An Investment in the Future

Amendment 1 seeks to implement modern financial rules on community endowments to ensure they are safe and growing.

If passed, Amendment 1 would allow public endowments to diversify into a broader range of investment options for the purpose of achieving the highest reasonably possible total return over time in a safe and prudent manner.

Amendment 1 allows for not only safer investments, but investments that grow faster. Under current practices, the average annual rate of return is approximately 5 percent. The projected average annual return for the investments under Amendment 1 is 9 percent - almost double. In 20 years, that means a community's endowment fund would have nearly 80 percent more money to put towards local services.

How it Works

Many people are unsure of what exactly community public endowments are. For that reason, we've assembled the following explanation.

Creation

A public endowment is created by funds from charitable gifts to a community or proceeds from the sale of such things as public buildings or land.

It is important to note that these are not tax dollars nor money that is otherwise available for general budget purposes.

Investment

The funds are invested and the interest is spent on public projects. Any unspent earnings are reinvested to ensure that the endowment continues to grow and yield more public benefit.

Currently, the Nebraska Constitution allows community public endowments to only invest in savings accounts and bonds. Investments such as mutual funds are not permitted.

Public Benefit

Annual earnings are spent on specified public projects designed to improve the quality of life in the community.

These projects can be just about anything the community decides on and can include such things as building parks and libraries; the arts; improving health care accessibility; and public education.

Since the funds do not come out of a community's budget, these activities can be performed without raising taxes.