Endowment
If you have a personal IRA, you already know what endowment is - contribute now so it grows and produces income later. Endowments can be used for charity, too!
Here's what different size endowments look like over 25 years:
Please note that endowments really hit their stride around the 25-year mark. That's when the cumulative amount of grants equals the initial deposit.
If your endowment starts at $10,000, around the 25-year mark you still have $10,000 in the fund and you've given grants totaling $10,000.
That's the Magic of Endowment!
As the donor designing the fund, you can choose to have your fund endowed, which means that principle is not spent. Our current endowment distribution policy is 4%, meaning that each year...forever...4% of your fund will be granted out for purposes of your choosing.
With donor advised funds, you choose how to grant the 4% during your lifetime. You can designate successors to make these decisions after your lifetime or tell us your favorite charities and/or purposes and we'll have our Grants Committee make the selections.
With endowed designated funds, we will mail a grant check (totaling 4%) each year...forever...to the one charity you specify when you set up the fund. One and done!
How much to endow? Please see our endowment charts to get an idea of how your endowment might perform over the years, depending on the market.
This is every nonprofit's dream: an operating endowment so that you can stop asking for donations for operations!
We can help you with this by holding and managing an endowment for you here. We pool your endowment with others to get the best, most diverse investments which (should) result in a better return.
Please note: endowments are irrevocable, meaning that your board has chosen to permanently set aside these funds to forever provide a source of income.
Also, agency endowments set up by nonprofits have only a 1% admin fee - which means more money being granted to you each year.
Endowments are a big leap so we're happy to come meet your board of directors first!
A friend told me this story:
Another friend's mother was ill and was spending weeks at a time in the hospital.
That particular hospital kitchen staff came around patient room halls each afternoon with fresh-baked cookies, cold milk, and hot coffee.
True, the patients often didn't get to partake, but in some ways it wasn't for the patients - it was for their families.
Each afternoon the families shared some fellowship in the hall...a short respite to set aside their worries for a bit and re-charge their spirits over cookies and conversation.
So as the friends were talking, the one said how much she appreciated this service of the hospital and while it's a rather small service, she hopes it never goes away due to budget cuts.
"Endow it," said my friend.
What?
"Find out how much the cookie dough costs, then set up an endowment to forever fund the cookie dough. The hospital won't be able to spend it for anything else, even in the deepest budget cuts."
Brilliant!
What's your cookie dough? What do you hope never goes away? Can we help you endow it so that it always remains...regardless of future decisions and budget cuts?
We know things go away...and often there's a good reason such as lack of participants in a program.
But if money is the reason a program, service, staff, or nonprofit goes away, look for a way to endow it.
Baums have endowed the Honors Night at Morris Community High School. Because that fund is here, the Foundation will always send a grant check to MCHS for this program...long after Baums and current MCHS staff have retired or passed on.
Do you hear how universities have an "endowed chair of _____?" We can do that at local schools, too. If you want to make sure a particular subject is always studied, you can endow it.
What about light bulbs? Your favorite charity cannot function without space, electricity, heat, air conditioning, desks, chairs, phones...the list goes on. If you endow one of these items, that's frees up other donor dollars for programs.
Pretty much anything can be endowed. Think about it, talk with your favorite charity, then call us to make it a reality!