Building our endowment is a top priority at Butler Community College Foundation. Endowments provide continuous support in perpetuity and help the Foundation aim higher to achieve its educational mission more effectively.
Frequently Asked Questions:
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How large is Butler’s endowment?
Our total endowment is $15 million and is made up of more than 300 funds. Most are set up as scholarship funds.
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Why are endowments important?
The amount contributed to an endowment makes up its principal and that principal exists in perpetuity. The larger the endowment, the larger the income stream from earnings. Only earnings on the principal are spent from an endowed fund.
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What are “earnings and losses”?
Interest, dividends, realized and unrealized gains, and losses are all used in calculating earnings and losses.
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How does the endowment help students?
The earnings from endowed funds are awarded to students in the form of scholarships. Many students require more financial assistance than current resources allow. Students who receive scholarships from endowed funds are provided contact information regarding the donor and are required to express their gratitude for support.
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How much does it take to establish an endowment at the Butler Foundation?
The minimum amount required to start an endowment is $10,000. This amount may be reached over a course of time with a signed agreement and pledge form or a declaration of intent for deferred gifts.
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Can I designate my endowment for a specific purpose?
Absolutely, as long as it is consistent with Foundation policy, state, and federal laws. Once a gift is accepted, the conditions of the gift are followed in perpetuity.
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How much does my endowment earn? Does the market affect an endowment account?
Endowed funds are pooled into a portfolio. Earnings from the pool are allocated pro rata among all endowment accounts each month. The amount of earnings added to the fund fluctuates with the markets. Although the portfolio is well diversified, some investments might occasionally lose value.
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How is “spendable income” calculated?
Set by the investment and spending policy for the Foundation, currently a payout of 6% is made each year even though the pooled portfolio may earn more. Excess earnings credited to the individual funds are held as “unallocated earnings.” This provides a reserve against losses in the securities market and allows the college to continue to disburse the earnings when the pooled portfolio does not meet investment goals in a particular year.
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How often are the individual endowment funds credited with earnings?
Earnings or losses are allocated to individual funds each month.
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How do I start an endowment?
It is simple; contact the Foundation and we will draft a Memorandum of Agreement (MOA) that will govern the fund according to your wishes. Once the MOA is finalized, simply sign and return it with your initial gift. The Vice President of Advancement will countersign the MOA and copy of the executed agreement will be returned for your records.
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Can I add to my endowment?
Additional gifts may be made at any time. Gifts will be used to increase the principal balance which will remain intact permanently. Increases in principal will ultimately lead to an increase in the number and/or amount of awards. The award amount and number of awards will be determined from the earnings on the principal annually and in accordance with guidelines established and in use by Butler Community College Foundation.
