Endowment Fund

Focused on fostering spiritual growth and a spirit of servanthood in students, families, and faculty. Support areas include funding for Spiritual Retreats, Spiritual Emphasis Week, Christian art and scripture displays on campus, a Christian Speaker’s fund, community service initiatives, and missions exploration.

Annually sustain and improve CAK buildings and grounds by funding major and minor campus improvements and repairs beyond what the school’s general operations can provide. This mission will free up more CAK operation funds for learning, spiritual, and extracurricular programs that further the school’s total mission.

Annually improve the quality of teacher professionalism and life by supplementing CAK teacher salaries, benefits, and/or professional improvement beyond what the school's general operations can provide.

Support the total program of CAK.

Support deserving children and families attending CAK who could not otherwise attend for financial reasons. 

Home Federal Bank works to manage the endowment sustainably so that it can provide capital to support the long-term goals of Christian Academy of Knoxville. 

Once the endowment reaches $10 million, a portion of the endowment will be paid out as an annual distribution to support CAK’s budget, while any appreciation in excess of this annual distribution is retained in the endowment so it can grow and support future generations. As a result, the endowment can continue to bless students in perpetuity in specific areas designated by you, the donor, or if the gift is undesignated, the Board of Trustees will determine the most needed project. The current policy allows for the annual distribution of 4% of the fund.

CAK’s spending practice has to balance two competing goals: the need to fund the operating budget with a stable and predictable distribution and the obligation to maintain the long-term value of endowment assets after accounting for inflation.

CAK determines the annual endowment distribution after considering various factors, including guidance from a payout formula that provides a steady stream of income to support current needs while preserving the endowment’s future purchasing power. This process is similar to that of many other independent schools and universities.

As a general rule, CAK targets a maximum annual endowment payout rate of 4.0 percent of market value based on a three-year rolling average.

The utilization of a payout formula means that the annual payout rate is generally lower following years of relatively high investment returns and higher following years of lower investment returns. Adjustments can be made in succeeding years, keeping in mind the long-term payout goals of balancing budgetary stability with the preservation of the endowment’s purchasing power. Each year the CAK Board of Trustees approves the final distribution amount. 

Returns from the endowment foster Tuition Assistance, Christian Life enrichment programs, Teacher and Student Excellence projects, Academic Support, as well as provide for campus Facility Care and sustainability.

However, there is a common misconception that endowments, including CAK's, can be accessed like bank accounts, used for anything at any time as long as funds are available. In reality, CAK’s flexibility in spending from the endowment is limited by the fact that it must be maintained in perpetuity and that it is largely restricted (some permanently, some temporarily).

Endowment gifts are intended by their donors to benefit both current and future generations of students.  As a result, CAK is obligated to preserve the purchasing power of these gifts by spending only a small fraction of their value each year. Spending significantly more than that over time, for whatever reason, would privilege the present over the future in a manner inconsistent with an endowment’s fundamental purpose of maintaining intergenerational equity.

In addition, many faithful donors designate a specific purpose for their funds. CAK is also blessed by undesignated endowment gifts, leaving the opportunity for CAK to use those funds where they are most needed.

There are three main sources for supporting and growing our endowments: periodical capital campaigns, planned giving, and individual or family gifts. You can make a gift in any amount to support your preference of the already established funds, or you may make an unrestricted gift.

If you are interested in giving to one of the endowment fund's areas, please contact Craig Collier, Director of Development.