Endowing the Church for Continuing Ministry

The Virginia United Methodist Foundation was formed to assist churches, agencies and institutions of the Virginia Conference in establishing and developing endowment programs and investing endowment funds to benefit the local church and/or causes related to the United Methodist Church.

Endowment is one of the most beautiful words in the English language. It means to make an investment in the future, to provide an income, usually for a cause in which you believe strongly and in which you have been involved during your lifetime.

Providing endowment for a local church or for some agency or institution of the church is a worthy endeavor. It can be accomplished in a number of ways and can have significant tax benefits for the donor or donors.

Gifts for endowment are either current gifts, perhaps of appreciated securities, or deferred gifts in the form of life income trusts or gift annuities, life insurance, or bequests in one’s will. In making such a gift you are assisting a cause of the United Methodist Church and helping yourself through tax savings.

Normally, a gift for endowment does not come from current income but rather out of accumulated income or some special income from the sale of property, or inheritance. There are special times in your life when you think of these gifts — retirement, an anniversary, a birthday, marriage of children, loss of a spouse. These are times when we think of our own mortality and when we are more concerned about planning for the future. Therefore, such gifts are often referred to as planned gifts. In these deferred gifts, you make the proper provisions for the gift now, with certain favorable tax consequences, but the gift actually does not pass to the charitable organization until a later date, usually at the death of the donor, or the donor and a spouse.

An outright gift made now gives the donor an important immediate charitable deduction for income tax purposes plus it removes the value of this gift from any estate tax burden. If appreciated securities are used, this can create additional tax savings. Using a life insurance policy can be a good way to make a substantial gift and get tax savings, or donating your home, reserving for you and your spouse the right of life tenancy.

The most utilized kind of deferred gift is a bequest in one’s will. This may be for a specific amount or a percentage of your estate or the remainder of your estate after all other obligations have been fulfilled. This form of gift is set forth in a written declaration in your will. You will want to arrange this form of gift with the assistance of your attorney. Many individuals include their local church or some agency or institution of the church in their wills each year. These bequests, large and small, can have a significant impact on these churches or institutions for years to come.

A life income charitable gift is a wonderful way to retain a tax favorable income stream for your lifetime, and perhaps the lifetime of your spouse, while setting aside a significant gift for a cause in which you believe strongly. This can be done through a charitable gift annuity or a charitable remainder trust. They vary in the income distribution but are both life income arrangements with a remainder gift to your cause — local church or otherwise. Both giving methods provide an immediate charitable gift deduction and, if appreciated securities are used, additional tax savings can be realized.

In making such a gift — either a current gift or a deferred gift — there are opportunities for placing your name or the name of a loved one on a named endowment fund which will live on in perpetuity. This may be a scholarship fund, a library fund, a music fund, an education fund or a youth fund, or some other opportunity identified by you and the beneficiary institution. There are many opportunities in your local church and in agencies and institutions of the Virginia Conference to make an investment in the future for the mission and ministry of the Church of Jesus Christ.

For more information contact Jim Bergdoll, Foundation director, at (804) 521-1120 or 1-800-768-6040, ext. 120; e-mail JimBergdoll@vaumc.org