How To Establish “Named” Endowments

A well-funded endowment is the goal for most non-profit organizations; it is a fund that produces income. Planned giving is established to perpetuate the organization's vision and mission as well as the donors' values. Generally, the non-profit organization uses the earnings from the endowment's principle for general operations. An endowment is not restricted to non-profits alone; it can be extended to any kind of organization to secure its future. The principle is protected and is invested for eternity. Endowment funds are crucial to an organization, since they provide long term viability and promote financial health. Here are suggested tips to establish named endowments -

1. The first and foremost consideration - who will manage the endowment and where it will be housed - needs to be established. It could either be housed at a community foundation, a trust, and local bank or at a house. While finalizing on the person to manage the investment, ensure you pick an experienced money manager. In addition to which, a small committee can be created to oversee, monitor and evaluate the investments.
2. A detailed documented investment policy that is secure in all ways and promotes constant growth of funds has to be laid down.  Run them past subject matter experts for guidance and different perspectives.
3. Establish a clear and concise Gift Acceptance Policy that will determine under what circumstances you will or will not accept gifts.
4. “Any publicity is good publicity”. Seize the opportunity to establish your legacy and to carry out your values and vision. Get people to know and understand that such planned giving and endowments are much needed. Use maximum modes to market endowment funds through newsletters, websites, brochures, and even in the form of thank-you letters to donors.
5. One of the best ways to increase an endowment is by concentrating on the donors who give consistently. Target your consistent donors, not the major donors for endowments, since consistency is what matters to a large extent in building the endowment funds.
6. Find a lawyer who can help you set up the legal wording and documents, but taking a detailed class on how the endowment funds, trusts and the end-to-end process works is imperative to the person or board handling the establishment too.
7. Having a strong leadership representation in the form of a CEO or board president is a key requisite for able and efficient governance of the endowment establishment. It is highly recommended to form an endowment committee, which comprises both board and non-board members. This is to get the right blend of people and enable righteous decision making and smooth administration of the establishment.

A “Named” endowment is something that cannot be established overnight. It demands continuous toiling and perseverance. However, get the basics as discussed above right and your ‘named’ endowments will become a source that keeps giving forever!