10 Tips on Implementing an Endowment Fund

How do you build an endowment fund that will support your organization now and into the future?

First of all, what is an endowment?

A financial endowment is a transfer of money or property donated to an institution, with the stipulation that it be invested, and the principal remain intact. This allows for the donation to have a much greater impact over a long period of time than if it were spent all at once. The process is also known as “planned giving.”

Let’s take an introductory look at some of the reasons people will put you into their planned giving instruments.

  1. “We are lifetime members of your organization.” People who have an already existing relationship with you are more likely to make legacy gifts to your organization.
  2. “We have been giving to you for a number of years” so a bequest makes sense. When you scan your database, don’t look for the “high level” givers but rather the most consistent and routine givers.
  3. “We don’t want the kids to be fighting over the money.” They would rather give to a charity that they know than have their children squabble over the money.
  4. “It is the good and right thing to do, so we just did it.” People like to give because it feels good and it makes an impact in the community.
  5. “I have been a volunteer with this organization and I know the money will be used well.” Look toward your volunteers and other key stakeholders first because they know you and know how the money is used.
  6. “I want to memorialize my name and become immortal.” Some people will look at your organization as a way to carry on their name and family legacy, so give them the opportunity to have their name and values live on in the future.
  7. “We have more value dead than alive.” They can make a really big donation after they pass away than they can at the present time.
  8. “We have made enough money for our kids and family and we want to leave the rest to charity.” Many families have made all the money they need to live and are looking for opportunities to give it away.
  9. “The organization is making a real difference in the community and I want to reward them for their accomplishments.”
  10. “The charity helped my mother when she was alive so I want to help them when I die.”

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