Even the word "endowment" isn’t exactly clear to you. You’ve heard the word forever, and you've read about it in lots of chats and blogs. But how to describe easily what it is and what the potential benefits are is kind of foggy.
So, first, the description: How about this: “An endowment is a permanent pool of money that is never spent, but is invested forever, and some portion of the earnings and growth from the investment is used for our operations, programs and projects.”
Second, the benefits: This is probably easy for you. Think about the benefits of having a pool of money you could depend upon year after year. List the top 3 benefits you can think of.
Then there is the question of exactly who needs to be involved in the decisions. Should it start with your staff? With your board? With a donor? How do you even start to think about organizing all these decisions?
The solution to who is involved is simple – everybody. But that doesn’t mean that everybody has more to do. It means that everybody is supportive and excited about the endowment and can talk about those 3 wonderful results … and the definition.
The Fix: You now know the “why” an endowment is important to your nonprofit, the “what” it is – that’s the one sentence definition, and the who, is everybody, but it’s also you, as the person who sees the light and lets everybody know that the time to do it is now.
2 – NO DONORS
Maybe you feel you don’t have the rich donor necessary to build an endowment. You think that endowments are created by one huge gift. Your donors are reliable with annual contributions but you can’t imagine any of them making a huge gift.
The Fix: Nonprofit endowments are built with gifts – in all amounts – from many people. It is not only rich people who can make endowment gifts. Everybody is capable of doing something, at some time, for your endowment.
You actually already have the best endowment donor prospects in the world. Your current donors! Endowment gifts come from people who already know you, love your work, believe in your organization and want you to continue doing it.
3 – NO STAFF
Everybody is already too overworked to add something more to do. And there is no way the operating budget can handle another employee. And managing a volunteer to run an endowment program just seems to require more work for everybody in your organization.
The Fix: I know everybody thinks that you have to have advanced training to work on endowment building. That’s wrong! Every organization, whether a 1 or 2 person shop, or a staff of 20, can start an endowment program with great success. The method is to seek gifts by will from those donors who already support you. It’s a simple message. It’s easy to communicate in what you are already doing. And it’s successful.
4 – TOO EXPENSIVE
You think it will cost money to get special computer programs or pay lawyers to get you started. Then there is the fancy brochures you need to give people. And will you have to have special events for those donors, or give them special gifts? The budget has no line item for that.
The Fix: Successful endowment builders can do it with just a simple wills program. And the best way to do that is to mention that you are building an endowment in everything you do. Newsletters, meetings, activities and every board and committee meeting are the best way to spread the word. And you are already doing many of those. Just add your excitement about the endowment concept and the easy way for people to help you … include your organization in their will.
5 – TOO COMPLICATED
This feeling may come from the idea that endowment building is the same as planned giving. While some endowment gifts are in the form of trusts or other types of planned gifts, many of the largest have been gifts made by will. You can provide the standard legal language to include your organization in a will. And by doing so, you even help people think about making a will if they don’t have one. Remember, success is in the simplicity and ease of making a gift.
The Fix: You already know what’s needed to get started. The “why” an endowment is important to your nonprofit, the “what” it is – that’s the one sentence definition – and the “how” to make a gift to you. And then just be sure you talk about it to everybody, any time and way that you can. Most people don’t need too much detail … it only confuses them.
So, stop procrastinating and get started. The journey of 1000 miles starts with the first step. Happy traveling.