Endowment Funds are funds setup for a specific purpose from which disbursements are made entirely from the accrued interest. By only disbursing the interest, the fund's principal remains intact, effectively allowing the fund to exist in perpetuity once it is fully endowed. In some instances, minimal disbursements can be made from an endowment fund before it reaches its full endowment level.
- 1 How to Setup an Endowment Fund
- 2 National Level Endowment Funds
- 3 Chapter Level Endowment Funds
How to Setup an Endowment Fund
The following steps are a general outline of steps to follow to
Set the vision
Ask yourself the following questions:
- To what/whom do I want to disburse this money?
- Why is this cause deserving of this money?
- Will this cause be around long enough to validate the need for an endowment versus year-by-year direct funding?
- Approximately how much money is envisioned to be disbursed each year? (You don't need an exact amount, but an estimate is necessary to determine how large the endowment will need to be to support it each year on the fund's interest)
After you've put thought through the high level details of your Endowment, you then need to gain more buy-in. You likely won't handle all of the organization of the fund yourself and likely won't fund the entire endowment by yourself. With that in mind, it's important before the fund is actually setup that you will have the support needed to make it successful. Make a list of at least 10 people you think will be interested in your idea. Depending on how large you estimated the endowment will need to be, you may want to make a larger list. These people will hopefully provide critical input in the planning stages as well as financial support down the road. Setup meetings (phone or in person) with the prospective supporters to discuss the high-level endowment idea and get their feedback. Make sure to capture all of their comments, both good and bad. These meetings will help determine if you have enough support to move forward with setting up endowment fund or if the support for the endowment is not there at the current time. If the support isn't there at the current time, don't throw away the research you've done; it may be worth revisiting in another year or two once your support base or general circumstances have changed.
Setup the Endowment Fund
Market and Manage the Fund
National Level Endowment Funds
The following are examples of National Endowment Funds.
The Subrosa Fund was established in 1999 to help Brothers in need due to natural disasters, accidents, or extenuating financial hardship. The name of the fund is taken from The Ritual. The term literally translates to "under the rose" and signifies a sense of secrecy. As such, the details of the amounts and recipients of this fund are not shared with the membership at large.
Jeff and Kim Johnson Existence and Expansion Endowment Fund
The Jeff and Kim Johnson Existence and Expansion Endowment Fund was wstablished in 2007 by former National President Jeff Johnson and his wife Kim. The fund provides financial support for chapter expansion efforts as well as provides financial assistance to chapters in danger of going inactive.
Lamp of Knowledge Fund
The Lamp of Knowledge Fund was established in 2007 and formally chartered into existence during Grand Chapter that year. The purpose is to increase member participation in leadership training, national events and philanthropic activities. Initial uses of the fund include funding a membership recruitment incentive plan that pays National Convention registration costs for Chapters that meet certain recruitment goals as well as provide grants for Phi Sigma Pi alumni who join the Teach For America corps.
Chapter Level Endowment Funds
The following are examples of Chapter Endowment Funds.
Alpha Tau Chapter
The Alpha Tau Chapter Endowment Fund was created on August 8, 2007. The fund uses corporate sponsorship and fundraising to financially assist students within the community through scholarships. The Endowment Fund has a board of directors consisting of undergraduate and alumni brothers of Alpha Tau.
For more information: Alpha Tau Endowment Website
Alpha Rho Chapter
Main article: Alpha Rho Chapter Endowment Fund
The Alpha Rho Chapter Endowment Fund was chartered on October 27, 2007. The intent of endowment is to fund scholarships and eventually other programming for Alpha Rho Chapter. The initial usage of the funds is as follows:
- 4/16/07 Memorial Scholarship
- Erin N. Peterson New Brother Grant
For more information: Alpha Rho Endowment Website