In a pinch? Three Make-A-Will Month messages you can use right now
As you implement strategies to attract gifts to your endowment fund at the community foundation, it’s critical to regularly encourage donors to check their estate plans to be sure they’ve incorporated their intended bequests. Now is an especially good time to get the word out because August is national Make-A-Will Month.
Here are three cut-and-paste messages you can use in your communications with donors, whether those are broad communications such as website pages or one-on-one emails to particular donors.
Money, mortality, and family relationships can be tough for anyone to address head on, and when you combine them, it’s no wonder so many people put off setting up or updating their estate plans. Don’t delay! Reviewing your wills, trusts, and beneficiary designations not only gives you peace of mind, but also lets you explore ways to include a bequest to [ABC Charity]’s endowment fund at the community foundation. Please reach out. We’d love to work with you and your advisors to establish a legacy that will benefit the community for years to come. We’re so grateful for everything you do to help [ABC Charity]’s mission stay strong.
As you work with your attorney and other advisors, be sure to review the beneficiary designations on your insurance policies and retirement plans. Pay close attention to tax-deferred retirement plans such as 401(k)s and IRAs. Typically, you’ll name your spouse as the primary beneficiary of these accounts to provide income following your death and to comply with legal requirements. But as you and your advisors evaluate whom to name as a secondary beneficiary of these tax-deferred accounts, don’t automatically default to naming your children or your revocable trust. You and your advisors may determine that naming [ABC Charity]’s endowment fund at the community foundation is the most tax-efficient, streamlined way to establish a philanthropic legacy. A bequest like this avoids not only estate tax, but also income tax on the retirement plan distributions. Reach out to learn more!
We’ve all heard stories about the sad consequences of someone not having an estate plan, or even having out-of-date beneficiary designations. Estate planning documents, including wills, trusts, and beneficiary designations, often represent generous acts of clear distribution and conflict avoidance for your family and loved ones. An estate plan allows you to demonstrate how much you care about the people in your life as well as your charitable passions. We’d love to work with you and your advisors to include [ABC Charity]’s endowment fund in your estate plan.
As always, please reach out to the team at the community foundation! We are here to help you build your endowment fund. We appreciate the opportunity to work with organizations like yours that are making such a big difference in the quality of life in our community.
Friends and family: Endowment-building thrives on relationships
“You can’t make old friends” isn’t just the title of an album; it’s an important reminder that long-term relationships are the key to successful endowment building. That’s common sense, of course, but sometimes it’s hard to put this principle into action. You’re ready now to grow your endowment fund at the community foundation, and you wish your donors shared your sense of urgency!
There are no silver bullets or magic tricks or secret sauces to make donor relationships grow faster, but it might help to understand how your donors’ emotions factor into decision-making about when–and to what extent–they will make a financial commitment to your endowment.
Along those lines, the team at the community foundation really enjoyed a recent article in the Stanford Social Innovation Review offering suggestions for ways to approach philanthropy so that it is “relational,” including thinking in terms of "we" instead of "us” or “them" and moving away from hierarchical models achieving impact.
As you update your endowment-building plans, consider three ideas inspired by principles of relational philanthropy.
Focus on donor loyalty and trust
Keep an eye toward creating long-term, mutually beneficial relationships with donors. Trust fosters donor loyalty, encouraging recurring and more substantial contributions over time, which is crucial to ultimately securing an endowment gift. To achieve this, you need to understand what benefits the donor is seeking by supporting your organization. Is it recognition? The knowledge that they’re part of something bigger than themselves? Confidence that a problem they’ve personally wrestled with will be solved for others? The donor’s perspective matters.
Inspire donor advocacy
It’s one thing for donors to feel personally connected to your organization. It’s an entirely bigger thing for them to become advocates. When a donor is so dedicated to your mission that they actively encourage their friends and family to also support your organization, you know you’ve got a friend for life. Asking this type of donor for a commitment to your endowment is likely to achieve a high rate of success. Pay close attention to which donors are regularly referring new donors to your organization, whether by offering up prospect names directly or inviting prospects to join the donor’s table at your organization’s annual event.
Know your audience
Large-scale communications platforms such as email campaigns, social media, and your website are important tools in all fundraising activities, including securing endowment gifts. An endowment gift is a big ask, though, so make sure to layer in highly personal outreach to your donors, in addition to general messaging. One-by-one communication across channels allows you to demonstrate your organization’s understanding of donors' individual preferences for their involvement.
As always, please reach out to the community foundation anytime you have questions about best practices for growing your endowment fund. If your organization has not yet established its endowment fund at the community foundation and you’d like to learn more, we’d welcome the opportunity to talk with your team and board of directors. We look forward to continuing to work side-by-side to improve the quality of life in our community through the power of philanthropy.
Speed round: Five fast FAQs about endowments
The word “endowment” can be intimidating, even for the most seasoned fundraising and planned giving professionals–and certainly for donors! But it doesn’t have to be that way. “Endowment” is such an important concept to secure your organization’s future, and it’s worth striving to simplify the basic points for your team and your donors.
Here are answers to five frequently-asked questions about your endowment fund at the community foundation that may help you communicate with your staff, board, and donors. Please copy, paste, edit, and deploy as you wish!
What does “endowment” mean?
“Endowment” refers to a designated pool of assets that are invested (in our organization’s case, by the community foundation) and tracked separately such that a modest portion (usually based on a percentage) of the assets are distributed each year to support our organization’s mission, and the rest of the assets remain invested to grow in perpetuity.
Why is our endowment fund so important to the future of our organization?
The assets set aside in our endowment fund produce an income stream that helps support our mission now and in the decades ahead, allowing us to deliver on our mission consistently over time, especially as needs shift and the fundraising environment ebbs and flows. Plus, the growth of the endowment itself can provide increasing levels of support each year.
How can donors stay involved even after they make an endowment gift?
Our team is happy to keep donors informed about the positive change in the community that is occurring thanks to distributions from the endowment fund. We’re happy to continue to keep a donor’s children and grandchildren informed, too, beyond a donor’s lifetime. In this way, a donor’s legacy continues through the generations.
Who decides how the endowment distributions get used each year?
Our organization’s board of directors reviews endowment income each year as part of a careful budget process. It’s very clear that certain dollars are flowing into the budget from endowment income. Our independent board of directors, together with staff, develops and oversees a budget to meet our organization’s mission for the coming year.
How can a donor make an endowment gift?
A donor certainly may transfer cash to the endowment fund. Even better for tax purposes, a donor can transfer appreciated stock or real estate. A donor can also work with estate planning and financial advisors to structure a bequest to the endowment fund. Our team works with the professionals at the community foundation to help each donor design a gift to achieve both the donor’s tax goals and charitable giving goals. For instance, many advisors highly recommend a bequest through an IRA beneficiary designation because of the multiple tax benefits. Related, if a donor is over 70 ½, making a “Qualified Charitable Distribution” from an IRA directly to our organization’s endowment fund is a very effective charitable planning tool to reduce income tax and, if applicable, also satisfy Required Minimum Distributions.
The community foundation team looks forward to working with you and your donors to establish meaningful endowment gifts that support your organization’s mission for generations to come. Thank you for the opportunity to work together!
This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.