Endowment Fund Policies

1.  Purpose

The purpose of the Endowment Fund (the “Fund”) of The Living Legacy, Luray (the “Organization”) is to create a stable and perpetual source of income to support the Organization’s mission:

“To enhance the physical, economic, and social landscape of Page County, Virginia by fostering community development initiatives that uplift individuals, families, children, and neighborhoods. Grounded in divine principles, we aim to combat poverty and its effects by offering programs that focus on restoration, recreation, education, and self-sufficiency. Our goal is to build hope, rejuvenate the spirit of togetherness, and empower all members of the community to create a thriving, unified environment where everyone has the opportunity to grow, prosper, and contribute”

This Fund is established as a permanently restricted endowment. The principal shall be maintained in perpetuity, and only investment income (interest, dividends, and a portion of capital gains, as applicable) may be used annually to support general operating expenses.

2.  Governance and Oversight

2.1 Executive Committee Oversight

The Endowment Fund shall be overseen by the Executive Endowment Committee of the Board of Directors. This committee is responsible for:

•  Establishing and reviewing investment policies
• Ensuring alignment with legal and fiduciary standards
• Approving the annual endowment draw amount
• Reporting performance and disbursements to the Board

2.2 Investment Advisor

The Fund shall be managed in partnership with a qualified and established financial advisory organization, selected and reviewed by the Executive Committee. The advisor shall provide:

• Portfolio management services
• Quarterly performance reports
• Strategic recommendations on risk, asset allocation, and rebalancing

3.  Investment Objectives

• Preserve the real (inflation-adjusted) value of the principal
• Generate consistent and sustainable income to support operational needs.
• Achieve a total return (income + capital appreciation) sufficient to support an annual spending rate of 3%–5% of the rolling three-year average of the Fund’s market value.

The Fund shall be diversified across asset classes in accordance with prudent investment principles and the guidelines of the Uniform Prudent Management of Institutional Funds Act (UPMIFA).

4.  Spending Policy

• The Organization may spend up to 5% of the three-year trailing average market value of the Fund annually
• All distributions must be used for day-to-day operational expenses that support the Organization’s mission
• Any excess income beyond the approved draw may be reinvested back into the Fund to preserve and grow its value

4.1  Emergency Use of Principal

The principal shall not be used under any circumstances unless:

• A supermajority vote (75%) of the Board of Directors approves the action, and
• The Organization obtains any required legal approvals or donor consents, as applicable under UPMIFA and IRS regulations

5.  Donor-Restricted Sub-Funds

Donors may contribute to the Endowment Fund with or without restrictions. Gifts with restrictions must:

• Be documented in writing (e.g., gift agreement or letter).
• Be honored in accordance with the donor’s intent and UPMIFA
• Be segregated and tracked separately within the Fund accounting system

6.  Reporting and Transparency

• The Executive Endowment Committee shall report annually to the Board of Directors on the performance of the Endowment Fund
• A summary report shall be made available to stakeholders, including donors, in the Organization’s annual report or impact statement
• Independent audits shall include a review of endowment fund transactions and adherence to this policy

7.   Amendments

This policy may be amended by a majority vote of the Board of Directors, provided that such changes remain in compliance with donor intent, applicable laws, and ethical standards.