Definition: Endowment, specifically, is a gift of money or income producing property to an organization for general operating support or a specific purpose (such as research or scholarships). Generally, the endowed asset is kept intact and only the interest or earnings generated by it is consumed – 5% annually. An endowment campaign is a specialized initiative that is focused on raising funds to build security and diversify income for a nonprofit.1
Importance: Just as you plan for your future by investing in retirement, nonprofit organizations need to diversify income and reduce dependency. By establishing an endowment, an organization is safe guarding itself from market crashes and donor retention.
Involvement: If the organization you work for is embarking on an endowment campaign or has one established you may be tasked with helping find the right prospects in your database and preparing documents for donors and prospects. This should include anyone who has a strong connection the organization and are invested in seeing it continue into the future. Documents may include information on the endowment fund – where it is being held, what the restrictions are, how much interest it accrues and how much of that interest your organization spends, etc. If an endowment gift is in a will or bequest you may need to provide the donor with a specific type of pledge card or other paperwork. Additionally, you may need to store any paperwork the donor gives you securely in your database or on your server. Having an endowment campaign should also be listed on fundraising materials and on your website. Some donors appreciate that an organization is thinking ahead and planning for the future. This could be just the right opportunity to bring your donor to the next level of giving.