Board Policy: Endowment Management
DRAFTDRAFT Endowment Management Policy
Draft Board Policy: Endowment Management (LIM-XXX)
Policy Title: Endowment Management Policy
Purpose: To ensure the prudent management of The Circle School Endowment, safeguarding its long-term sustainability while supporting the mission of the school.
1. Purpose of the Endowment
The Circle School Endowment exists to secure the long-term stability and resilience of The Circle School’s mission. The endowment ensures the school can:
- Weather economic challenges.
- Maintain affordable tuition.
- Provide meaningful financial aid.
- Support staff compensation and development.
- Preserve the school’s values, culture, and legacy for future generations.
2. Gift Acceptance
- Contributions to the endowment shall be irrevocable and designated solely for the Endowment Fund.
- All endowment contributions are subject to The Circle School’s charitable gift acceptance policies.
3. Investment Principles
- Endowment funds shall be invested in accordance with The Circle School’s investment policy, prioritizing:
- Total return and growth.
- Diversification, safety, and liquidity.
- Endowment assets may be pooled with other assets for cost-effective management.
4. Distribution for Expenditure
- Threshold for Withdrawals:
- Withdrawals may begin once the fund reaches $1,000,000 or on July 1, 2035, whichever occurs first.
- Before this milestone, all income and capital appreciation shall be reinvested to grow the principal.
- Distribution Limits:
- Once eligible, annual distributions shall be between 2% and 7% of the fund’s value at the end of the prior calendar year.
- Extraordinary withdrawals (a) exceeding 7% or (b) occurring before the endowment balance reaches $1,000,000 require approval by a two-thirds majority of the Board of Trustees and must align with the school’s long-term interests.
- Considerations:
- Distribution decisions shall account for the fund’s earnings, economic conditions, extraordinary needs, and the goal of maintaining principal.
5. Recognition of Donors
- The Circle School will honor endowment donors in ways that reflect the values of inclusivity and community.
- Donors may choose to remain anonymous or be publicly recognized.
- The Board reserves the right to determine appropriate recognition methods.
6. Reporting and Transparency
- The Board of Trustees shall receive an annual report on the endowment’s performance, distributions, and impact.
- A summary of endowment activity shall be shared with the community during the school’s annual meeting.
7. Policy Amendments
- Amendments to this policy require approval by a two-thirds majority of the Board of Trustees.
- Any changes must honor the original intent of the endowment to the greatest extent possible.