Covenant Endowment Trust
A church receives a significant gift from the estate of one of its members. The donor’s will states that it is to be used for camping scholarships for youth from the church. The funds are put in an account at the local bank. The membership is aging, and there are few youth attending camp. Ten years go by. The new pastor asks the board about the account. No one can remember what it was for. The church needs some repairs on the roof. Since the money is there, it seems logical to use it to keep the church and its members dry on Sunday mornings.
Do you have funds like this in your ministry accounts? Are you a potential donor of such funds, but worry that your intent for the money might not be carried out? As a ministry leader, do you worry about your stewardship of specifically designated ministry funds?
The Covenant Endowment Trust was created for this type of situation. Covenant Endowment Trust accounts maintain the principal, and make a 5% payout to the ministry each year. When the Endowment Trust account is established, the donor’s designation for the gift becomes part of the formal agreement which sets up the account. The funds are managed and invested by Covenant Trust Company®, which specializes in professional asset management for individuals and Covenant ministries. Ministries can use the Covenant Endowment Trust for funds already on hand. [view our complete brochure on the Covenant Endowment Trust]
Individuals can use the Covenant Endowment Trust in two ways. A gift can be made now, the account established, and the ministry begins receiving income this year. The principal remains in the Covenant Endowment Trust account in perpetuity (forever), unless the donor specifies that the principal may be paid out after a term of years. Individuals can also name the Covenant Endowment Trust to receive a bequest from a will or trust. The account is established after death, and the ministry receives income each year thereafter.
Donors like the Covenant Endowment Trust because
- it provides regular income to their chosen ministry long beyond their lifetime
- they know the funds will be wisely invested
- each payout to the ministry carries the specific designation made by the donor, so changes in ministry leadership and the passage of time don’t matter
- it is an irrevocable gift that can provide a tax deduction for them or their estate
If the Covenant Endowment Trust fits your needs, contact your local Financial Services Representative. [view Directory]
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