Issues to Consider Before Creating a Nonprofit Fund
An endowment can provide a permanent source of potential income, but typically it takes years to grow an endowment to a significant size. You do not want donors to simply make their annual operating donations to your endowment rather than your annual fund. Therefore, it is important to consider the following before making the decision to establish an endowment fund.
- Does your donor base have the means and interest to contribute to an endowment fund in addition to their regular support through asset-based gifts and planned gifts?
- Do current fundraising efforts sufficiently support your program and operational needs?
- Has your organization developed the kinds of positive donor relationships that may result in major asset-based and planned gifts to your organization?
- Does your organization currently maintain accurate donor records?
- Are key volunteer leadership and staff supportive in this endeavor?
- How will the endowment fund be integrated into your overall development program?
- How will you promote the endowment?