Please scroll down to see how to calculate periodic withdrawals based on the Constant Rate of Return (CRR recommendation)

Parishioners’ Gifts to Parishes

IMPORTANT NOTIFICATION TO PARTICIPATING PARISHES

Several parishes in the Diocese have asked for assistance in handling stock donations by their parishioners. Parishes without a relationship with a broker can find it difficult to receive and then sell gifted stock. The Board of Managers is happy to assist. The Board of Managers has set up a special brokerage account with Fidelity Investments, the brokers and custodian we use in the management of the Easton Episcopal Fund, to enable parishes to receive gifted securities.

The first step is for each parish wishing to use this service to send a letter to Vice Chair of the Board of Managers, Chris Maxwell, stating that the parish wishes the Diocese to assist in the receipt and liquidation of securities donated to the individual parish. That letter should include the name of the parish, the account at the parish’s bank (i.e. the bank name, account number, and bank routing numbers). An officer of the Vestry should certify that the action was approved by the Vestry and should cite the date of the Vestry meeting when the action was approved. After the Vestry’s approval, the parish should tell interested Donors to deliver the securities to:

Fidelity Investments
DTC #226
For the Benefit of the Diocese of Easton
Fidelity account number: 638-175689
For further credit to ( name of parish )

As soon as the parish is aware that a Donor is sending securities, someone from the parish should contact Chris Maxwell to alert him to be on the lookout for the specific securities being sent into the Fidelity account. Once the securities are in the account, they will be sold as soon as possible. It normally takes three days after the date of sale until the money can be sent to the parish. However, proceeds from the sale of the securities cannot be sent to the receiving parish until the parish informs the Vice Chair of the securities donated and the name of the Donor. The Vice Chair is:

Christopher Maxwell
20561 Rock Hall Avenue
Rock Hall, MD 21661
410-739-0244
wcmaxwell@outlook.com

The Diocese will then send an acknowledgement to the Donor with a copy to the receiving parish.

Calculating Periodic Withdrawals

The Board of Managers periodically recommends a suitable rate of withdrawal from your account based on current and projected returns for the entire fund. Your withdrawal amount, based on the BOM recommended rate or other rate choice for your parish should be based on an average balance over several years to take into account fluctuating investment value. This page outlines the way to make such a calculation based on a 13-quarter average balance.

You need to know your account balance to make this calculation which you may obtain as follows:

• Click the button labeled ‘Account Access’ below.

• Select Easton Episcopal Balanced Fund from the drop-down menu for the first input. The enter your account number and password; you will see a display of your account data required for the calculation.

Each year, after carefully considering the Fund’s past performance while also considering current market conditions and indicators, the Board of Managers makes a recommendation of a prudent annual percentage – called the Constant Rate of Return (CRR) – that a parish can withdraw from its accounts annually. For 2024, the Board’s maximum recommended Constant Rate of Return currently is 5%.

To calculate the Constant Rate of Return for your parish for 2024, find the actual investment balance for each of the 13 quarters prior to and including September 2023, i.e. the investment balance of the quarters ending:

September 30, 2020; December 31, 2020; March 31, 2021; June 30, 2021; September 30, 2021; December 31, 2021; March 31, 2022; June 30, 2022; September 30, 2022; December 31, 2022; March 31, 2023; June 30, 2023; September 30, 2020.

Add all 13 of these quarter-end balances and divide by 13. This will give you the average balance over the prior 13 quarters (a three-year period). Multiply that average by the Constant Rate of Return you seek. (As of the July 18, 2023 meeting, the Board’s recommendation for 2024 is 5%, though some parishes may choose to take less).

This gives you the specific annual distribution you can take from the portfolio. To determine a monthly withdrawal, divide that total by 12. For a quarterly withdrawal, divide that total by 4. Using a September cut-off for your last calculation in determining your withdrawals allows you to input the expected cash flow into your organization’s next annual calendar year budget.