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The AQHA office is closed Thursday, December 25, Friday, December 26, and Thursday, January 1.

Endowments

An endowment is an investment in the future of the American Quarter Horse Foundation.

An endowment is an investment in the future of the American Quarter Horse Foundation. When you use your charitable gift to establish an endowment, the gift is invested with two goals in mind: to provide spendable income for whatever specific purpose you have designated and to make the principal grow faster than inflation. The original principal (or gift) is never spent, and any investment return is channeled back into the fund to keep it healthy and growing.

What makes endowed giving different from annual giving?
Simply put – annual giving helps support continual operations, while endowed giving creates building blocks for long-term growth. Many donors who give to established endowments or create named endowments also participate in annual giving. Both types of giving are critical to the Foundation’s success, but an endowment is distinct and unique in its impact on the American Quarter Horse Foundation.

Can I make a gift to an established endowment fund?
Anyone can give to an established endowment fund. Please contact the development offices to learn more about these established funds. All gifts to established endowment funds are considered permanently restricted.  In other words, your gift becomes part of the fund corpus and can never be spent. Only the interest is distributed to support the intent of the fund.

How do I establish a named endowment fund and what can it support?
You may make a gift or pledge to any of the Foundation’s programs to establish a named endowment fund.  A named endowment fund leaves a permanent legacy to the programs of the Foundation and forever links your name or that of your honoree with that important Foundation program. Minimum endowment gifts to the following programs can be made in order to establish a named endowment fund:
        
        Scholarship: $100,000

        America’s Horse Cares: $100,000

        Equine Research: $250,000

        Horsemanship Camp: $350,000

Endowments are invested long-term in an investment pool overseen by the Investment Oversight Committee of the Board of Trustees. Endowments receive interest and market value adjustments based on the actual results of the investment pool, net of investment management fees. More information is available by requesting a copy of the Foundation’s Investment/Spending Policy.

Why is an endowment agreement needed?
Whenever a gift is restricted for a particular purpose by the donor, an endowment agreement is created. An agreement ensures the gift will always be used exactly as you intend. The agreement sets out your specific criteria for how the Foundation will utilize your gift and how its income will be distributed. A Foundation staff member will assist you by drafting and explaining the agreement. An agreement also enables your endowment to be invested and the investment return to be used toward the endowment’s purpose.

How is the spending allocation determined?
Once your endowment is fully funded and invested for at least one fiscal year, an annual spending allocation will be calculated for your fund. Waiting at least one fiscal year allows your endowment to earn investment returns to support spending and increases the probability of an annual increase in the amount available to spend from your endowment. If there is no investment return in excess of the original amount of the endowed gift, then no spending is allowed.

The annual spending allocation is based on a predetermined rate applied to the average balance of your endowment and is limited to available investment return. The spending rate is determined by the Investment Oversight Committee in consideration of maximizing both spending and endowment growth and currently is 5.0 percent. The average balance of your endowment is calculated using the year end balances for the previous  3 fiscal years. This averaging helps smooth the effects of market fluctuations. Unused spending allocations can be rolled over to the next year subject to certain limitations. Investment return in excess of the spending allocation is retained within the endowment increasing its size over time and, therefore, increasing the amount of support generated for the donor’s specified program. More information is available in the Foundation’s Investment/Spending Policy.

For more information about endowments or about the American Quarter Horse Foundation, please call (806) 378-5029 or Email foundation@aqha.org.