Frequently Asked Questions

Below are answers to commonly asked questions related to endowments and ACEF. If you should have any other questions and/or require additional information, please contact us at acef@acefinvest.org or 212-686-0710.

  • What is an endowment?

    An endowment is an investment vehicle which ensures that an entity  (in this case, a parish) will always receive an income. Although the principal of an endowment is not available to be spent, its beneficiaries receive an annual income distribution.
    Endowments managed by ACEF distribute approximately 4.5% income each year. Any additional income is reinvested, helping allow future distributions to be made even in years when the markets may take a downturn. Over time, as the principal of the endowment increases, so does the income distributed to beneficiaries.
    If a parish entrusts ACEF to invest general funds or a building fund, those investments can be withdrawn at any time, upon 90 days notice. 
    A parish that has its own established endowments can entrust ACEF to invest these funds. Although in such cases, the parish is free to withdraw and move its investments elsewhere, it cannot dissolve these established endowments.
    If an individual establishes an endowment with ACEF, the money in the endowment cannot be withdrawn. As part of a binding legal agreement, this policy applies not only to ACEF, but also to all endowments.

  • What are the rules? Can we take money out if we need it?

    If a parish entrusts ACEF to invest general funds or a building fund, those investments can be withdrawn at any time, upon 90 days notice. Once an individual has established an endowment with ACEF, money cannot be taken out of that endowment. This is not strictly an ACEF rule, but part of a binding legal agreement that applies to all endowments.

    These policies are generally well understood. What causes some confusion is the following: A parish that has its own established endowments can entrust ACEF to invest these funds. In these cases, the parish is free to withdraw its investments and move them elsewhere. The parish cannot, however, dissolve these established endowments.

  • Does the Diocese have access to ACEF endowments?

    No, the Diocese does not have access to ACEF endowments, because ACEF is completely independent of the Diocese. Furthermore, strict regulations and policies ensure that each endowment that is established with ACEF is accounted for separately. The vast majority of ACEF endowments have been established to benefit individual parishes or church-related programs. The remaining one-third have been established to benefit the Diocese.

  • How much of our money does ACEF keep for itself?

    Parishes which have established endowments with ACEF pay a share of the overhead and the salary for one full-time staff person. In addition the parish contributes a small percentage of the fee paid to ACEF’s investment advisors, Bank of America, which does not profit from any trades. Please note that our expenses are approximately 0.6% of the fund’s value and ACEF Board members do not receive any financial compensation for their time or services.

  • ACEF gives us only a 4.5% distribution. Can you do better than that?

    Distributing 4.5% to beneficiaries each year better positions us to buffer investors against years when the financial markets perform poorly. Any additional income earned is reinvested so that your distribution can increase over time.

  • Exactly how does this 4.5% distribution work? What happens if we make 8% or 17% in a year?

    If investments generate more than a 4.5% return, this extra income is reinvested. As the size of the endowment increases over time, so does the total interest income paid to beneficiaries. As mentioned, by limiting distributions to 4.5%, ACEF also ensures that beneficiaries will receive a distribution in years when the financial markets are not doing well.

  • Don’t you need at least $20,000 to start an endowment?

    No, an individual or parish can establish an endowment with ACEF with $5,000. Some parishes will establish an endowment with just $2,000.

  • What if the market value of an endowment falls below its actual original amount because of a prolonged economic recession? Would ACEF still make a distribution?

    Under the law, income may be distributed even when an endowment has fallen below its historical value as long as the ACEF Board, in fulfilling its fiduciary duty, exercises prudence and performs a reasoned analysis guided by applicable statutes. This decision would constitute an exception to the policy that the principal of an endowment is not spent, and it would be invoked only during extraordinary times.

  • We don’t have any idea of how to create an endowment. Where do we start?

    ACEF will advise you on how to set up an endowment properly. We will make sure that the endowment is written to ensure that your wishes will always be honored. This includes anticipating any future changes in the status of your parish or other beneficiary.

  • How does ACEF keep track of our funds? We heard once that parish funds get mixed up with Diocese funds.

    ACEF aggregates individual endowment funds and invests them in a broadly diversified portfolio,however each ACEF fund is accounted for separately. For example, a single parish might have 50 to 100 endowments benefiting itself, but each one is individually tracked and reported on. Further, ACEF investments are subject to a full, independent audit every year, ensuring that each of the hundreds of individual endowments that make up the Armenian Church Endowment Fund is properly managed and documented. This audit and our investment strategies are always available for review, and our annual report is sent to the guardian of each fund every year.

  • Can we add money to an existing fund, or do we have to start a new one?

    Money can be added to an existing endowment fund at any time.

  • How do we begin the process of setting up an endowment?

    A member of ACEF will explain the process to you, provide the necessary ACEF forms, and advise on how to properly set up an endowment, one that ensures your wishes will always be honored. This includes anticipating any future changes in the status of your parish or other beneficiary.