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Account Opening; Deposits; Withdrawals; Distributions

On-site Consultations

When your church or agency is considering a long-term investment of endowment funds, scholarship funds, or cemetery funds, we recommend an on-site consultation with a member of the Foundation staff. Such a consultation is provided without any cost or obligation to your church or agency. We have over 40 years of experience working directly with United Methodist churches and agencies, and can provide valuable suggestions regarding policies, traps to avoid, and best practices for encouraging additional gifts.
Request for Services

Account Opening

If you desire to open an account with the Foundation, please download and complete the Account Opening Information Sheet. To help with filling out the Account Opening Information Sheet, Instructions are also provided. Please fill out the Account Opening Information Sheet and Save it. This Sheet, your Memorandum of Agreement, and an initial deposit will establish your account. If you have any questions about this process, please contact us.

Memorandum of Agreement

Whenever funds are placed with the Foundation, a document known as a “Memorandum of Agreement” is established. In this agreement, the church identifies the following:

  • What body in the church has authority over the investment (charge conference, church council, finance committee, permanent endowment committee, or trustees)
  • What the purpose of the investment is (unusual capital needs, specific ministries, scholarships, camperships, music, etc.)
  • Whether the principal of the fund can be distributed or not and, if so, under what circumstances and by whose authority
  • Where the funds would go if the church ceases to exist or merges
  • How often the income of the fund is to be distributed and for what purpose
  • What changes can be made to the agreement and by whose authority

Though the Foundation will guide your church in answering these concerns, the ultimate responsibility for establishing them will rest with your church. However, once the Memorandum of Agreement is completed, the Foundation will require your church to follow the established guidelines.

Deposits and Withdrawals

Deposits will be accepted subject to the following:

  • Only cash and marketable income-producing securities will normally be received into accounts. Subject to the approval of the Board, other assets may be received by the Foundation and held outside the account until liquidated for investment into the account(s).
  • Assets received will buy units at the next valuation date on the basis of net cash received or realized upon conversion of other assets received.
  • Deposits will be assigned units in the respective account at the unit value of the next valuation date. However, units will not be considered to be purchased until the day following valuation.
  • Units will be assigned to a deposit by dividing the fair market value of the deposit by the unit value.
  • Deposits will not earn short-term interest or any other return from the date of receipt until units are purchased at the next valuation date.

Withdrawals will be permitted subject to the following:

  • At the option of the Foundation, a minimum of 30 days’ notice will be required for all withdrawals of principal.
  • Withdrawal requests received prior to the fifteenth of the month will be processed at the end of that month. Withdrawal requests received on or after the fifteenth of the month will be processed at the end of the following month.
  • Units assigned to withdrawals will be determined by dividing the amount of withdrawal by the unit value on the valuation date of the withdrawal.

Remember — a request for a withdrawal must follow the guidelines established in your account’s memorandum of understanding.

Income distributions

The Core Balanced Account will utilize a “total return” approach, as contemplated by Pennsylvania Act 141, to determine the amount of its income distributions. This methodology bases income distributions upon the combination of interest, dividends, other earnings, and capital appreciation/depreciation.

Distributions of the Core Balanced Account may be reinvested if the unit holder so desires. Any distribution so reinvested will buy units on the day following the valuation at the unit value on the valuation date. Reinvested income is principal.

The Aggressive Account will not make regular distributions. Account holders may choose to set up regular withdrawals at their discretion and as determined by their own internal formula. This amount shall be set on an annual basis and communicated to the Foundation office before the end of the preceding calendar year.

The Income and Growth Account will not make regular distributions. Account holders may choose to set up regular withdrawals at their discretion and as determined by their own internal formula. This amount shall be set on an annual basis and communicated to the Foundation office before the end of the preceding calendar year.

Reinvestment options

When an income-distribution frequency other than quarterly is chosen for the Core Balanced Account, the income that has accrued to the account in the intervening quarters is automatically reinvested in the account.

It is also possible to have the income of an account reinvested for a period of years or until the value of the account reaches a pre-determined dollar value.

If there are any other questions or comments about account openings, deposits, withdrawals, or distributions that you would like to discuss, please send us an email.

 
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