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What is an Endowment?

At its most basic, an endowment is a fund held by a third party that’s usually invested with a pool of similar funds*, with the expectation that the investment will allow each fund to grow over time. A certain percentage of the fund is spent each year in a manner designated by the donor.

How much of the fund available to spend is determined by the third party holder. Typically, in community foundations, it’s around 5%. This is called the “spending policy.”

This means that, when we met our $10,000 endowment goal in December of 2018, the amount disbursed at the end of the following year will be $438 ($500 minus administrative fees). The following year, after the fund accrues interest, 5% will yield more from the fund and more will be disbursed.

This way, The Derby Fund is always growing — it becomes more powerful over time, continuing to provide support for causes that represent Bill and Mary Derby’s values into perpetuity.

The fund is administrated by the Community Foundation for Greater Buffalo. Please consider making a donation today in any amount.