Endowment Funds

 

Every year Fishburne appeals to its loyal Alumni, parents, grandparents, staff, faculty and friends of the school asking for support of our Annual Fund. Without fail you answer that call. The money raised through the Annual Fund provides the funds necessary to secure a high level of services in the day-to-day operations of the school, providing for such things as faculty and staff salaries and general operating expenses. Because tuition does not cover expenses, this is one of the most critical components of our success as a school.

Equally as important is building the school’s endowment. Endowment funds are permanently-named funds designed to provide perpetual income to the school every year. The fund may be designated for tuition assistance (scholarship), general operations, athletics, academics, debt reduction or a host of other specific areas of on-going need.

Often individuals or groups think that it takes millions of dollars to set up and endow a fund. Actually, it is much less expensive to set up an important permanently-endowed fund at Fishburne. I hope that the following questions and answers will assist you in understanding endowment funds at FMS.

Q. What is the minimum size of a permanent endowment fund and does the school require all of the money immediately upon establishing the fund?

A. The minimum size of a permanently endowed fund is $25,000.00. The school does not require all of the money upfront. There is a five-year limit on reaching the $25,000.00 goal. For example, an individual or group can set up a fund and agree to give the school $5,000.00 a year for five years or some combination of funds that will achieve the $25,000.00 level in that time period. A number of funds are currently being established in this manner.

Q. What happens if I/we set up a fund and don’t reach the $25,000.00 minimum in five years?

A. During the five year period all gain on the principal is reinvested. In other words no money is distributed. After five years if it does not appear that a fund will reach $25,000.00 the funds are transferred to the Capital and Major Maintenance (CAMM) permanently-endowed fund. If the fund is close to the minimum or some major event has occurred that delays reaching the target, the school, through the Foundation President, may extend the deadline on a case-by-case basis. Funds established before 2009 are not subject to the $25,000.00 minimum.

Q. Once established how does the Foundation manage the money?

A. The Board of Trustees oversees the investments through the use of professional money managers. A small Investment Committee of the Board of Trustees has specific responsibility for monitoring the portfolio and working with the investment managers to achieve a reasonable rate of return without taking unnecessary risks in the portfolio.

Q. What is the Foundation’s investment policy?

A. The investment policy of the Foundation varies with the economic climate and financial outlook for stocks and bonds. Fishburne endowment funds are normally a mix of stocks and bonds ranging from a 70/30 stock to bond ratio to a 30/70 stock to bond ratio. Some specific funds have different investment policies based on donor and/or oversight committee instructions. Bob Blum ’46 chairs the Investment Committee and speaks regularly with our investment managers to adjust the portfolio mix.

Q. How does inflation affect the principal of an endowment fund?

A. Effective with the fiscal year starting in June of 2005, the Foundation requires that the first 3% in gain from investments is rolled back into the principal basis of a fund. For example, if a fund worth $50,000.00 gains five percent ($2,500.00) in a year, then $1,500.00 would be rolled into the principal and $1,000.00 would be available for use in meeting the fund’s objective (tuition assistance, academics, etc.). The following year the fund’s balance would start at $51,500.00. This allows the permanent endowment to grow at or above current inflation rates.

Q. May I contribute to an already existing fund and what happens if I simply designate “endowment” or “general endowment” for my gift?

A. You may contribute to any fund that is currently established at Fishburne. For instance, every year Fishburne Alumni contribute to funds established in honor of Colonel Edward P. Childs, Jr. and Major Denzil “Chief” Windon. Per Foundation directive, all undirected contributions to “general endowment” or “endowment” are assigned to the Capital and Major Maintenance (CAMM) permanently endowed fund.

Q. What are the limits on naming opportunities and who decides the name and objectives of the fund?

A. There is virtually no limit, other than good taste, on the name of a fund. Examples for individuals establishing a fund include naming a fund after your family, a staff or faculty member, parents, or a classmate. For larger groups such as a class or parents of the class, naming opportunities are the same as for an individual and may be expanded to include examples such as “Class of 1957 Fund”, “Class of 2013 Fund”, the “Fairfax Hall Fund” (in memory of the lovely ladies across town), Varsity Club Fund or other such names that evoke memories and can serve as a permanent legacy. The objectives are determined by the donor(s), preferably in coordination with the Superintendent and the Foundation President who can articulate the long-term needs of the school to the donor(s). All fund names and objectives are submitted to the Foundation Officers for final approval.

Q. What is more important the Annual Fund or Endowment?

A. Fishburne cannot afford to see a reduction in the Annual Fund. Therefore, it is important that your individual Annual Fund gift remain at or above current levels. Endowment gifts should be gifts in addition to the level of your current giving level and this is why we allow five years to meet the objective and encourage groups or classes to pool resources.

Q. How do I/we go about establishing a fund?

A. Nothing could be simpler. Contact our Director of Alumni Affairs, Debbie Todd, at 1-540-946-7716 and she will ensure that our Superintendent, Colonel Gary Morrison and/or Board President, Ted Moroney, will promptly contact you.

To learn more about Endowment Funds at Fishburne Military School, or for more information about how to best meet your philanthropic needs, please contact Alumni@Fishburne.org or call (540) 946-7700 ext. 106.