NONPROFIT ENDOWMENT FUNDS
One of the best ways a nonprofit organization can build a stable financial future is by building a long-term, revenue-producing permanent endowment. Nonprofits do this for a variety of reasons including a community foundations greater sophistication for administering long-term investments and greater assurance that the principal will not be spent by the organization.
The Foundation offers two endowment options for nonprofit organizations:
- “Sustaining” Nonprofit Agency Fund
- Nonprofit Designated Endowment Fund
“Sustaining” Nonprofit Agency endowment is intended for the long term (but not necessarily permanent) support of the nonprofit. Extraordinary distributions may be made to the nonprofit from the fund, if requested by a vote of the nonprofit’s board and approved by the Foundation’s board of trustees. This provides the nonprofit organization access to the endowment in the event of a financial or administrative emergency.
Nonprofit Designated Fund is designed for organizations that intend to maintain assets in perpetuity, while providing annual support for programs and administrative operations. The spending policy provides charities with a maximum amount available for grants each year and is calculated at 4% of the average trailing 20 quarters of the fund’s market value. Unlike a “sustaining” nonprofit agency fund, a Nonprofit Designated Fund can be created by a nonprofit or individual donor to benefit a specific charity or charities. This fund celebrates the donor’s passion for your nonprofit, while providing a perpetual endowment and “forever” source of annual funding to benefit your organization.
Benefits of a Nonprofit Endowment:
- Protect your organization’s endowed resources for future needs.
- Provide annual funding and income, depending on market performance.
- Provide your donors with a way to give complex gifts such as stocks, life insurance or property.
- Demonstrate to donors your commitment to long-range financial planning.
- Increase investment yield, as nonprofit endowments are pooled with other Community Foundation funds to provide maximum return and lower fees.
Benefits of a partnering with the Community Foundation:
- Proven track record of assisting nonprofit organizations with fund management and endowment-building expertise.
- Technical assist in receiving planned gifts to benefit your organization’s endowment.
- Gift processing and administrative services.
- Reduced or eliminated ongoing administrative burdens.
- Annual income in perpetuity – “a forever fund.”
If you would like to learn more about establishing a Nonprofit Endowment Fund for your charity, please contact us at 979.589.4305 or [email protected]
View our nonprofit partners who have turned to us to manage their endowments HERE