The Power of Endowments

Compass With Needle Pointing Word Vision

An endowment makes a mighty statement.

An endowment sends a motivating message to the world, as well as to your board, staff and donors. It says your organization is going to be here for the long run. You have prepared for and are looking to the future. You have set aside funds that will grow and provide needed mission-directed money for years. You will be here for those you serve.

An endowment delivers to a nonprofit a dependable, predictable source of revenue each year. Organizations with endowments know they will cover at least part of their future financial needs with the investment returns from these endowed funds.

Perhaps it is because of the powerful nature of an endowment, and the statement it creates, that many organizations do not have one. They are afraid establishing an endowment may be too complicated, or that it will be difficult to manage. They believe there must be some mystical energy around endowments only a select few organizations can harness. Sometimes the allure of accepting (and spending) all donations today, tempts organizations with the fleeting comfort that tomorrow will take care of itself. They may believe there is no need to have an endowment.

But organizations that thrive have one thing in common: They have endowments.

This guide will help you consider, create and maintain your endowment so you can join the many organizations that enjoy the fruits of this reliable income source.

Along with future income, endowments provide nonprofits with additional benefits. Donors give more to an organization they trust; one with sound management and an eye toward the future. They give more to all areas, not just to the endowment. And they give because nothing says you will be here tomorrow like an endowment. Donors flock to reliability and predictability.

This guide introduces you to endowments and opens the doorway to all the benefits an endowment will provide. When you establish an endowment, you will notice how enthusiastically your board, staff and donors respond. You will appreciate the many other benefits, especially the future income for your mission. Endowments create a brighter future for your nonprofit.

Authors:

Wayne Olson, JD & Jonathan Gudema, Esq.

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