LEAP Organization Assessment

Together We Will Take the LEAP: ENDOWMENT PROGRAM BASICS

The most successful Endowment Programs benefit from multiple streams of passive funding year after year. These include Organization Endowments established directly by the organization and Donor-Established Endowments established by individual donors who name your organization as a beneficiary. Organization endowments allow donors to contribute directly to your fund. Donor-Established Endowments allow donors to name one or more beneficiary organizations or causes and to fund their endowments during their lifetimes and/or after their lifetimes in testamentary provisions through their estates.

Unrestricted endowments (those established by the organization and/or donor- established endowments) provide the most flexibility by allowing future leadership to make decisions about what is most needed. However, restricted endowments may resonate more with donors and meet specific current and future anticipated needs. If a donor is contemplating a restricted endowment, JCF can help you frame a conversation about the best way to structure the restriction so that it will make the greatest impact for your organization in the near term as well as long into the future.

Successful Endowment Programs have policies in place to provide your organization’s leadership and staff with guidance and best practices. Being able to refer to these policies during certain donor conversation help demonstrate the strength of your operations and internal controls.

Gift Acceptance Policy – What types of non-cash gifts will you or will you not accept?
Investment Policy – Regardless of whether your organization’s endowment is held by JCF or elsewhere, do you have an Investment policy that includes fiduciary oversight?
Windfall Policy – How do you strategically use an unexpected gift or other large revenue source to meet both current and long-term needs?

While it is fairly easy to remember to thank donors as gifts are received during their lifetimes, stewarding donors now for gifts they intend to give after their lifetimes can be more challenging. If donors are willing to share their plans for giving after their lifetimes, that is valuable information to track. Stewarding these donors is critical to helping ensure they follow through with their plans. The gifts that donors had planned to give after their lifetimes though endowments can quietly disappear if these donors are not part of your stewardship plan.

Where Are You Now?: CURRENT ENDOWED RESOURCES

Creating an endowment says a lot about your organization. You are committed to success – not just for today, but for generations to come. Identifying your current endowment resources, what they support, and how they contribute to your organization’s financial health will establish a baseline from which to develop the strategies for your Endowment Program.

Your Endowment Leadership: PEOPLE POWER

Depending on the size and structure of your organization, your Endowment Program may be led by staff, volunteers, or a combination of both. Whatever the case, your leadership needs to be fully invested.

It is particularly important for your Board members to support endowment because their backing is often seen as a strong endorsement of the organization’s long-term vision and financial health. Their support can help secure substantial initial contributions and ongoing commitments necessary for building a robust endowment program. Board members’ involvement signals a commitment to prudent governance and fiduciary responsibility, which in turn draws donors to make long-term commitments to your organization and mission.

Strategy and Planning: STRATEGIES FOR DEVELOPING AN ENDOWMENT PROGRAM

All good plans start with a good strategy. Choose a strategy to begin meeting your endowment goals. Remember every organization is different, and you want your approach to balance your needs with your resources. Do you have a donor who might be excited about providing a matching endowment gift? Are you in the middle of a capital campaign? A strategy that fits correctly will keep donors, staff, and leadership enthusiastic.

Fund Later – Many donors choose to fund an endowment after their lifetimes through testamentary provisions in their estate documents. Your organization simply needs to engage your prospects in its mission and share the importance of endowment. JCF can support your efforts by meeting with your donors to facilitate the best way to remember your organization in their plans. This is often the easiest strategy as it doesn’t require donors to give now.

Fund Now – Launch a fundraising effort to raise current funds for your organization’s endowment fund. Various forms of fundraising may be used, such as a matching gift or tying an event to a milestone in your organization.

Combination – Many organizations do both, launching their Endowment Program with a major event or matching grant and then combining it with outreach and education for testamentary gifts on a more individualized level.

Stewarding and Honoring Your Donors: RECOGNITION

One reason donors set up endowment funds is to ensure that their legacies will be remembered in perpetuity. Thanking donors and telling their stories through newsletters, annual reports, and events is an important aspect of your Endowment Program. If you don’t already have one, JCF will gladly help you strategize a recognition program and will also acknowledge your donors through our own communication channels. If you already have methods to honor your donors, JCF can help you brainstorm ideas and activities to strengthen your efforts.