Creating a long-term investment pool to provide ongoing support for the future of your nonprofit.
The Benefits of Starting an Endowment
Generally speaking, an endowment is an investment fund created to support the long-term needs of an organization. As the endowment grows, the investment proceeds can be used to fund a nonprofit’s mission for the coming years and decades.
There are many benefits to establishing an endowment. It marks a key stage in the life cycle of your organization, extending your ability to serve others and achieve your mission. It can also signal to your donors and community that your nonprofit is financially stable and fiscally responsible, that your board is engaged and that you are working to meet current needs while also ensuring your long-term viability.
In addition to communicating to stakeholders inside and outside your organization that you are thinking strategically about the future, here are five potential benefits.
- Reliable Revenue. Having an investment that can generate a reliable revenue stream year after year lets your organization go beyond the usual sources of revenue—including annual fundraising—in deciding how to fund current and future needs.
- New Avenues for Donor Support. An endowment fund gives your most dependable supporters a new, lasting way of committing themselves to your mission.
- A Lifeline During a Downturn. An endowment can support an organization during economic slumps and other times when your finances may be stretched thin.
- Lasting Support. Knowing that this source of support extends in perpetuity can help your supporters understand that you’ll be able to achieve your mission for decades to come.
- Expansion Opportunities. Because an endowment is designed to grow over time, your organization may be able to go beyond maintaining the status quo and expand your mission.
Where to Start?
If you are new to endowments, you may be wondering how to get started. What does is take to launch an endowment? How do you fund it? And who should be involved in the process?
To find the answers to these questions, read our new article “Starting an Endowment: Where to Begin?” by Marcie Braswell, Director of Endowments and Foundations, and Karen Parsons, Relationship Consultant, Endowments and Foundations, Regions Bank.
Download full article here.
If you would like additional guidance for starting an endowment for your organization, visit regions.com/investmentleadership.
