May 12, 2005 | Read Time: 2 minutes
Nonprofit Essentials: Endowment Building
by Diana S. Newman
Raising money for endowment isn’t often among fund raisers’ highest priorities. More-pressing needs like securing annual gifts, operating membership programs, organizing fund-raising events, and writing grant proposals can squeeze a fund raiser’s time, writes Diana S. Newman, founder of Philanthropic Resource Group, in Columbus, Ohio. But because a strong endowment can save a group from financial hardship during lean times, nonprofit organizations should devote serious consideration to building them, she says.
Her book describes how nonprofit groups can determine if they are ready and able to create an endowment. Groups should ask themselves if their trustees and staff members have the patience for such a long-term process, and whether their organization has a compelling enough mission to generate support well into the future.
Big endowment gifts are usually planned gifts, so fund raisers need to idenity what types of donors make pledges and bequests. Older people with no children who have supported the organization in the past are good candidates, Ms. Newman says. She offers advice on how fund raisers can approach potential donors and maintain relationships with them.
In addition to cultivating relationships with donors, nonprofit groups need to consider how they will invest and manage their endowment. Ms. Newman encourages nonprofit groups to think about whether they want to manage their own assets, set up a separate foundation to do so, or establish an endowment fund at a community foundation. A final chapter describes how to measure donor satisfaction, return on investment, and other gauges of whether endowment building has been a success.
The book also has appendices that include potential questions to ask donors, sample acceptance policies for endowment gifts, and a glossary of endowment-related terms fund raisers need to know.
Publisher: John Wiley & Sons, 111 River Street, Hoboken, N.J. 07030; (877) 762-2974; http://www.wiley.com; 239 pages; $35; ISBN 0-471-67846-5.
