Berks County Community Foundation is committed to responsible stewardship of the charitable assets entrusted to us by our donors. One of the ways we do this is through our 4.5 percent spending policy for endowed funds.
Endowed funds are a type of charitable fund that are established with a minimum donation of $50,000. The principal of the fund is invested, with a portion of the investment earnings distributed each year to support charitable causes and organizations in accordance with the fund agreement. The spending policy for an endowed fund is the percentage of the fund’s average value over a rolling three-year period that is distributed for charitable purposes each year.
We have adopted a spending policy of 4.5 percent for endowed funds. This means that, on average, 4.5 percent of the value of an endowed fund is distributed each year for charitable purposes. This spending policy is a balance between preserving the purchasing power of the fund over time and providing a steady stream of support for charitable causes and organizations.
The spending policy is reviewed regularly by our board of directors, and any adjustments to the spending policy are made with the goal of balancing the long-term preservation of the fund’s principal with the need to provide support for charitable causes and organizations.
One of the benefits of this policy is that it allows people to know that when they establish an endowed fund with us, their donations will continue to support the causes and organizations they care about for generations to come.
In addition, this policy also allows the fund to grow over time and allows more money to be distributed over time, meaning more impact can be made in the community over time.
Overall, our 4.5 percent spending policy for endowed funds is an important part of our commitment to responsible stewardship of charitable assets. It’s designed to balance the long-term preservation of the fund’s principal with the need to provide support for charitable causes and organizations, and to ensure that our donors’ gifts continue to make an impact for generations to come.