How to handle church endowment (looking for best guaranteed return)
I posted this question over on fatwallet this morning, but haven't gotten any responses. I thought you guys might have some ideas.
I was talking with a friend this weekend who works for a small church (which is a tax exempt organization). They received a multi-million dollar gift several years ago, and have been drawing a substantial amount of principal each year to meet their budget. (At this rate the money will be gone in <5 years.)
My friend believes they are only getting a 3% return on this money, which I think is pretty low for this type of deposit. They need access to the money, but shouldn't need more than $200k to be readily accessible. Any ideas on how this could be handled? A 4-5% return would be significantly better.
Anyone have experience with million-dollar endowments? Is it common to use CD ladders, Treasuries, or a mixture of both? Are there options that I may not be familiar with?
|