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FAQs
Q. What is the difference
between an endowment trust and a custodial account?
A. An endowment trust principal and additional contributions
continue to grow as the annual income is available to the church or agency for
its ministries as determined in the fund agreement. A custodial account
principal, additional contributions, income and capital yield are all available
for withdrawal at the request of the depositing church or agency without
penalty.
Q. Can additional funds be added to endowment trusts and
custodial accounts?
A. Yes. Any amount at anytime can be added to both of
these types of funds.
Q. Is there a minimum amount required to establish an
endowment trust or a custodial account?
A. There is a $1,000.00 minimum to establish a trust and/or a
custodial account.
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Q. Can a church or Conference-related agency have more than
one fund?
A. Yes. One local church has nine funds. Some are
trusts and some are custodial accounts. Each fund has a particular
purposes.
Q. How long does it take to receive funds when a withdrawal is
requested?
A. Turnaround is typically 1 to 3 business days. When
necessary, we make every effort to meet whatever time constraints our depositor
has.
Q. What interest rates are the Foundation currently paying?
A. There four separate investment funds that are independent
of each other. The gains are whatever the market bears for the particular
time frame. Click here for
historic returns of the UM Foundation's funds.
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Q. What investment choices does a donor, church or agency
have?
A. The UM Foundation has four funds available to accommodate
several investment objectives. There is an Income Fund with 100% fixed
fund (bonds); an Income with Growth Fund with 65% fixed income and 35% equities
(stock); a Balanced Fund with 50% fixed income and 50% equities; and a Growth
with Income Fund with 35% fixed income and 65% equities.
Q. Is there a penalty for early withdrawals?
A. Withdrawals may be made at any time up to any amount from a
custodial fund without penalty.
Q. Can my church establish a gift annuity?
A. No. Life-income gifts (gift annuities) are for
individuals and couples, not institutions.
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Q. How do gift annuities work?
A. Under the terms of a gift annuity, you make a charitable
gift of cash or other appropriate property. You and/or others, if you
desire, then receive generous fixed payments for life. The frequency and
amount of payments are determined at the time the gift annuity is funded.
The payments will never change and are designed to continue regardless of how
long you and/or other recipients live.
Q. Once I have established a gift annuity, can I get the
principal back if I need it?
A. No. A gift annuity agreement must be a permanent transfer
in order to quality for the attractive tax benefits that result from making your
gift in this way.
Q. Can a person add additional funds to a gift annuity once it
has been established?
A. Each gift annuity is specific to a date begun and the age
of the income beneficiary. What is possible is the establishment of an
additional gift annuity. There is a person who has 14 gift annuities
through the UM Foundation.
Q. What is the minimum required to establish a gift annuity or
an unitrust?
A. A minimum of $5,000.00 to establish a gift annuity and a
minimum of $50,000.00 to establish an unitrust.
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Q. What is a unitrust?
A. There is a set pay-out percentage amount agreed upon with a
unitrust arrangement (no less than 5% of market value). Future year's
payments are determined annually by using the agreed upon percentage pay-out
rate of the annual market valuation of the fund every December 31.
Q. How may lives can a gift annuity or a unitrust have?
A. Both of these types of income gifts can have a single life
or two lives, joint and survivor.
Q. Can we get a loan for our building project through the UM
Foundation's?
A. Not at this time. The focus of the Foundation is to
serve churches and Conference ministries by raising, managing, and distributing
funds.
Q. Can an individual invest money in the UM Foundation's funds
for personal investment purposes?
A. Since the Foundation is a tax-exempt non-profit
organization, we can only be the investment vehicle for non-profit entities such
as churches and Conference agencies and ministries.
Q. How is placing our church's money in the UM Foundation
different from gambling (the Book of Discipline describes gambling as "menace to
society")?
A. Gambling is leaving it to chance. Our Investment
Committee and Board of Trustees does "due diligence" necessary to determine how
our funds should be invested. They utilize the services of a professional
independent investment advisor and some of the top money managers in the
country. The investment policy of the UM Foundation has the following
objectives: to preserve principal first, then to maximize returns, to
minimize risk, and all while remaining socially responsible.
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