Purpose: The purpose of the endowment policy is to provide for the long term financial stability of the Lawrence Civic Choir by placing funds outside the general operating budget.
Funds will be invested with the Douglas County Community Foundation according to their investment policy. The LCC will not establish a true endowment with the DCCF because their policy would never again allow access to the principal—even in an emergency. Although endowment funds should be seen as money “set aside,” this policy does not preclude use of the funds for specific and critical needs of the Lawrence Civic Choir.
Endowment funds are composed of money:
- Given in memory of or in honor of a specific person
- Specially designated for the endowment by the giver
- Set aside by the Board
As a normal matter of course, all principal and income will be left in the endowment fund.
Principal: This will be defined as any deposits made into the fund plus any unused income from previous years.
Income: By this definition, income will include dividends and interest received on the principal plus any gain earned during the LCC fiscal year.
Access to endowment funds would be available in the following order:
- Current income for the fiscal year—May be accessed upon approval of the Board Finance Committee. Examples of possible uses might be to help fund the LCC Scholarship or pay bills. This should be reported to Board but does not require general Board approval.
- Average gain and income from past 3 years. Calculated as the average balance of the investment account less the principal base. This would require a majority approval of the Board. An example of possible uses might be funding special expenses for a concert.
- Invasion of the original principal. This would require approval of 2/3 of the Board of Directors and should be used only in case of emergencies and to assure the good credit of the Lawrence Civic Choir. The Board should seriously consider additional fundraising prior to invading principal.
Some donors may specify funds for certain purpose—ex. to pay for instrumental musicians. This is not encouraged due to the difficulty in maintaining financial records. However, the LCC will try to accommodate the wishes of donors. The situation referenced above might be handled by using the funds as part of the general operating budget for the year donated.