The SMSA Endowment Accumulation Account Rather than waiting to establish a fund sufficient to endow a "Named" Scholarship with assets generally accumulated over your lifetime, consider creating an SMSA Endowment Accumulation Account. The SMSA Endowment Accumulation Account allows you to work with the established fund goal of endowing one scholarship and beginning now to contribute through annual gifts towards its completion. These annual gifts can be made in a variety of ways and be placed in your fund to grow tax free until your goal is reached and your scholarship is endowed. How the Account Works We will assume that in 1970 Builder Chief Donor, age 50, decided he would like to establish the Donor Endowment Fund with the Seabees to provide a $1,250 scholarship adjusted for inflation. Donor contributed $1,500 per year for the next ten years. These contributions were placed in an investment account and all earnings reinvested. During the fifteenth year, the Donor Endowment Fund reached a value sufficient to endow a scholarship. Below is a summary of how Donor's account performed over twenty years. Summary - End of 15 Years Annual Contribution Total Contributions Total Value of Endowment Distribution in 16th Year $1,500 $15,000 $43,925 $2,600* (*$1,250 adjusted for inflation) These examples are based on actual performance of the S&P 500 Fund for the period indicated (for projected years, performance is based on the twenty year average) and is provided for illustrative purposes only. They are not intended to be representations of future performance. Consider Distributing Income Assume Builder Chief Donor elected to have 5% of the fund's income distributed to the SMSA for current scholarship needs with the remainder reinvested to reach the endowment level. Not only would Donor's Endowment Account still reach a value sufficient to endow a scholarship, it would also, during the accumulation period, distribute over $150,000, which is more than ten times the amount invested. Below is a summary of how the account would perform. Summary - End of 44 Years Total Contributions Total Distributions Total Value of Endowment Distribution in 44th Year $15,000 $151,425 $204,700 $10,200* (*$1,250 adjusted for inflation) Benefits: Endowment Accumulation Account® Your contributions will grow tax free within your endowment fund until your target amount is reached. It is your decision whether to contribute more or less in any year. Family members and friends also may contribute to your fund in honor of birthdays, anniversaries, and other special occasions. Income generated as your account grows may be reinvested or distributed to SMSA. The account may sell appreciated assets without being subject to capital gains tax liability. Under current law, donors receive a charitable tax deduction as well as reduced estate tax liability. You have the satisfaction of knowing that your fund will PERPETUATE YOUR GENEROSITY.

Updated: 3/8/2002 Site designed by MELE Associates, Inc.