What is an Endowment?

"Endowment" is not a term many of us use very often, so it can be difficult to understand and, therefore, to explain. Today's post from Elaine Bedel, Women's Fund Advisory Board member and Certified Financial Planner, provides an overview of what an endowment is. We thank Elaine for sharing her expertise with our readers.

By Elaine E. Bedel, CFP®
President
Bedel Financial Consulting, Inc.

Have you ever been asked to make a charitable contribution to the endowment of Women’s Fund of Central Indiana? There is often confusion with respect to giving to an endowment versus giving directly to a charitable organization. The one major difference is that when you make a gift to an endowment, you really are making "a gift that keeps on giving".

Anytime you make the decision to share your hard-earned money with a charity, you want to make sure your personal intent is being maximized. If your goal is to have 100% of your money used immediately to meet the goals of the charitable organization, then giving to the "annual fund" or the "operating fund" of the charity is very appropriate. In most cases, your contribution will be used as needed or as you have specifically directed to carry out the mission of the organization. The annual fund of Women’s Fund is used to provide donor programming throughout the year and to ensure that the organization’s operational needs are met.

If, on the other hand, you would like your money to make a long-term impact, you may want to consider a gift to the endowment fund. Many organizations, including academic, cultural, and religious institutions as well as significant community funding organizations, like Women’s Fund, all tend to have endowments. The largest endowment in the United States belongs to Harvard University. As of June 30, 2009, its value was $26 billion.

How Does an Endowment Work?

When you make a contribution to the Women’s Fund endowment, your money is not spent. Rather, it is invested. Each year thereafter, a specific percentage of the endowment fund is withdrawn and used to meet our mission.

The intent of an endowment is to have the fund grow over time through appreciation and earnings of the investment portfolio. The annual distribution percentage is limited to an amount that is less than the anticipated total investment return of the portfolio in order to allow the endowment fund to increase in value. Generally, a five percent distribution is considered prudent.

As an example, if the investment portfolio of the endowment fund earns a return of 9% and the charity takes a 5% withdrawal, the endowment fund will still increase in value by 4%. Each year, as the endowment continues to grow, the 5% distribution amount will also increase.

Women’s Fund uses five percent of its endowment each year to fund grant requests from various women and girl serving agencies in central Indiana. Our endowment is currently valued at approximately $12 million. The 5% distribution allows us to fund $600,000 in grants. Our goal is to grow the endowment to $20 million in the next five years. This will allow us to fund $1,000,000 of grants every year to improve the lives of families in our community.

The Gift that Keeps on Giving

Making a charitable gift to the endowment of Women’s Fund allows your money to continue to "make a difference" year after year. Since only a portion of the investment earnings and appreciation is spent each year, your gift remains intact into perpetuity.

When considering your gift, you cannot make a wrong choice. Both the annual fund and the endowment are important for the long-term sustainability of the Women’s Fund or any charitable organization.

Elaine E. Bedel, CFP®, is president of Bedel Financial Consulting, Inc., a wealth management firm providing fee-only financial planning and investment management services for individuals, consulting services for corporate retirement plans, and investment advisory for institutions and endowments. She is the author of "Advice You Never Asked For…But wished you had!" available on Amazon.com. For more information, visit their website at http://www.bedelfinancial.com/ or email to ebedel@bedelfinancial.com.

© 2010 Bedel Financial Consulting, Inc. All rights reserved.

Celebrating Volunteers

Women's Fund. You know we are the expert resource for issues impacting women and girls in central Indiana. You know we are dedicated increasing options and opportunities for women and girls in our community. You know we have an $11 million endowment and make well-reasoned, researched grants to organizations who are functioning at a high level.

But, do you know who is doing all of this work? Certainly our full-time staff of three and four consultants are not doing all the heavy-lifting. Rather, it is an incredible group of volunteers who make it possible. We have an Advisory Board of 27 women and men who fit Women's Fund in as an important part of their civic priorities, we have 210 women who have participated/are participating in our OPTIONS/Alumnae program. And, many community volunteers who participate on our Finance, Grants, and Resource Development Committees.

This morning was an amazing example of the commitment of volunteers to action. We have just finished a six-year endowment campaign; typical organizations find burned-out volunteers and donors at the end of such a difficult task. Women's Fund had seventeen volunteers who gathered to talk about the next phase of fund raising and helping grow our endowment to $20 million. Seventeen women who have made a commitment to help us make new friends, ask for contributions, and help thank our generous donors.

We had eleven different volunteers who went on a site visit during lunch to learn more about one of our grantee organizations. Eleven women who gave up their lunch hour to see first-hand the difference Women's Fund is making for women trying to learn new job skills and find a well-paying job. Eleven women dedicated to telling the story of Women's Fund to our friends, prospects, and donors.

We are truly grateful for the many volunteers who stand with us every day to help improve conditions for women and girls in central Indiana. The impact of their commited support is significant and will help leave a lasting legacy for central Indiana women and girls.

National Crime Victims' Rights Week

April 18-24 is National Crime Victims' Rights Week, a time focused on recognizing the rights of crime victims and raising awareness on ways to help victims.

Turning Point Domestic Violence Services in Columbus, Prevail Inc. in Hamilton County, and The Julian Center in Marion County are a few examples of central Indiana organizations helping victims of domestic violence. These organizations provide services ranging from shelter to counseling to legal services. One vital program Women's Fund has funded is the Grants to Encourage Arrests program, a partnership between Marion County law enforcement and The Julian Center. This program pairs an Outreach Advocate with a victim of domestic violence and is important to ensuring victims know their legal rights and can access services through comprehensive on-scene support provided by the advocate (see our blog post on this topic).

One story recently receiving national attention is that of Michelle Corrao, Director of Community Relations at Prevail. Corrao was awarded the Special Courage Award by US Attorney General Eric Holder and is the first Indiana resident to receive the award. A victim of a a violent crime, she has turned her tragic circumstances into a personal mission to help other victims and raise awareness. Through her work with Prevail the past seven years, she has been instrumental in working with the Prosecutor’s office to set up a Sexual Assault Response Team (SANE) in Hamilton County, among many other accomplishments.

Thanks to courageous women such as Corrao and important programs like Grants to Encourage Arrests, domestic violence victims can access help with professionals who are attuned to their needs and challenges. It is important not only to provide these services to victims but to stop violence before it starts. With preventative measures such as Heather's Law recently signed in Indiana, we are making positive strides. However, there is much more to be done, which is why Women's Fund is currently focused on domestic violence through our grantmaking. And, we hope others will join us in this effort.

Financial Literacy Month

April is Financial Literacy Month. Experts report that Americans carry more than $2 trillion in consumer debt, which is more than the gross domestic product (GDP) of some countries. While those numbers are outrageous, they are also completely understandable. In this economy, we are living paycheck to paycheck, and using credit cards to bridge the gaps.

This problem cuts across all socio-economic, class and gender lines. I have personal experience with substantial credit card debt. In the last five years, my husband and I opened our own business, had twin sons, and bought a new house before selling an old one. Before we knew it, we were in trouble. And bear in mind that my husband and I have three advanced degrees between us, were raised by upper middle class parents, and have no excuse for getting up to our armpits in debt. But if it can happen to us, it can happen to anyone.

What is so striking about the problem of financial literacy is the shame involved. People simply are too embarrassed to get the help, guidance, or education that can go such a long way in digging themselves out of the hole. And there is so much help available. Simply calling your credit card companies can make a huge difference in reducing interest rates.

This month, everyone has something to learn about becoming more financially savvy. The days of our husbands handling all the money in our families is over. Women should be empowered to know about their financial situations, to engage in the decision making process, and to make use of the resources available to understand their financial situations. Women’s Fund has been committed to this endeavor for a long time, both by funding non-profits that educate women about financial issues, and by recognizing the importance of the issue as a whole, for its recipients, donors, and supporters. I am a great example that anyone can fall into a financial trap. The lesson I learned is that when it comes to financial awareness, ignorance is most certainly not bliss.

Celebrating the Health of African American Women

April is National Minority Health Month – an opportunity for us to raise awareness about the wide range of health disparities among African Americans. As chairperson for this weekend’s Race for the Cure, I’m very aware of the stark statistics that women face:

• Breast cancer is the most common cancer among African American women.
• An estimated 19,540 new cases of breast cancer are expected to occur among African American women in 2009.
• Breast cancer death rates among African American women increased 1.5 percent annually from 1975 to 1992.
• The higher mortality rate in African American women may be related to differences in access to and utilization of early detection and treatment and differences in tumor characteristics.

I’m pleased to know that through grants issued by Women’s Fund, organizations throughout Central Indiana, over the years, have been afforded the opportunity to help women and girls live a healthier life. Below are just a few:

• Little Red Door: provided qualifying women with prostheses, prosthetic bras, wigs, turbans and hats at no charge.
• Planned Parenthood of Central Indiana: hosted peer education programs regarding adolescent sexual health.
• Shalom Health Care Center: provided no cost pap smears and STD screenings for women who were underinsured or uninsured.
• National Center of Excellence in Women: created interactive educational interventions for African-American and Hispanic women concerning HIV/AIDS.

Click here for a full list of organizations granted by Women’s Fund.

• While Women’s Fund currently focuses its funding on organizations addressing domestic violence, insufficient income and caregiving; they truly demonstrate an overarching concern for women and girls through their long-term commitment to organizations addressing health.

New Law Designed to Prevent Teen Violence

Over the years, Central Indiana has experienced an increase in teen girls who are in more violent relationships. In 2005, 13.5% of Indiana high school girls reported they had experienced dating violence (had been hit, slapped or physically hurt on purpose by a boyfriend or girlfriend) in the last 12 months. This translates to approximately 5,000 Indianapolis area girls, ages 15-18, who experienced dating violence in one year alone.

As advocates for the prevention of teen violence and keeping our community's children safe, Women’s Fund was pleased to learn that on Monday, Governor Mitch Daniels signed “Heather’s Law” – a bill enabling schools to address dating violence through education programs and policies for girls and boys in grades 6 through 12. This was a great collaboration between many partners who developed Heather’s Law, demonstrating the importance of addressing this issue and reinforcing the importance of partnering to create change.

Violence among dating teenagers permeates many high schools and homes and cuts across every socioeconomic group. Teen violence is not new; however, it is a silent matter most adults do not recognize or accept easily, and therefore is not easily discussed and addressed. Teen violence proliferates from adult violence, often causing young children to repeat actions – or become victims of abuse. In fact, children witness 75% of all domestic violence incidents, and are, in turn, 1,500% more likely to become victims themselves.

Education is key. Heather’s Law has reinforced the importance of education and helping children – many of whom are in relationships for the first time and therefore don’t know and understand what constitutes healthy relationships. Women’s Fund has long supported community efforts that prevent violence, including funding a program through Ruth Lilly Heath Education Center designed to teach every IPS 5th and 7th grade student about healthy relationships annually for three years. In its final year, this program has become a national model and students have demonstrated increased knowledge of healthy relationships. This program, along with Heather's Law, are critical steps to reducing and ending violence among teens, and ultimately stopping its demonstrative cycle.

As a community, we must find a way to protect more young people from violence. While Heather’s Law requires the schools to take action, I believe it is the responsibility of everyone to take an active role in educating and supporting young children. It should be our role as adults to serve as mentors and positive role models so our children recognize abusive behavior and feel empowered to get help. What will you do to make a difference?

Remembering Ryan White

Twenty years ago today Ryan White – the 13-year-old boy from Indiana who put a face to HIV/AIDS, lost his battle to the disease at Riley Hospital for Children. At the time, there was little or no understanding about HIV or AIDS, how it was transferred, who was at risk and how you could protect yourself. Ryan became an advocate, an educator and an inspiration to so many.

Today, organizations such as Women in Motion exist to help women and girls talk about HIV/AIDS. It was once a topic never discussed – a disease that barred Ryan from his school. However, Ryan's amazing story encouraged greater acceptance of students with HIV/AIDS and has educated the public about the disease.

Women in Motion, Inc. (WIM) is a non- for-profit, Indiana-based organization that provides education on the prevention of HIV/AIDS. WIM’s mission statement is "Education is Prevention". WIM’s goal is to educate as many individuals as possible about HIV/AIDS and its co-factors.

“One thing I’ve learned over the years is that the future belongs to those who prepare for it,” said Pamela Goodwin, executive director. “Without education, it’s hard to prepare.”

To date, Women’s Fund has granted $15,000 to Women in Motion for its education and outreach initiatives. Women’s Fund dollars have helped WIM conduct street-level outreach and HIV prevention to high-risk African American females. Women in Motion recently created a Teen Talk program, targeted to teens 13-19 across the city. Jennifer Keller, program coordinator, has seen an increase in STDs in teens. Her hope is Teen Talk can be that safe place for teens to talk, to learn and to feel supported.

Today, as we think back to the struggles Ryan White and his family faced, we are also reminded that the need for education, acceptance and kindness continues. We also should take a minute to celebrate and remember his amazing mother, Jeanne White Ginder, who did everything a mother could possibly do to care for and protect her son while helping him try to have a normal life.

Click here to read a tribute to Ryan, written by the Indianapolis Star.

Inspired by a Victim of Child Abuse

Last week I attended a kick-off event for Child Abuse Prevention Month, hosted in partnership by Prevent Child Abuse America, Prevent Child Abuse Indiana and The Villages. Throughout the event, child advocates spoke about the importance of child abuse prevention and the devastating cycle of domestic violence. Statistics shared were stark. Each year, more than 20,000 Hoosier children are abused and neglected – that equates to 56 children being harmed every day and one child each week losing his or her young life to child abuse.

After hearing from Ebony, a young victim of child abuse and neglect, I realized we are all responsible for keeping Indiana’s children safe and secure. We are all responsible for treasuring, protecting, nurturing and teaching our children.

Walking away from the event I felt empowered to do something – to do something that could positively impact the life of a child. As I drove back to the office I thought about some of the programs Women’s Fund recently shared in a meeting with the Indianapolis Star – programs they fund that significantly impact the success of our city’s children. Programs such as Project Home Indy, which provides shelter for homeless pregnant teens; Juvenile Justice Program through Peace Learning Center, which teaches girls at Indianapolis Juvenile Correctional Facility conflict resolution skills; and a program through Ruth Lilly Health Education Center that teaches all IPS 5th and 7th graders healthy relationships.

Indirectly, as an OPTIONS alumnae and donor to Women’s Fund, I am doing something to make a difference. My contribution is impacting programs that Women’s Fund supports. Their grants focused on insufficient income, inadequate caregiving choices and domestic abuse in the home are truly helping create a better life for women and children in our community. As I look for opportunities to do more, I will look to Women’s Fund to help me make a strategic, smart decision so I can continue to help girls like Ebony succeed. As an expert resource regarding issues impacting women and girls in central Indiana I have no doubt Women’s Fund will steer me in the right direction so I can continue making a difference for young girls in our community.

Remembering Female Athletes During March Madness

March Madness is upon us. As a Hoosier, it's hard to go anywhere without some mention of the college basketball fever lasting through this weekend. This year, hosting the men's Final Four in Indianapolis - along with Butler, a hometown team, going to the Final Four - the attention seems to be heightened. Although I am not an avid fan, I can't help but get swept into the excitement.

When considering all of the attention the men's tournament receives, the women's tournament seems overshadowed. There certainly has been coverage of women's games, but it does not seem to be to the extent of the men's games. The Olympics is one forum where male and female athletes have equal coverage, but more attention should be drawn to the efforts of all female athletes.

Who are some of the women in this year's basketball tournament? Although these women hail from diverse schools and backgrounds, and have chosen a multitude of career paths, they are poised for great success in life.

We recently posted a New York Times article on our Women's Fund Facebook page about the impact of Title IX on women. The evidence is showing that women have lasting benefit from participating in sports in high school and college. Dr. Betsy Stevenson affirms this in the article, stating "It’s not just that the people who are going to do well in life play sports, but that sports help people do better in life."

I am happy women and girls have a multitude of opportunities to participate in sports. I am proud of Women's Fund's support of programs, such as Girls Inc. and Girl Scouts, helping girls develop self confidence to pursue whatever they set their mind to.

Congratulations to the student athletes playing in this weekend's tournament. I encourage all of us to seek out opportunities to support female athletes.