Endowment Giving

What kind of message does having an endowment give? I was recently at a development conference and one of the speakers said that an endowment is a message to your donors that you are not funding the solution of a problem; that we should be running our nonprofits with the goal of putting ourselves out of business (i.e. to end homelessness or to cure cancer, etc.).

Creating an endowment gives the message that we will be around for a really long time. Is that the kind of message that we want to send to our donors? I know WorldVision battled this for a really long time, asking, “If we have money that can help starving children right now, how can we sit back and let it collect interest?” Looking at another side of the issue, endowments allow a donor to give a gift that lasts longer and impacts more people than a traditional gift. An endowment would allow an organization like WorldVision to know that they will always be able to help a certain number of children every year. An endowment of $10,000 may only pay out at a good yield of interest $500, but after 20 years the money has not run out in fact after 40 years the endowment would have given away the equivalent of $20,000.

What policies has your organization set regarding endowment funds? How do you view endowment giving? You can make a good case in both directions, where does your organization fall? (1) Our current problems are big enough that we need the money now to make a real difference. (2) We want to provide a long-term impact that can goes beyond the initial gift and endowment.


2 Responses to Endowment Giving

  1. I think organizations, at a certain point in their growth, should consider if building an endowment fund would benefit them. A food bank is concerned with immediate needs and would most likely decide to focus their energies there. A hospital, however, will always be needed so can’t “put themselves out of business” and a dance company shouldn’t; rather they want to be sure they have the funds to share their artistic endeavors and visions for years to come. Also, I don’t think we should kid ourselves — I’d love to eradicate cancer, but I think it’s going to take decades to actually do so and I’m all for supporting organizations with an endowment gift so they can keep up the fight.

  2. […] please leave a comment or send me an email. This is a bit of a follow-up post to yesterday’s Endowment Giving […]

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