodist Church.
5. Tangible Personal Property
a. All gifts of personal property must have the approval of the Committee.
b. Prior to approval, the Committee shall make a recommendation for accepting the personal property and shall include a report on (but not limited to) the following:
i. Current title and ownership
ii. An independent qualified third party appraisal
iii. A recommendation on marketability
c. The Committee shall make the decision to keep or sell the property.
6. Other Property
The Committee shall make the decision to accept, keep, or sell any other property that it may deem to be in the interest of the Church.
C. Planned (Deferred) Gifts
a. Gifts through wills (bequests) shall be actively encouraged by the Church.
b. Upon inquiry by a prospective donor, all representations as to the future acceptability of various properties to be left to the Church in a will or other deferred gift shall be made in accordance with the terms and provisions of this document.
c. Gifts of property that are not acceptable from estates shall be rejected by the Committee and that decision shall be communicated to the legal representatives of the estate.
2. Revocable Living Trusts and Charitable Trusts
a. The fees for management of a Charitable Remainder Trust will not normally be paid by the Church; however, upon approval by a majority of the Committee, these fees may be paid by the Church. The fees for management of a Revocable Living Trust will not be paid by the Church under any circumstances.
b. Revocable Living Trusts and Charitable Remainder Trusts and all other deferred gifts shall be encouraged as a method of making gifts to the Church while retaining income which may be needed by the donor for personal purposes. Such trusts shall not be marketed as tax avoidance devices or as investment vehicles and it is understood that no activity will be conducted that will violate Federal and/or State security regulations.
c. No representations as to the manner in which trust assets will be managed or invested shall be made by any employee or other persons acting on behalf of the Church.
3. Life Estate Gifts
The Committee may accept such gifts provided that there has been a full disclosure of the possible ramifications of the transaction to the donor.
4. Life Insurance Policies
a. The Church will encourage donors to name the Church as beneficiary of life insurance policies that they have purchased.
b. The Church will not accept gifts from donors for the purpose of purchasing life insurance on the donor’s life. Exceptions to this policy may be made only when the Church has an insurable interest and is in compliance with all State and Federal statutes.
c. No insurance products will be endorsed for use in funding gifts to the Church.
d. In no event shall lists of Church donors’ names be furnished to anyone for the purpose of marketing life insurance for the benefit of donors and/or the Church.
5. Gift Annuities
The Church may accept Charitable Gift Annuities.
D. Payment of Fees Related to Gifts to the Church
1. Finder’s Fees or Commissions
No fees shall be paid to anyone as consideration for directing a gift to the Church.
2. Professional Fees
a. In general, the donor and/or gift’s income shall pay any fees associated with the gift.
b. In the event that there are fees incurred to determine the acceptance or rejection of a gift (ie., fees related to appraisal, Phase I environmental audit, title search), and those fees are not paid by the donor or proceeds from the sale of the gift, those fees shall be paid by the current year’s income from the Fund. If the gift is designated to a specific sub-account, that sub-account shall pay all associated fees.
c. The Directors and Officers insurance premium shall be paid from the Undesignated account.
d. No fees shall be paid to anyone as compensation for any sale of any products to the donor.
Any restriction on the use of any gift must be approved by the Committee prior to acceptance of the gift.
F. Gift Use
The Church should maintain a “wish” list of projects and items that can be supported or purchased with undesignated gifts.
A. Merger, Consolidation, or Dissolution of Emmanuel United Methodist Church
If at any time Emmanuel United Methodist Church is merged or consolidated following the appropriate paragraphs of the current Book Of Discipline of the United Methodist Church with any other United Methodist church, all the provisions hereof in respect to the Fund shall be deemed to have been made on behalf of the merged or consolidated Church which shall be obligated to administer the same in all respects and in accordance with the terms thereto.
If at any time Emmanuel United Methodist Church is dissolved, all assets of the Fund shall be assigned to the conference following the appropriate paragraphs of the current Book of Discipline of the United Methodist Church.
B. Amendment of Permanent Endowment Fund Agreement
This agreement may be amended or modified from time to time only after recommendation by a two-thirds (2/3) vote of the Committee members present at a duly called meeting and voting and by a two-thirds (2/3) vote of a duly announced Charge Conference of Emmanuel United Methodist Church. No amendment or modification shall (1) alter the intention that the Fund be operated exclusively for religious purposes; (2) alter or eliminate the stated Fund purposes found under purpose of the Fund herein, or (3) alter the intent of any donor to the Fund. Every amendment or modification of this agreement shall be in writing and signed by the Committee who voted to approve same and by the Recording Secretary of the Charge Conference, the District Superintendent, and the Senior Pastor.
If any provisions or application of any provisions of this Fund shall be held or deemed to be illegal, inoperative, or unenforceable, the same shall not affect any other provisions or any applications of any provisions herein contained or render the same invalid, inoperative, or unenforceable.