An endowment is a fund with money in it, set up to provide long-term support for a particular nonprofit organization or cause.

Expenditures from the endowment are important to our Church for many reasons. The two most important uses are these:

• Support for annual budget, last year totaling approximately $50,000 a year for the past several years.

• Care and maintenance of our beautiful and historic church building.

Our annual budget is carefully crafted each year to support our staff, our programs, and the mission of our church. The impact of reducing our annual expenditures by approximately $50,000 would be devastating to our budget.

Our church building, originally completed in 1809, is magnificent and it is an icon of the Town of Middlebury. But it is also an expensive building to maintain. Without the funds provided by the Church Building endowment account, the ongoing costs of this maintenance could be an intolerable burden for our membership and our Church budget. Having an endowment to provide a significant portion of the maintenance needs of the church building enables our church members to focus most of their resources each year on the important mission of the Christian Church.

Our endowment was initiated by three gifts made in the 1890s that created funds for which only the income could be used, ensuring that the funds continue to support the Church "in perpetuity". Nearly all funds in our endowment have come in the form of bequests from the estates of Church members made over the past 125 years. The focus of the endowment is on meeting the continuing needs of the Church for the long run. It is thus natural that we rely on bequests from our members for these funds.

Our Church's endowment, managed by the Board of Trustees, is comprised of three accounts: Fiscal, Church Building, and Restricted. Each account contains funds provided by a named donor or a specific bequest. Some funds specify that only the income earned may be expended, and other funds permit the expenditures of both principal and/or income.

The Fiscal Account is our Unrestricted Endowment; funds withdrawn may be used for any purpose. For many years we have used this fund to support our annual budget expenditures. The rate of spending on this account is limited, by vote of the congregation, to four percent of a five-year average value of the account. This policy ensures stability of the income provided each year, and in years when investment earnings exceed four percent it provides for some growth of the account.

The Church Building Account provides resources for the "Care and Maintenance of the Church Building." Its primary uses have been for painting the building, repairs and painting of the steeple, repairs to the slate roof, installing heat pumps in Fellowship Hall, and the historic window preservation project. The Board of Trustees has generally limited expenditures from the Building Account to items that exceed $10,000 in cost.

The Restricted Account contains funds having specific purposes designated by the donor, usually through their bequests to the Church. For example, existing funds support: annual gifts to individuals with specific needs; discretionary support for the work of our Boards of Deacons and Pastoral Care; purchases of library books and of music; maintenance and other support for the organ; and flowers used in the sanctuary.

Our endowment is managed by the Board of Trustees, and the Trustees delegate some of the management to the Investments Subcommittee and to an investments management firm (currently Charles Schwab Corporation and One Day in July). The Trustees and the Church Council have endorsed a "goals and policies" statement for our endowment that clarifies the long-range perspective for the endowment. In particular, the statement includes the following:

The Church needs income from its endowed funds, each year and in the long run, to meet operating budgets and to provide for the continuing care and maintenance of the physical building. Therefore, the Church seeks to manage its endowment carefully and wisely, and to preserve its long-range buying power.