Endowment Fund Saint Paul Lutheran Church Canfield Avenue - Norwood Park, Illinois

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1 Endowment Fund Saint Paul Lutheran Church Canfield Avenue - Norwood Park, Illinois BYLAWS I DEFINITIONS A. The term Congregation in this document refers to St. Paul Lutheran Church on Canfield Avenue, Norwood Park, Illinois. B. The term Congregational Voters or Voters Meeting shall have the same meaning as that described the Constitution of St. Paul Lutheran Church and in the Bylaws of the congregation. C. The terms Congregational Endowment, Endowment, Endowment Fund, and Fund mean the St. Paul Lutheran Church Endowment Fund. It shall be one of the funds of this congregation. D. The terms Endowment Committee, Fund Committee, and Committee connote the St. Paul Lutheran Church Endowment Committee. E. The terms expenditure, expenditures, and expended shall mean any use, disbursement, distribution, transfer, and withdrawal of Fund assets. II ESTABLISHMENT AND PURPOSE A. St. Paul Lutheran Church shall have a Congregational Endowment Fund. The Fund shall be called the St. Paul Lutheran Church Endowment Fund. It shall be one of the funds of the congregation. B. The purpose of the Fund shall be to further proclaim the Gospel and ministry of our Lord Jesus Christ by: 1. receiving donations, gifts, and bequests; and 2. earning investment interest on principal within the fund; and 3. providing financial support or seed money for special ministry projects above and beyond the normal scope of the congregation s budget and non-budgeted accounts. C. The Fund may receive gifts, donations, and bequests unrestricted as to their use. D. The Fund may receive gifts, donations, and bequests restricted as to their use. This may include special terms or conditions, limitations or directions as to the use of the principal and interest. E. Special ministry projects shall include, but not be limited to: scholarships, special evangelism and outreach programs, retreats and conventions not required by the Lutheran Church Missouri Synod or Northern Illinois District, special training programs, social ministries, and start-up programs or special projects approved by the congregation. Endowment Committee 1 2/23/2014, 5/10/13, 5/4/13, 4/27/13, 1/6/09

2 III IV PARAMETER Use of the Endowment Fund shall be subject to the following limitations: A. The income from unrestricted donations, gifts, and bequests to the Fund shall be used only for activities, programs, and projects which are consistent with the purpose of the Fund and which may be recommended by the Endowment Committee. B. Income from restricted donations, gifts, and bequests to the Fund shall be used only for activities, programs, and projects which are consistent with the purpose of the Fund, the donor s terms, and other considerations which may be recommended by the Endowment Committee. C. No more than 5% of total unrestricted Fund assets may be expended annually. Of that amount, no more than 10% may be used for the St. Paul Church yearly budget. D. Expenditures of the Fund are subject to a two-thirds (2/3) majority approval of the Congregational Voters at a duly convened Voters Meeting. E. During the initial two (2) years of a new ministry, as referenced in II B 3 above, the income or part thereof of the Fund may be used on a proportionally decreasing basis so that by the end of the second or third year, the new activity, program or project becomes fully supported by the operating budget or a nonbudgeted account. F. The St. Paul Board of Directors shall return any unused income to the Fund no later than two (2) years from the date of original approval. G. Assets of the Fund shall not be loaned to the congregation or to any organization with which it is associated. COMMITTEE The Endowment Fund shall be managed by a committee to be comprised of members of St. Paul Lutheran Church. This panel shall be called the Endowment Committee. The Board of Directors of St. Paul Lutheran Church shall nominate no less than five (5) congregational members to serve on the Endowment Committee. The Board of Directors shall designate one nominee as Chairman and no less than four (4) nominees as members. All nominees shall be submitted to the Congregational Voters for consideration. The Chairman and other committee members shall be elected by majority vote at a duly convened Voters Meeting. The original Committee shall have staggered terms with the Chairman and two (2) members starting with a three (3) year term and the other two (2) members starting with a one year term. Thereafter, all members shall have a term of three (3) years. There shall be no limitation as to the number of terms one may serve. However, only one member of any household shall serve on the Committee at one time. Endowment Committee 2 2/23/2014, 5/10/13, 5/4/13, 4/27/13, 1/6/09

3 The Endowment Committee shall not have ex-officio members. However, the Committee shall notify and invite the Congregational Chairman, Pastor, and other designated persons to any and all Committee meetings. Members of the Endowment Committee shall receive a copy of the Fund Bylaws, participate in an orientation session, and become acquainted with the function and purpose of the Fund. The Committee shall have general administrative powers over the Endowment Fund and be responsible for the promotion and maintenance of the Fund. This shall include the direction of all un-designated gifts, investments, and related activities. The Endowment Committee shall report to the Board of Directors at least twice annually. The Committee shall solicit recommendations regarding income and expenditure of endowment funds from the congregation in advance of its semi-annual meetings. Then, the Committee shall report and present the committee s recommendations to the Congregational Voters Meeting. The Voters shall, upon receiving the Committee s recommendation(s), approve or disapprove the disbursement and /or allocation of earned income by a vote consistent with the Constitution of the congregation. The Committee may establish such written rules and regulations beyond what is in these Bylaws as may be necessary for the conduct of its business. It may adopt standards and goals to guide in the expenditure of the income from the Fund, which it may amend, all within the stated purposes of the Fund. If the Board of Directors determines that the Endowment Committee is not fulfilling its responsibilities as provided for in these Bylaws, the Board may call for a special meeting of the Congregational Voters and offer a recommendation to rectify the situation. Any vacancy occurring on the Endowment Committee shall be filled by the Board of Directors to fill the unexpired term of his or her predecessor in office. V OFFICERS The Endowment Committee shall elect its own officers, exclusive of the Chairman, and determine their responsibilities and authority. These shall include, but not be limited to: A. Chairman This person shall preside at all meetings following Robert s Rules of Order, Revised Edition. The Chairman shall co-sign all expenditures of the Fund. The Chairman or Committee shall designate an acting chairman in that person s absence or inability to serve. B. Secretary This person shall maintain complete and accurate minutes of all meetings of the Fund Committee and supply a copy thereof to each committee member within thirty days after the meeting. The Secretary shall maintain a separate current record of all committee proceedings for congregational reference indicating the dates resolutions and motions were acted upon. Endowment Committee 3 2/23/2014, 5/10/13, 5/4/13, 4/27/13, 1/6/09

4 C. Treasurer This person shall be responsible for the receipts and disbursements from the Fund and maintain complete, accurate, and up-to-date financial records to reflect the current financial status of the Fund. The Treasurer shall be co-signer of all expenditures of the Fund. The Fund Treasurer shall in no case be the Congregational Treasurer. The Treasurer shall submit a written report at least annually to the Congregational Voters and submit all financial records for audit at least annually or at the request of the Committee. This report shall then become part of the congregation s Annual Report. D. Bonding A bond shall be purchased for the Chairman and Treasurer using the Endowment Fund in an amount to be determined by the Committee. VI VII MEETINGS Quorum - A majority of the Endowment Committee shall constitute a quorum. The affirmative vote of a majority of a quorum shall be necessary to carry any motion or resolution of the committee. (Example: A 5 member committee with only 3 in attendance can achieve quorum and 2 voters present can act.) Regular The Fund Committee shall meet no less than two times each year as called by the Committee Chairman. Special - The Chairman or any two (2) members of the Committee may call special meetings. All Committee members shall receive at least forty-eight hour prior written or verbal notice of such special meeting. FUND MANAGEMENT The Endowment Fund may, at any time, receive gifts, donations, and bequests from any individual, firm or corporation in money, securities, or any other form of property including (by way of explanation and not in limitation) direct gifts for the purpose of the Fund, gifts given in memory of a deceased person or in appreciation or in recognition of a living person, gifts in the form of a devise or bequest under a Will or Trust instrument, and gifts or proceeds (or portions of proceeds) of insurance, annuity, or Trust policies or contracts. Such gifts are subject to the approval of the Endowment Committee and the Congregational Voters. The Endowment Committee shall manage and administer the Fund directly or indirectly, in a prudent manner in whatever investment it deems reasonable and not otherwise restricted by law. The purpose of such investments shall be to seek both income and capital appreciation while (a) requiring the safety of the corpus as the primary consideration, and (b) requiring diversification of investments. The Committee shall separate and maintain the assets of the Fund, distinct and independent from the funds and property otherwise belonging to the Church. However, the Committee shall in no event be required to make physical segregation of the assets of the Fund in order to conform to the directions of any individual donors, though it may establish separate accounts in its accounting records. Endowment Committee 4 2/23/2014, 5/10/13, 5/4/13, 4/27/13, 1/6/09

5 Although safety and security of all Fund assets is being sought at all times, it is recognized that losses may occur due to circumstances beyond the control of the Fund Committee; e.g., market conditions, economic changes, etc Individuals who desire to support the Fund should designate that their gift, donation, or bequest to: St. Paul Lutheran Church of 5650 N Canfield Avenue, Norwood Park Township, Illinois for the St. Paul Lutheran Church Endowment Fund. Specified categories to which donors may make gifts or bequests for religious, charitable or educational purposes are as follows: A. Unrestricted Funds The Unrestricted Funds category is for undesignated gifts and bequests with no limitation on use. There is no minimum or maximum contribution amount. 1. Unrestricted income to the Fund can be received by the Endowment Committee at any time by a simple majority vote. The Committee shall submit to the Congregational Voters a request to ratify any income received during the time between such meetings. A simple affirmative majority of the Voters is required for acceptance. 2. Expenditures from the Fund may occur on no more than an annual basis. The income from undesignated gifts and bequests to the Endowment may be expended only within the purpose of section II and parameters of section III above. This shall require three (3) votes of the Endowment Committee and two-thirds (2/3) approval of the Voters. B. Congregational Restricted Funds The Congregational Restricted Funds category is for gifts specifically designated to support existing ministry activities and programs of St. Paul Lutheran Church. There is a minimum contribution amount of $1, Congregational restricted income to the Fund can be received by the Endowment Committee at any time by a simple majority vote. The Committee shall submit to the Congregational Voters a request to ratify any income received during the time between such meetings. A simple affirmative majority of the Voters is required for acceptance. 2. Expenditures from the Fund may occur on no more than an annual basis. The income from designated gifts and bequests to the Endowment may be expended only within the purpose of section II and parameters of section III above. This shall require three (3) votes of the Endowment Committee and two-thirds (2/3) approval of the Voters. C. Donor Restricted Funds The Donor Restricted Funds category is for gifts designated by the donor that may have restrictions on use, how interest/earnings and principal are to be distributed, and over what time period expenditures are to take place. Endowment Committee 5 2/23/2014, 5/10/13, 5/4/13, 4/27/13, 1/6/09

6 1. Gifts and bequests may be given by the donor with special terms or conditions as to the use of the gift and/or of the income providing that such designated use is consistent with the purpose of II and parameters of section III above. The Endowment Committee, after a simple majority vote, shall submit at the next Voters meeting (or request a special meeting), its recommendation on the acceptability of such a gift or bequest. The acceptance of such a gift shall be by a simple majority of the Voters present. 2. Expenditures from the Fund may occur on no more than an annual basis. The income from designated gifts and bequests to the Endowment is to be used only in accord with the purpose of section II and parameters of section III, and as provided for by the donor. This shall require three (3) votes of the Endowment Committee and two-thirds (2/3) approval of the Voters. D. Financial Institutions In order to properly manage the fund, the Committee shall maintain accounts with such financial institutions as it may by resolution authorize and determine. E. Qualified Financial Advisor/Investment Manager The Committee may recommend that all or part of the assets of the Fund be delivered to a qualified financial advisor and/or investment management institution. An agreement entered into for the management of the Fund shall require three (3) votes of the Endowment Committee and two-thirds (2/3) approval of the Voters. VIII FISCAL YEAR AND ACCOUNTABILITY A. For tax, accounting, or other purposes, the fiscal year of the Endowment Fund shall be the Fiscal year of St. Paul Lutheran Church. B. The Committee shall submit at a designated Voter s Meeting the itemized written statements accurately reflecting the position of the Endowment Fund's income and principal accounts, the receipts, expenditures and changes for the previous fiscal year. C. The Fund shall be subject to the annual internal Financial Review of all congregational funds and accounts. E. The Committee shall maintain complete and accurate books of account and may employ such professional help, as it deems necessary in this task. F. Every effort shall be made by parties in authority to avoid a conflict of interest or the perception of conflict of interest. The Congregational Chairman and Congregational Treasurer shall not be a co-signer of the Fund. No member of the Committee shall engage in any self-dealing or transactions with the Fund in which the member has direct or indirect financial interest and at all times refrain from any conduct in which his/her interests would conflict with the interest of the Fund. Endowment Committee 6 2/23/2014, 5/10/13, 5/4/13, 4/27/13, 1/6/09

7 IX OTHER DUTIES The Endowment Committee shall adopt procedures for review and acceptance of the assets that a donor desires to give. Gifts of cash or publicly traded securities will almost always be acceptable. However, gifts of operating businesses, partial interests in property, gifts encumbered by debt, gifts of property which may have title or environmental problems, or gifts of property which may not be marketable within a reasonable time considering the expense of owning the property may not be acceptable. In addition, certain types of property may cause adverse federal or state income tax problems for the endowment and may not be acceptable. If the Endowment Committee determines that an asset, which a donor desires to give to the Fund, is not acceptable, it will immediately explain the reasons to the donor with any suggestions or alternatives for making the asset acceptable. Some property may cause unexpected tax or other consequences to the donor. The congregation is not responsible for advising donors of the tax or other consequences of any gift. Donors are advised to consult with their own attorney, tax advisor and other professional advisors about the consequences of a gift in their circumstances. This Endowment Fund will abide by the requirements of the Internal Revenue Code and its regulations. Means for formally acknowledging the receipt of each gift and contribution shall be established and maintained in a way that permits the donor to claim a charitable tax deduction. All funds and property in the Endowment Fund shall be kept and maintained separate, distinct and independent from the funds and property otherwise belonging to the church. However, the Endowment Committee shall in no event be required to make physical segregation of the assets of the Fund in order to conform to the directions of any individual donors, but may establish separate accounts in its accounting records. The Endowment Committee may periodically arrange for members of the congregation to meet with professional counselors in the areas of charitable giving, wills, bequests, insurance, etc. X DURATION AND DISPOSITION The Endowment shall continue to exist in perpetuity and not be dissolved, so long as St. Paul Lutheran Church shall continue to exist. If the congregational voters determine by two-thirds (2/3) vote at a meeting that there is a dire emergency, principal and interest earnings may be spent. If the congregation shall cease to exist, dissolve or disband, all assets of the Endowment shall be dispersed in the same manner as all other property of the congregation. Endowment Committee 7 2/23/2014, 5/10/13, 5/4/13, 4/27/13, 1/6/09

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