All too often raising charitable gifts for endowment takes a back seat to support for general operations. Understandably, the pressure is always on to focus on short-term solutions.
But that’s the wrong approach. You’ll always be behind the eight ball if you avoid looking out for long-term solutions. And that’s why it’s imperative that you devote at least 20 percent of your time to raising endowment gifts. Annual interest from a permanent endowment fund is like a lifeline for nonprofit organizations.
There’s a long-held axiom that says “any nonprofit organization should strive to have an endowment in place that’s at least three times the amount of its yearly operations budget.”
So if your general operations budget is $1 million, you minimally need an endowment of $3 million. And with interest rates being as low as they are at this time, a $3 million endowment doesn’t go all that far in providing yearly assistance to support general operations.
So what are you doing to build your endowment? Are you exhausting every possible avenue?
Begin by listing everything you are doing to market endowment gifts, and then add new strategies to it.
Use this list as a starting point:
- Create an endowment committee who, in addition to other responsibilities, is charged with identifying, cultivating and soliciting endowment gifts.
- Hold a yearly special event, the proceeds from which are directed to your endowment.
- Ask all donors who give $1,000 or more on an annual basis to make an endowed gift large enough to ensure their annual support will continue on long after their lifetimes.
- Do regular feature articles in your newsletter or magazine on topics related to various aspects of endowment – profile an endowment donor, talk about the impact of a named endowment fund, etc.
- Get an individual or a foundation to establish a challenge gift aimed at matching those who give to endowment over a specified period of time.
- Publicize any and all named endowment gifts as much as possible when they occur to plant the idea of making a similar gift in the minds of others.
- Ask board members, members of your endowment investment committee and others to help identify and, if possible, accompany you on introductory calls to new prospects.
- Develop a wide-ranging list of endowment fund opportunities that can be shared with likely donors – capital projects, programming needs and personnel positions.
- Get your endowment committee to invite each of your board members to establish a named endowment fund.
- Produce a simple handout that describes endowment gift opportunities and includes a list of existing named endowment funds.
- Establish a women’s giving circle, one of the goals of which is to establish and add to a named endowment fund.
- Announce the launch of endowment campaigns to establish funds in honor of long-time and respected employees of your charity who are retiring or retired.
- Make a board-approved policy regarding realized planned gifts: “All unrestricted bequests in excess of $10,000 will be directed to the endowment.”
- Devote space on your website devoted to endowment topics: Q&A, endowment stats, a list and description of existing named funds and more.
- Make mention of endowment gifts – and their potential impact – during all public functions.
- Get someone from another charity with a sizeable endowment to speak to your board about the impact of their endowment on people and programs.
- Go to donors with existing named endowment funds and invite them to add to their funds with both outright and planned gifts.
- Approach targeted groups to collectively establish named endowment funds: alumni classes, civic organizations, business associates, affinity groups and others.
- Make a board-approved commitment that a certain percentage of every dollar raised will be directed to your organization’s endowment.
- Explore launching an “asset-building” campaign that focuses on endowment only rather than capital projects.
- Be sure that all planned gift prospects continue to be educated about endowment giving – through personal visits, in your planned gifts newsletter and other venues – and invited to make a planned gift directed to your endowment.
- Host a once-a-year event that recognizes all endowment donors and invites other attendees to join in supporting your endowment.
- Approach donors (and their heirs) whose names are attached to any of your campus’ buildings. Invite them to endow the facility’s future maintenance and enhancements.
- Set yearly quantifiable objectives for yourself: To make x face-to-face calls on endowment prospects throughout the year; to solicit x prospects for named endowment gifts throughout the year; etc.
- Identify any foundations that contribute to endowment and submit letters of inquiry.
Recognize that an endowment will help your organization to survive during lean times and thrive during more prosperous times. Focus at least 20 percent of your time on actions – raising funds for endowment – that will ensure your charity’s long-term future.
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