Building A Legacy Through NIACC Endowments

Everlasting Legacy for You or a Loved One

Eternal Support for College and Students

An Investment for Future Generations

What is an endowed fund?

An endowment is an eternal fund that provides annual income for current needs. Your original gift is invested to maximize total return––interest plus market value. To help facilitate this goal, the Foundation Board has adopted an annual spending policy for endowed funds that is limited to five percent of the market value of the endowment averaged over the preceding three years. Earnings are reinvested to protect the original investment (gift) against inflation.

When did endowments start?

Countless charitable endowments arose during the 18th and 19th Centuries in England and eventually private universities in the United States started developing endowments. The latest endowment report shows over 25 universities/colleges have endowments over $1 billion. Grinnell College (in Grinnell, Iowa) joined this exclusive group in 1998.

NIACC Foundation’s Endowment Experience

NIACC’s first endowment fund was started in the 1970s. Over the years, our endowments have grown to more than 60 funds. Most were created to provide scholarship support. Our funds range from $5,000 to over $500,000. NIACC’s endowment funds total approximately $3,900,000 which is low when compared to other community colleges. The top 20 community college endowments show a range from $7,800,000 to $134,000,000.

Why are endowments important?

• Help ensure educational opportunities for future generations
• Help NIACC turn what “might have been” into “what is”
• Create future financial stability for NIACC
• Allow donors to touch people’s lives forever through an everlasting legacy
• Allow donors to direct their resources to specific areas of interest
• Offer donors potential income tax savings, capital gains tax savings, and reduced estate taxes

You decide how your endowment fund will be used!

NIACC uses endowment funds in two, basic ways. Unrestricted funds provide annual support that NIACC can use for timely opportunities, innovative ideas, or areas of greatest need. Restricted funds are allocated for a specific project depending upon your interests. NIACC offers many endowment opportunities:

Unrestricted Endowment Fund:

Can recognize exceptional achievement, inspire passion for learning, capitalize on our strengths, or enhance facilities and resources.

Endow and Name a Scholarship:

Rewards students for special talents, academic performance, or financial need.

Endow and Name a Program:

Support a specific program (Agricultural Operations, Automotive Service Technology, Legal or Medical Secretary, Retail Management, Music (Instrumental or Vocal), Physical Therapist Assistant, etc).

Endow and Name a Division:

Support a specific division or department (Agriculture, Athletics, Business, Fine Arts, Health, Humanities, Industrial, Social Sciences, Natural Sciences, etc).

Endowed Faculty Development Fund:

Rewards teaching excellence through support of curriculum and faculty development projects.

Endowed Faculty Position:

Helps support a faculty position (full- or part-time) so NIACC can continue to recruit the very best faculty.

Endowed Library Fund:

Establishes a fund to purchase books, videos, CD-ROMs, etc. for a specific subject area.

Endowed Innovation Fund:

Promotes, encourages, and rewards innovative efforts that develop new processes and creative ways to deliver programs and services less expensively or pave uncharted paths for better learning strategies.

You don’t have to be wealthy to start an endowment!

An endowment donor is a special kind of benefactor––one whose commitment is deep and whose vision is unusually long term; an individual with an understanding and appreciation of NIACC’s purpose and importance.

There are many ways to make a gift that will be within your means. You can even pledge to start a future endowment by making regular contributions over a five-year period until you reach the minimum requirement of $10,000. The majority of significant endowments are created with appreciated assets, not annual income. The Foundation has an information brochure (Ways To Give) that briefly reviews the many ways you can make a gift:

• cash
• antiques, collectibles
• annuities
• securities
• retirement fund
• trusts
• real estate
• life insurance
• will bequest

Many options have tax benefits or even opportunities to produce a stream of personal income. Noncash gifts are usually converted into cash, and the principal is invested and managed.

Which way to give is right for you?

It depends on your personal circumstances. We recommend you visit with a NIACC Foundation staff member or Board member to discuss the College’s areas of greatest need and learn more about your giving options. Then, you will want to consult with your financial and legal advisors before entering into any gift commitment.

How will my endowment fund be invested?

The Foundation uses Payden & Rygel to manage our investments. Payden & Rygel is one of the largest independently-owned global investment and management firms. The NIACC Foundation Board has established an Investment Committee to oversee investment strategies and make recommendations to the Foundation Board. Our investment goals are to preserve the initial gift, maximize the annual return and reinvest in the fund balance to keep pace with inflation.

Endowment Recognition

Endowments are usually named after a donor, after a family business, in memory of a loved one, or to honor someone. Typically when an endowment is created the following recognitions are provided:

• A news release about the endowment is sent to local newspapers.
• An information page (including a photo) is developed to be shared internally and externally.
• An article is included in the Foundation’s annual report.
• The donor’s name is included on our historical giving recognition board outside of the North Iowa Community Auditorium on the NIACC campus.
• If contribution plans include a future gift, your name will be added to the Legacy Society membership list.
• You will be informed annually how the interest is used to benefit students and/or the College.

If you choose, your gift can remain anonymous.

Three Endowment Illustrations

Mr. and Mrs. H, ages 65 and 68, now retired, would like to establish a scholarship endowment in their names. Their ultimate goal is to build their endowment up to $100,000. To reach their goal, they plan to use the following strategies: Take $75,000 of appreciated stock and gift $25,000 to the NIACC Foundation to immediately establish their endowed fund. The other $50,000 will be gifted to the NIACC Foundation to create a charitable gift annuity that will provide income for them during their lifetimes. After their death, the balance of the annuity will go into their endowment fund. In addition, they are bequeathing a small percentage of their estate to the endowment. When fully established, this endowment will provide $5,000 (5 percent of $100,000) for scholarships each year. Their preferences are three $1,000 scholarships for needy students who are preparing to become teachers and two $1,000 scholarships for student athletes.

Mrs. C, has a very successful career as a nurse and is very interested in NIACC’s fine arts program. Her goal is to provide a $500,000 endowment to assure future generations will benefit from NIACC’s fine arts programs. She decided on a two-step plan that should meet her objective. She places $250,000 of appreciated assets in a Charitable Remainder Trust that provides her with income during her lifetime, and names NIACC as the remainder beneficiary. She also purchased a life insurance policy for $250,000 naming NIACC as the owner and beneficiary. When fully established this endowment fund will provide $25,000 (5 percent of $500,000) annually for the fine arts program.

Mr. R, is a NIACC graduate and wants to create an endowed fund to provide general support for NIACC’s agricultural technology department. He farms and plans to deliver 1,000 bushels of beans to his local elevator each fall and deposit them in a NIACC Foundation account. The Foundation will sell the beans immediately, and the cash will be used to establish a named endowment fund honoring his parents. Mr. R has also made estate plans to leave 160 acres to the NIACC Foundation. Once the Foundation owns the land, it will be sold and the proceeds deposited into his parents endowed fund.