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Section 16. Securing Endowments and Planned Giving Arrangements

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.