Hello from the community foundation!
It is our pleasure to work with you and so many other nonprofit organizations in our community that are making a huge difference every single day. Whether your organization has already established an endowment fund at the community foundation or you’re considering getting started sometime soon, we are here for you.
Today, we’re sharing insights related to three areas that we know are on many nonprofit leaders’ minds.
–Your donors may understand generally the concept of “endowment,” but they may not be fully aware of their options to support your organization in perpetuity. Learn more about how the community foundation can help you structure a donor’s endowment gift to meet a donor’s goals as well as your organization’s objectives for sustaining its mission.
–“But we say it all the time,” you might think when you see reminders to inform donors about the benefits of giving appreciated stock instead of cash. It may be true that you repeat the message over and over, and that’s precisely what you should be doing.
–Planned giving may seem like that one thing you simply cannot take on in the craziness of today’s fundraising environment and the snowballing of community needs. Don’t let yourself off the hook! Planned giving is crucial to your organization's future success, and the community foundation makes it easier.
Thank you for all you do for the community we love. Our team is here as your first call whenever questions about endowments and planned giving land on your radar. We look forward to helping your organization reach both short-term and long-term fundraising goals!
–Your community foundation team
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Building for the future: Two ways to grow endowments
by Staff Name, Director of Charitable Giving
The community foundation is honored to work with so many wonderful nonprofit organizations in our region that are improving quality of life every single day. We know that it’s important for you to grow endowment assets to create a permanent source of support for your mission.
You’ve likely made it a priority to provide ongoing education and information to your donors to help them understand how your endowment works and why it’s so important to the future of your organization. Occasionally, a donor may ask you about the difference between making a gift to support your endowment, or, in the alternative, establishing a separate endowment fund at the community foundation to support your organization.
Here’s a little background that may help you explain the differences to your donors. In either case, our team can help, so please do reach out.
Building your endowment fund. Many donors will want to support your endowment fund held at the community foundation. Your board of directors may from time to time elect to make transfers from your organization’s assets to the fund. Your organization’s endowment fund is sometimes referred to as “quasi-endowment” because your board of directors has some degree of flexibility to access the principal for certain stated purposes such as emergencies. Annual distributions to supplement your organization’s budget are often made from the endowment fund based on market value percentages.
Donor-established endowment fund. Sometimes, a donor would like to support your organization by establishing a separate and permanent endowment at the community foundation, whether during lifetime or through a bequest. In that case, the board of directors and staff at the community foundation will oversee income payments to your organization and also ensure that the principal stays intact in perpetuity. In many cases, a donor will want to structure an endowment gift as a designated fund to benefit your organization while also leaning on the community foundation for support. The donor can name the fund whatever they’d like (e.g., the Smith Family Endowment Fund).
The community foundation team is experienced at managing the accounting, investment, and distribution aspects of all types of endowment funds. When you work with the community foundation, it’s convenient and rewarding to establish and grow your organization’s endowment, as well as offer donors the option to set up a separate named endowment fund. Both types of gifts help your mission stay strong and improve the quality of life for future generations.
Gifts of appreciated stock: Say it, and say it again
by Staff Name, Director of Charitable Giving
Repeat, repeat, repeat. You may feel like you are constantly talking with your donors about the benefits of giving appreciated stock. Your talk track may go something like this:
–“Before you reach for your checkbook to make a gift to our endowment fund at the community foundation, consider giving highly-appreciated stock.”
–“Appreciated stock is frequently a far more advantageous gift to charity than giving cash.”
–“When you make a gift of shares held for more than one year, you’ll typically be eligible for a charitable deduction at the shares’ fair market value on the date of the gift.”
–“Plus, our endowment fund is a charity and therefore capital gains tax won’t be triggered on the sale of the shares, leaving the full fair market value available to grow our endowment and pave the way for the future success of our mission.”
–“By contrast, if you’d sold the shares yourself and given the proceeds to our endowment fund, you’d owe capital gains tax. This can be a big hit if you’ve held the shares for many years and they’ve got a low basis.”
–“It’s easy to transfer stock to our endowment fund because we work hand-in-hand with the community foundation team.”
You say all of this so much that you’re sick of it, so surely your donors are sick of hearing it too, right? Wrong. Your donors don’t live and breathe charitable giving like those of us who work in the nonprofit sector day in and day out. So, not only is the subject matter sometimes challenging, but it’s also likely that donors are not paying attention most of the time. Indeed, a lot of donors are missing out on the benefits of giving stock instead of cash.
Building your endowment fund, like any type of fundraising, is a long game. You have to keep repeating key messages so that the point finally gets across, often when the timing is just right and the topic of tax planning or charitable giving happens to be on a donor’s mind.
The team at the community foundation is always happy to serve as a sounding board for key messages and strategies to build your endowment, one person and one gift at a time, over and over–and over–again. We’re honored to work with you!
Keep going: Tips to inspire your planned giving efforts
by Staff Name, Director of Charitable Giving
In an environment where immediate community needs are never-ending (and actually seem to be skyrocketing), it’s really hard to carve out energy and time in your fundraising plan to make room for planned giving. We understand! The team at the community foundation knows how crucial it is for our community’s charities to attract as many donor dollars as possible to meet 2025’s mounting demands.
Ignoring a planned giving plan altogether, though, would be a mistake. You’d be sacrificing the long-term longevity of your mission. Intellectually, nonprofit fundraising professionals understand this. It’s just that it seems so hard to do at the moment, in the midst of turbulent times and emotional drain.
Keep your planned giving spirits high by considering the following:
–Donors’ planned gifts, such as bequests, are often significantly larger than annual donations. For instance, the average charitable bequest can range from $37,000 to $78,360, which is substantially higher than typical annual gifts. That’s because donors can make planned gifts from assets they might not be able to part with during their lifetime, such as naming a charity as beneficiary of a retirement plan.
–You may discover that engaging a donor in planned giving conversations actually enhances the donor’s annual giving and campaign giving. This is because you’re engaging a donor through yet another touchpoint, reinforcing that there are multiple ways to align values and beliefs with thoughtful gifts to support your mission and your endowment. Indeed, donors who arrange for a planned gift may increase their annual giving by up to 75% and beyond!
–Keep in mind that planned gifts are often unrestricted. This allows you to allocate the funds where they are most needed and, importantly, grow your endowment.
–Pursuing planned gifts may not be as time-consuming as you think, especially given the return on investment often yielded by a planned gift. For instance, according to at least one study, for every dollar spent on promoting bequests, charities can expect an average return of $56.83, significantly higher than other fundraising methods.
The key is to make it easy. Here’s how:
–Small tweaks to your marketing materials. Try to at least mention the opportunity for planned giving somewhere on each marketing asset. Make sure your website mentions your endowment fund at the community foundation. The same goes for printed materials, one-pagers, email newsletters, and annual appeal letters. Even though you mostly are asking for a current gift, don’t forget to mention that you’re always open to a discussion about endowment gifts through a bequest or beneficiary designation.
–Always mention it, even if briefly. Talk with your major gift donors about the importance of your endowment and operating reserves to the organization’s ability to weather the ups and downs of the market and community needs. Sometimes donors don’t think about the “business” side of nonprofits. Even if your meeting is about something else, you can at least plant seeds.
–Offer real inspiration. If you can, find a current donor who is open to your organization sharing the story of the donor’s intentions to leave a planned gift to your endowment fund in addition to making regular annual gifts. Role models are powerful.
We look forward to working with you to help you grow your endowment! The community foundation is committed to your success. We believe in philanthropy’s ability to improve the quality of life in our region through outstanding nonprofit organizations delivering services to people who need it most. Thank you for all you do.