1. the action of endowing something or someone.
2. an income or form of property given or bequeathed to someone.
Endowments are the Holy Grail for nonprofits. When an organization can build an endowment that produces unrestricted dollars from interest, that nonprofit can get more innovative, maintain growth and maybe even take a deep breathe once in a while and reflect before rushing to the next funding need. Giving to an endowment can make a donor feel invincible, since you can know that money will continue to give to his or her charity of choice for years and years to come.
Before you run off to give your money to your favorite charity’s (Habitat for Humanity, of course) endowment, pause and ask the right questions. It’s important to know how to help in the right ways, so ask these questions:
- Do I want to see the outcome of my gift or am I comfortable that my gift will be used well in a future I may or may not see?
- If I change my gift from an annual to the endowment, how will that effect the charity’s ability to operate?
- Can I support both the growing of an endowment and organization now?
- Can I support the endowment with a one-time large gift or for many years to help it grow?
Hopefully you can support both the needs in your community now and the work in the future. There are innovative ways folks without money now support endowments in the future, while they continue to support immediate needs. Consider adding the charity to your will, taking out a life insurance policy with the charity as the beneficiary, or donating an asset to the charity. With each of these options you could designate the gift to be used for the endowment or immediate needs. No matter if you give now or in the future you are ensuring the success of your charity/ies of choice. Thank you!
Chief Operating Officer