Coker UMC Permanent Endowment Fund

PART V, LINE 4:

“The coker permanent endowment fund committee (the committee) of the church oversees the operation and investment of the coker umc permanent endowment fund (pef). The pef consists of two funds: the endowment trust and the endowment fund 2007. The pef's investment objectives are to: 1. Preserve the principal for the perpetuation of the pef 2. Generate income at a reasonable rate 3. Grow income and principal over and above that necessary to offset rises in the cost of living 4. Uphold the social principles of the church the committee has interpreted the texas prudent management of institutional funds act (the act) as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds, absent explicit donor stipulations to the contrary. As a result of this interpretation, the church classifies as perpetually restricted funds (1) the original value of gifts donated to the pef, (2) the original value of any subsequent gifts to the pef, and (3)10% of the annual net income of the endowment trust. The remaining portion of the annual net income of the pef that is not considered perpetually restricted net assets is classified as purpose restricted net assets until those amounts are appropriated for expenditure by the church, in a manner consistent with the articles contained in the trust agreement. Net income not distributed during a taxable year is added to the principal. Distributions of 90% of the annual net income of the endowment trust portion of the pef may be used by the church for religious, charitable, and educational purposes, to include capital improvements to church property and repair or replacement of any such improvements. No part of the income or principal shall ever be used for any purpose other than religious, charitable and/or educational purposes of the church. The committee will use the moving average method of determining year-to-year spending from the endowment fund 2007 in order to smooth distributions from the aggregate portfolio. The committee will annually determine the amount of money from the endowment fund 2007 portion of the pef to be distributed, based upon a maximum spending rate of 5% of the 3-year rolling average of the portfolio market value. The principal may only be withdrawn in extreme and overwhelming circumstances, bordering on the survival of the church itself. Any such withdrawal must be approved by a majority vote of the church conference. The committee recognizes the importance of being responsive to the ongoing needs of the church (the supported organization). The spending policy reflects the objective to distribute funds to the church in ways consistent with the primary investment goals.”