One of the services provided by the American Baptist Foundation is endowment management. This began for two reasons:

1) Donors requested in their estate plan that upon their deaths the Foundation manage their endowment funds. This would provide long-term support for a variety of American Baptist ministries from a single managed account.

2) Churches with endowment and memorial funds needed trusted, professional management for those funds and turned to the Foundation. This would replace imposing on a member of the congregation or small committee the responsibility for investing and would provide regular reports to the church.

The Foundation’s Board of Directors also allows other American Baptist organizations to invest their financial resources in the Foundation Endowment Fund. These include funds from American Baptist regions, the American Baptist Assembly, International Ministries, and others.

Since 1994, the amount of endowment funds under management has increased to more than $43 million.

The Finance Committee of the Foundation is responsible for administering the Endowment Fund. Outside managers are selected for the actual investing while the Committee monitors the progress, resulting in changes in the managers from time to time. The managers are instructed to follow the social and ethical guidelines for investing adopted by the General Board of the American Baptist Churches USA.

The investment goal of the Foundation Endowment Fund is to preserve the purchasing power of the funds through the use of stocks and bonds. Thus, the stock investing is long-term with risk similar to the risk inherent in the S&P 500, while the bonds have an average credit quality of AA or better. There is some flexibility in the asset allocation with an average of 60% in stocks and 40% in bonds. This reflects a conservative investment philosophy, which is mindful that there must be growth as well as downside protection in the portfolio.

A regular draw against the funds is assumed, generally on a quarterly basis. The draw is about 5% with the expectation that the total return will exceed this, resulting in an increasing principal that will cover inflationary growth in ministry costs. The Foundation Endowment Fund is an investment account and withdrawals and additions occur at the end of any month when shares are evaluated.

If you have a personal or congregational interest in learning more about the benefits of the Foundation Endowment Fund, please contact me ( John.Jacobs@abc-usa.org or 1-800-222-3872, ext. 2035) or your Foundation representative, Paul Weers (WeersABF@aol.com or 1-877-688-9024) at no cost or obligation.