proposed Endowment policy

The purpose of this Resolution is to establish guidelines for the management and use of the Endowment Fund of the Unitarian Universalist Congregation of Rockville (the “Congregation”). The Endowment, as established in 1997 and continued through this Amendment, assures the long-term financial health and sustainability of the Congregation. This Endowment Fund provides a continuing means of support for UUCR’s mission, programs, and administration, and to meet the extraordinary expenses of the Congregation as described below.

The Endowment Fund may receive and manage gifts in various forms, including but not limited to cash, securities, real estate, bequests, and life insurance policies designated for the long-term financial support of the Congregation.

The Endowment Fund’s Assets shall be maintained separately from the Congregation’s operating funds. The UUCR Investment Committee, established by charter by the Board of Trustees (also the “Board”), shall be responsible for overseeing the management of the Endowment Fund’s assets. The Board of Trustees shall appoint the Chair of the Investment Committee as well as approve 3-5 members for renewable terms of three years. The members of the Investment Committee shall only act in the best interests of the Congregation, prioritizing Fund goals over any personal financial or other interests. The members are:

(1) prohibited from receiving any direct or indirect financial benefit from transactions or investment decisions made by the Investment Committee or the Endowment Fund, including, but not limited to, commissions, finder’s fees, consulting fees, or personal loans;

(2) obligated to disclose any actual or potential conflicts of interest before participating in discussions or decisions related to Investment Committee Endowment Fund transactions, and to recuse themselves from discussions and voting if the Investment Committee deems it appropriate; and

(3) shall not be held liable for any losses which may occur in the investment of the Endowment Fund’s assets, except to the extent that such losses were caused by gross negligence or bad faith.

By majority vote, the Board may remove a member of the Investment Committee for any reason deemed to be in the Congregation’s best interest, including, but not limited to, malfeasance or negligence.

In the event that the Board judges that the Investment Committee can no longer adequately perform its duties, the Board shall invest the Endowment Fund’s holdings in the Unitarian Universalist Common Endowment Fund (UUCEF).

The Investment Committee shall follow the most current Board Investment Policy that provides investment guidelines for the Endowment Fund.

The Investment Committee may solicit professional counseling on investments or legal matters as it deems to be in the best interests of the Fund. Payment for such services may be made from the Endowment Fund’s income. Annual expenses in excess of $500 shall require Board approval.

The Principal of the Fund shall be preserved and not invaded, except in extraordinary circumstances as determined by a 5-member vote of the Board of Trustees and a two-thirds majority vote of the Congregation at a duly called Congregational meeting where a quorum is present.

In the event that the market experiences a significant downturn and the Total Market Value (TMV) of the Endowment falls below the Endowment’s Principal, no further distributions can be made until the Endowment’s assets return to the highest prior Principal balance high.

The Treasurer/Bookkeeper shall determine what is accumulated income and what is principal using generally accepted accounting principles. For investment purposes, the Treasurer and Bookkeeper shall track on a monthly basis the TMV of the Endowment, reported in component parts as:

(a) the Principal, which is the sum of all donor contributions to the Fund;

(b) the Total Accumulated Income Available, which is the sum of all interest, dividends, market gains or losses, less any expenditures from the inception of the Fund, and (c) the sum of the Fiscal Year to Date Income which is the market gains and losses, income and dividends from the beginning of the Fiscal Year.

Each fiscal year, with a five-member majority Board meeting vote, the Board is authorized to distribute up to 4% of the Endowment’s TMV for item 6.1 below, as averaged over the prior three calendar years, as stated in the December Treasurer’s Report. Additionally, by special Board vote for a priority capital facility need, the Boad may distribute up to 15% of the Endowment’s TMV for item 6.2 below, as averaged over the prior three calendar years, as stated in the December Treasurer’s Report. The Board shall report the percentage and amount of the distributions to the congregation annually.

Any distributions of accumulated income beyond this authorized amount shall be approved by a simple majority vote of the congregation at a duly called congregational meeting where a quorum is present:

6.1 Provide funds to achieve Congregational priorities as set forth in Board planning initiatives, to meet operating expenses, to promote liberal religion in special ways as appropriate, and/or for deficit reduction of the Congregation, as defined by the Board.

6.2 Provide funds to maintain and enhance the physical plant of UUCR, including capital improvements, repairs, and renovations, as well as facility debt reduction, and/or closure of mortgages entered into by the Board of Trustees.

Endowment Fund allocations as defined in item 6.1 above can only be approved at the end of the current fiscal year at the time the Board approves the following year’s operating budget. Any operating expense allocations from the Endowment Fund by the Board remains available for spending through the next fiscal year. Any funds that are unspent at the end of that fiscal year shall be returned to the Endowment Fund as a return of income.

The Treasurer/Bookkeeper shall maintain accurate books of account for the Endowment Fund. A summary report of Endowment Fund holdings shall be reported to the Board through the monthly Treasurer’s report. The Secretary to the Investment Committee shall keep accurate minutes of all meetings and provide copies to the Board and to the Finance Committee.

The Treasurer/Bookkeeper shall provide a monthly report to the Investment Committee that separately tracks the performance of each mutual fund in the Investment Committee’s Endowment holdings. Holdings shall be tracked by principal and accumulated income.

The Investment Committee shall provide an annual report to the Board of Trustees detailing the performance of the Endowment Fund. The annual investment report shall include a summary of the Endowment Fund’s financial status and investment performance, and shall identify income distributions to the operating budget, if any.

This Endowment Policy may be amended by a 5-member majority vote of the Board of Trustees and a two-thirds majority vote by Congregants attending a duly called Congregational meeting that meets the quorum requirements set forth in the Bylaws.

In the event that the Unitarian Universalist Congregation of Rockville ceases to exist, either through merger or dissolution, disposition of transfer of the assets of the Endowment Fund shall be at the discretion of the Board of Trustees in accordance with the Congregation’s Articles of Incorporation and Bylaws, and in consultation with the Unitarian Universalist Association. The Board of Trustees shall ensure that the funds are used for purposes consistent with the mission of the Congregation.