One of the hallmarks of a financially secure independent school is a sizable endowment. An endowment is really just a savings account in which only a small portion of the annual earnings are spent and the principal is never invaded. Someone once compared an endowment to a hen that lays eggs. As long as the farmer takes care of the chicken, then it will continue to lay eggs that can be eaten for the entire life of the chicken. But if the farmer ever decides to kill and eat the chicken, then no more eggs. In the same way, as long as the endowment is preserved and invested wisely, it will always produce some income for a school. But if the principal is spent entirely--for example, to build a new building--then there are no more investment earnings.
Gaston Day School's endowment currently has almost $2 million in principal. The Community Foundation of Gaston County holds and invests these funds for us. While the amount that we receive each year varies according to the performance of our investments, the school normally receives about 4% annually from its endowment--or about $80,000 each year. These endowment dollars come from eight different funds within our total endowment:
* General Endowment
* Scholarship Endowment
* Lineberger Endowment
* Morrow Scholarship
* Ronnie Digh Endowment
* Julie Rankin Fund
* The Pamela Kimbrell Warlick Center Maintenance Fund
The size and purpose of each of these funds vary. The General Endowment, which subsidizes the general operations of the school, has about $917,000. The Pamela Kimbrell Warlick Center Maintenance Fund is the second largest and holds $665,000. Mr. W. Duke Kimbrell and Mrs. Pamela Kimbrell Warlick established this endowment to help maintain the Pamela Kimbrell Visual and Performing Arts Center. Proceeds from this fund, for example, are paying for a new projector that is being installed almost as I write this blog. The Lineberger Fund is the oldest fund at Gaston Day. The Lineberger Foundation created the first endowment at the school when they established this fund. The David Belk Cannon Foundation has made a pledge of $250,000 to our last capital campaign that will create our newest endowed fund.
Since endowments only spend a portion of their earnings, endowment gifts tend to be large in order to make an impact. Smaller gifts made each year are usually spent in their entirety through the annual fund. The average size of an independent day school endowment in the United States is $7 million. So you can see that Gaston Day School's endowment is well below average. Endowment donors often make gifts through their estates. So Gaston Day's endowment will grow in the future as a result of plans that generous, caring individuals have made through their estates.
From my perspective, Gaston Day School's age makes it more and more timely for endowment gifts. The School's 50th Anniversary is less than five years away. This means that our first graduates are soon turning 60 years old, and they will begin to make plans for retirement and the disposition of their estates. Hopefully, more and more individual will recognize what Gaston Day School has meant to them and, out of gratitude, will include the school in their estate settlement. Making a gift to any endowment--whether here at Gaston Day or at another institution--is a statement of profound affection and concern for the long-term well being of that organization. Endowments are forever. And people who give to them are interested in enduring institutions that will exist into the indefinite future.
I hope more and more of us will begin to think about the importance of growing Gaston Day School's endowment. As we approach GDS' 50th Anniversary, it is apparent that the school has staying power and an important, successful educational mission. Gifts to endowment make certain that Gaston Day will always have a strong financial foundation. Please let me know if you or someone you know would like to know more about our school's endowment.