What are endowments and planned giving arrangements?
___An endowment is a fund built up from donations, of which the principal is invested, and the income used for the support of the organization or institution.
___A planned giving arrangement is one in which a donor contributes to an organization or institution, and receives both tax advantages and an income from his donation for a fixed period or his lifetime.
___Planned giving arrangements include:
- Charitable gift annuities.
- Charitable remainder trusts
- Pooled income funds
- Life insurance
Why would you want to secure endowments or planned giving arrangements?
___They’re attractive to donors.
___They’re more likely to get you large donations.
___You can use the good experiences of donors to attract other donors.
___They give you investment opportunities, and the chance to develop a funding base that will continue to grow.
___They can make possible programs or opportunities that you wouldn’t otherwise be able to fund.
___They can give you the long-term financial security that makes long-range planning more than hope.
___They can free you from the restrictions of public and foundation funding.
When should you try to secure endowments or planned giving arrangements?
___When you’ve grown to the point that you have, or can buy, the capacity to invest and administer the funds you want to set up.
___When you have a base of donors and potential donors that can make it worthwhile to set up endowments and planned giving arrangements.
___When you have the capacity – either through volunteers or a development office – to market your program to potential donors.
___When the reputation of your organization or institution is one that will make donors feel that their money is both well spent and well used.
___When your organization has a need for something that requires a large capital investment.
___When funding restrictions from public or private funders make it difficult or impossible to do work that is in the best interests of the community or the society.
___When funding from public and private funders becomes scarce.
How do you secure endowments and planned giving arrangements?
__ Determine whether the arrangement you’re considering is possible for your organization in your community.
__ Set up your financial arrangements.
__ Reach out to and recruit potential donors.
__ Implement your plan:
- Monitor and maintain your systems.
- Cultivate current donors.
- Continue to recruit new donors.
__ Keep at it indefinitely.