The Top Four Questions – and Answers – About Endowments

Endowments help a strong organization grow stronger. They provide the most effective strategy for stability. But not every one of your friends and supporters is a great advocate. In fact, some don’t really understand the principle of endowment, what it can achieve, or the need. Here are four questions I hear most often. This may help you with the answers.

Donor: I can invest the money and get a better rate of return than your organization can.

Answer: It’s very possible that you can earn more than our institution. Our responsibility is to invest the funds in a safe and growing endowment. We have some very bright people who help us with our investments. We are committed to investing wisely, and for the long-term. We have been quite successful.

Donor: I’ll just continue giving to you on an ongoing basis each year.

Answer: Your gift to our operations is immensely important to us. We couldn’t provide the service we do without your ongoing support. But a gift to our endowment is a long-term investment. It is your legacy and a commitment of the value you place in our organization. The gift you make to our operations helps us each year. We couldn’t do it without you. But what you give to endowment provides funding and support to those we serve from one generation to the next. It continues giving in perpetuity.

Donor: I’m not certain that I like the idea of endowment. I’ve never been a great fan.

Answer: It’s really not about endowment and it’s not about investing and earning interest. It’s about saving lives (or about funding needy students, or sending kids to camp, or feeding the homeless, and so forth).

Donor: I’m concerned that my funds will not continue to be used for the purpose I intend. I’ve heard about a lot of endowments that change once a different group is in charge or the donor passes away.

Answer: I can understand your concern. Here’s how you can be certain your funds will be used for the stated purpose you wish. When you make the gift, or in your bequest, be quite specific on how you want the funds used. We will work with you in executing an agreement that ensures your funds are used for your stated wishes and purpose. This will make it binding and provide a covenant for their use. You may, by the way, want to add that should the need no longer exist, or if the organization should for any reason go out of business, the funds can be used for your stated purpose by a similar organization.

Books by Jerold Panas (click on the cover for more information)


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