Creating an Endowed Fund
Endowments established through the Chesapeake College Foundation truly are legacies of generosity. By creating endowed funds, donors can support both their own values and college needs in perpetuity.
Below are frequently asked questions about endowments.
What is an endowment?
An endowment is a fund established to permanently support a specific need at the college. The donor or donors who establish the endowment can name the fund and designate its use to support the values they hold most dear.
Unlike gifts received for immediate use, endowed gifts keep giving over time. They are placed in accounts from which a portion of the annual investment earnings are used for the purpose(s) specified by the donor. Remaining earnings are reinvested, thereby growing the fund year to year.
Why should I consider creating an endowment?
By establishing an endowed fund through the Chesapeake College Foundation, your money will provide a perpetual and sustainable source of revenue for the programs or students you designate. The department, program or scholarship fund you support through an endowment will be able to count on your fund’s annual support when planning for the future.
Creating an endowed fund also provides you with the opportunity to honor a loved one or a respected colleague or mentor. The impact of your fund’s annual support can be a permanent reminder to others of a person whose life and example you treasure.
How can I establish an endowment?
An endowment is established when an account contains a minimum of $10,000 and you have completed the paperwork that details the criteria of your fund. You can create an endowment by making a lump-sum gift of $10,000 or more, or by contributions over a period of up to three years until the minimum endowment amount is reached. Once you decide to create an endowment, the Chesapeake College Foundation staff will work with you to develop award criteria that reflect your interests while effectively meeting the greatest needs of the College.
How are endowed fund distributions made?
Once a fund is endowed, the established criteria determine how the Foundation distributes the endowment’s annual distribution. Newly-established endowments will be invested for a year before the first award is made to ensure enough time for growth of the fund. The amount of distribution is dependent upon the market value of the fund. The Foundation currently determines that award by taking 5% of a rolling twenty-quarter average of the market value of the fund. That rate may be changed as investment returns warrant. Over time, as the endowed fund’s principal grows, the annual distribution increases as well.
Can I or others add to my endowed fund?
There is no maximum level for an endowed fund, and you may add to the fund at any time. Often relatives, friends and associates who share your interests also add to these funds.
Can I change the purpose of my endowed fund?
Should your interests change, you can work with the Chesapeake College Foundation staff to change the purpose of your endowment to better reflect your priorities.
Can I select the beneficiaries of my endowed fund?
According to IRS regulations, donors of charitable gifts may only designate a purpose or department to benefit from their gift, not specific individuals.
Can I learn about the beneficiaries of my endowed fund?
Once scholarship awards have been finalized and students are past the drop-add period (usually six weeks into the semester), we will send you information about the recipient(s) of your scholarship fund. Also, the Foundation holds an Annual Scholarship Recognition Luncheon, to which donors and scholarship recipients are invited. This is a wonderful opportunity to meet those who have benefited from your generosity. We usually hold it around Thanksgiving, which is a perfect time to express our gratitude to you.