The 4 Essentials of Endowment Building

Thinking about starting an endowment? Or growing the one you’ve got? Make sure you’ve got these 4 essentials in place:

ONE: AN ENDOWMENT STRATEGY

What do you want your endowment to achieve?  The short answer is almost always “sustainability.”  But get more specific.  After all, there are so many options!  Your endowment might provide funds for:

  • General Operations
  • Emergencies or other “rainy day” events
  • Innovations or special opportunities
  • Specific programs such as scholarships or research
  • Maintenance for a building or collection

TWO: A CASE FOR SUPPORT

As with any fundraising program, you need to articulate the value proposition for the donor and invite them to participate.  Your endowment case should include:

  • Vision – How will your organization be different with an endowment? How will your clients be better off because of it?
  • Problem or Opportunity – What are the circumstances or issues that made you decide to establish an endowment?
  • Why you? – Given all the options for investing in charity, why would a donor invest in you and your endowment?
  • Why now? – It can be challenging to make an endowment case urgent. After all, immediate needs are easier to sell than long-term, strategic investments. Put some effort into describing why now is the time to be forward thinking.
  • Credibility – Any case needs to reinforce your organization’s credibility, but in endowment building, the onus is doubled. You have to convince your prospects that you will be around basically forever. Permanence is indicated by things like history, leadership, and vision.
  • Call to Action – What do you want the prospect to do? Provide clear steps for how prospects can support your endowment (leave a gift in their will, make a pledge, transfer stock, etc.).

THREE: PLANNED GIVING CAPACITY

Not all endowment gifts are planned gifts, but many of them are. You’ll want a basic infrastructure in place before you embark on endowment fundraising. This includes:

  • The ability to accept and process bequests and other deferred gifts
  • A planned gift acceptance policy
  • The ability to tap into expertise around different planned giving vehicles
  • Bequest language to include in donor communications materials
  • Recognition of some kind for planned gift donors

Read this earlier Front Range Source blog for more on planned giving readiness.

FOUR: A LOYAL DONOR BASE

Regardless of where you are in your endowment building, you need to retain your donors at every level.  Your most loyal donors will be the ones who  leave you in their will or give to your endowment.  Oftentimes, you don’t even need to ask!  So do whatever it takes to retain your donors. Love them and they will love you back. You can refer to the Leaky Bucket in our Toolbox for more on donor retention.

Endowments aren’t the answer to everything, but they sure do help with a lot! Put these four essentials in place and you’ll be so much closer to achieving a more sustainable future.

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Category: Fundraising General, Planned Giving
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About Ann Goldman
With more than 25 years in the field of fundraising, I've experienced first-hand how to bring people and ideas together to create social solutions and build stronger communities. Fundraising is a joy when you realize you're helping people fulfill their own dreams for a better world. Learn More About Ann...