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.