Why Your Organization Needs an Endowment & How to Get Started

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1 Why Your Organization Needs an Endowment & How to Get Started SUSIE AKERS, CFRE Executive Director Meals on Wheels of Amarillo, TX (806) Office; (806) Cell

2 What is an Endowment? An Endowment is a permanent fund that is restricted and invested. Only the interest from the fund can be spent, not the principal or corpus that anchors the endowment. Why Your Organization Needs an Endowment Helps your organization survive in lean times and thrive during prosperous times Ensures that your organization continues doing good for many years to come Unrestricted Income to use as needed

3 Benefits of an Endowment Important to Diversify your income sources and reduce vulnerability during economic crisis Provides Sustainability, Financial Security, Freedom and Options Endowments are Not Rainy Day Funds Don t cannibalize your annual giving campaign Goal should be at least three times your annual operating budget

4 Successful Endowments Mature Planned Giving Program Planned Gifts, Bequests, Stocks, Real Estate, Commodities, Mineral Rights, IRA s, Life Insurance Policies, etc. Invest at least 20% of your time raising endowment gifts to ensure future success Focus on five, six, and seven figure gifts Why Donors want to Fund Endowments Donors care more than ever about helping their favorite organizations become sustainable well into the future Endowment funds impress donors, especially generous donors Endowment donors want to leave a legacy and provide for the long-term future of your organization They already LOVE your mission

5 Examine your Database Prospect for High Net Worth Donors Relationships are the key and it takes time this is not a quick fix to financial stability How Do You Get Started? Sell your board on the value of an endowment Build a persuasive case for support of your endowment Make building an endowment a priority Establish an endowment committee Educate your entire constituency about the value of an endowment to your organizations future

6 Getting Started Set-up a Planned Giving Program Bequests are a great way to begin an endowment Incorporate quantitative goals and objectives into your annual fundraising plan Put Information on your website Develop marketing materials for face-to-face meetings Resources Needed Must have Board approved policies investment & spending Work closely with your accountant and attorney Hire Professional investment firms/money managers to invest and manage funds

7 What if How much of your income comes from government programs fundraisers planned giving clients fees? How many staff does it take to administer all of your government programs to maintain funding? How many staff are dedicated to Development or Fundraising? Huge Opportunities Ahead Don t Miss Out Massive transfer of wealth as Baby Boomers retire at a rate of 10,000 per day Experts say they will pass on $30 trillion over the next years Smart charities plan to capture that wealth transfer thru bequests and planned giving There s no time like the present to start

8 Success Stories Building Relationships are vital for success When a donor tells you they have put your organization in their will they have elevated you to family treat them like family Donors can always change their wills Keep donors educated and involved Questions???

9 References How and Why to Make Endowment Fundraising a Priority for Your Nonprofit How to Get Donors to Give to Your Endowment Fund How to Start an Endowment for Your Nonprofit By Scott C. Stevenson Stevenson, Inc. Should Your Nonprofit Build an Endowment? By Mark Hager Successful Endowment Fundraising What Motivates Endowment Donors to Give? By Joe Garecht Endowment Building and Management By Andrea Berry From Theory to Practice: Three Successful Models to Build Endowment By Kathryn W. Miree