Frequently Asked Questions
1. What is an endowment?
Webster defines an endowment as a permanent source of income--the transfer of money or property to a qualified charitable organization such as academic, cultural, health or religious institutions, etc. Like the parable of the Mustard Seed, with each gift added to other gifts, an endowment can grow over time providing substantial financial benefits for our church. As a result, the MOTTO for our PEP is: “A Legacy of Supporting Aldersgate and Its Mission FOREVER.”
2. What is the purpose of the Permanent Endowment Program (PEP)?
The PEP was established for the purpose of providing members and friends an opportunity to make charitable gifts to our church that will have a lasting impact on the church’s future and serve as a living memorial. The most appealing part of the PEP is that the principal amount donated lasts forever and only the interest earned will be used to provide a forever source of additional income for our church and its ministries--“the gift that keeps on giving.”
3. What are examples of ways I can give to the PEP?
There are basically two ways you can give. You donate by Direct Gifts (Examples: In Honor/In Memory of an individual) of cash, investment securities, real or tangible personal property; or more typically by Legacy Gifts (Examples: Bequest in your Will, designating the PEP as a beneficiary in a life/term insurance policy or retirement plan, or establishing a life income plan, e. g., charitable gift annuity or charitable remainder trust), which are typically is based on accumulated assets or individual estate rather than pledges to stewardship or capital campaigns which are based on anticipated annual income. In most cases, a Legacy Gift is a once-in-a-lifetime financial commitment to our church’s future and our children--a final tithe to the church.
4. Are there various ministries in the PEP that I can designate for my gift?
YES. There are four named funds: One is an Undesignated Fund: Permanent Endowment Fund for specific needs and ministries determined by the Church Leadership and is the centerpiece of our endowment program; and three Designated Funds: Mission Endowment Fund for missions in and beyond the local church and community; Property Endowment Fund for the maintenance and care of the church; and a Donor/Purpose Named Endowment Fund, such as Youth, Music, Food Pantry, etc. However, with a Donor/Purpose Named Fund, a minimum donation of $25,000 or more is required to establish this fund, then no minimum donation required thereafter. There is no minimum donation required for the other listed funds.
5. What are some examples of how the money from this PEP might be used?
There are many unfunded programs in each year’s church budget that could benefit from the PEP. Examples might include: Providing funds for any shortfall in a capital campaign; assisting with emergency money to pay for repairs to our church facilities; providing upfront money to pay for new unfunded program initiatives; assisting with the cost of Youth Trips during each summer; and providing an additional source of funds to cushion any financial challenges that our Annual Stewardship Campaign may face in the future.
6. Why should I support PEP since I already donate to Annual Stewardship Campaign and how does it differ?
These two funding programs are separate and distinct, although both serve vital needs of the church. First and foremost, the Annual Stewardship Campaign supports the needs of the church during a specific church year--and requires an annual commitment by church members. You can consider these needs as the NOW requirements of the church such as salaries for our clergy and staff personnel, the music program, outreach ministries, youth programs, basic building requirements (electricity, water, and the heating and cooling system), etc. However, gifts to the PEP, which basically is a one-time gift, will provide an additional source of income that will provide funds over and above our normal church year requirements and provide a stable and secure source of guaranteed income to support ministries of the church that will last FOREVER.
7. Who has the responsibility for managing the PEP?
The Permanent Endowment Fund (PEF) Committee has the overall responsibility for the PEP and for educating church members on the PEP, managing the investment strategy and disbursement of interest earned, assisting church members during the endowment process, and recognizing those who have donated to the PEP.
8. Who manages the investments of funds donated to the PEP?
Our investment partner is the Alabama-West Florida United Methodist Foundation located in Dothan, Alabama. It manages over 60 million dollars of assets and its investments conform to the Social Principles of the United Methodist Church.
9. If I designate Aldersgate United Methodist Church as a beneficiary in my Will, Life Insurance policy or other Estate Plans, will this money to the Permanent Endowment program?
“NO”. You must designate PEP with your gift by donating to the Permanent Endowment fund or one of our other designated endowment funds (Missions, Property, or Donor/Named).
10. Is there a process for giving to the PEP and do you have a step-by-step instruction sheet to assist me?
Yes. The PEF Committee has developed a simple and straightforward Four Step Process to assist you depending on the whether you making a direct donation (cash, real estate, or investment securities) or a Legacy Gift such as a bequest in a Will, a beneficiary designation in an insurance policy or annuity, etc.
11. Are there members on the PEF Committee who can answer questions and assist me with the PEP process?
Yes. The PEF Committee has an Assistance Team that can assist you with the PEP process and provide answers to questions you may have concerning the endowment program or related legal issues--all you have to do is ask. The PEF Committee has a very informative Brochure on the program and the various ministries that are available for donations.
YES. Prior to the execution of a Will or life/term insurance policy, you can modify or cancel your gift. However, once executed, the gift is irrevocable.
13. How much will it cost to complete the PEP process?
Outright gifts should be free, unless it requires extensive legal or financial assistance, such as the sale of real property. If not redoing an entire Will, a codicil to a Will should be reasonable. Changing the beneficiary designations on life/term insurance policies, IRAs, or annuities should be free.
14. Can I contribute to more than just one of the PEP Funds?
Yes. You can contribute one or more of the Funds. However, for each contribution, you must specify the amount to be contributed to each Fund. For example, $$$$ or XX% to the Permanent Endowment Fund and $$$$ or XX% to the Mission Endowment Fund or its successor, to benefit Aldersgate United Methodist church, Montgomery, Alabama.