Creating an endowment for your church is like funding a scholarship – your money helps people grow and learn in a future where you may be long gone, but still have lasting impact.

The Presbyterian Foundation helps individuals endow their pledges and also provides advice and help to churches. In short, endowing your pledge means that you set up a permanent fund that will continue to provide the same amount as your annual stewardship pledge (or annual gift) in perpetuity.

“If doing your estate plan can give you individual peace of mind from worrying about all the details, an endowed pledge can bring peace of mind that your estate will continue to make a difference in the life of your church after you’re no longer with us,” said Stephen Keizer, vice president for Ministry Relations at the Presbyterian Foundation.

In his role, he oversees field operations for the Foundation and helps churches with stewardship and generosity.

“The concept of ‘endow your pledge’ allows someone to create an asset, or endowment, to generate the amount of money that they’re currently giving annually giving to their church,” Keizer said. “So if someone gives $1,500 a year but is unable to keep doing that, what can they do to create a fund that will continue to provide that $1,500 annually to their church’s stewardship fund?”

The answer can be an endowed pledge. To keep that same $1,500 annual pledge to the church after a person dies, they can set up a financial account of about $30,000 – 20 times the regular annual pledge.

Given average market returns over time, that endowed fund can generate enough revenue to maintain the yearly $1,500 give.

“It’s really about when someone dies, finding a way to endow their continuing pledge through their estate. For most people, we are talking about having your estate create a permanent endowment fund that covers your annual contribution through average financial growth,” he explained.

The Presbyterian Foundation can set it up and manage the endowment, Keizer said.

In the Midwest recently, a longtime church leader inherited an IRA that carried tax obligations, said Rev. Joseph Moore, Ministry Relations Officer with the Presbyterian Foundation covering the Southwest United States.

The church leader decided to endow her pledge. To best utilize the IRA fund and her tax situation, she and the Foundation arranged to have annual distributions made to her endowment for 10 years. The pledge will be shared back to the church upon her death.

“It’s a cool arrangement in that she’s got this IRA that she doesn’t really need for her own income, but she wants to endow her pledge with that money,” Moore said. “And, there’s some tax advantages to her as well.

“We all agreed that setting up a permanent endowment fund, and funding it over 10 years, really checks the most the boxes for what she wanted to do and what is best for her and the church. Here at the (Presbyterian) Foundation, we can be a place that helps donors sort out those options,” Moore said.

When established donors die or move away, it can take years, or multiple new members over time, to regrow that baseline of financial stability. An endowed pledge or similar endowment can make a long-term difference to any church.