The Timothy Group

How Do I Grow My Endowment (Foundation)?

At a CCI Sectional meeting, I asked camp directors at a workshop I was leading on planned giving, how many camps had an endowment fund. Not many did. Roger Camerer of Trout Lake Camp (MN) typified the response when he said, "All our past fund raising efforts have been targeted at current needs." The response confirmed information published by CCI that many camps and conference centers do not have an endowment or foundation today. I predict that in the next few years many camps will begin endowment funds and more will seek to grow their endowment. But how do you do this when there are so many other things that vie for your attention?

You might allocate certain types of current gifts for endowment. Bequest and memorial gifts are logical types of gifts to use for endowment. Both of them are once-in-a-lifetime kinds of gifts and donor family members might reasonably expect that you would do more than consume them in the year in which they become available. In fact, preserving them in this way might encourage family members to subsequently add to the gift to preserve the memory of their loved one.

Other kinds of current funds can also be used to grow your endowment including contributions raised in your annual fund raising appeal. Perhaps you can allocate the proceeds of an existing or a new event, such as a golf outing or banquet, to the endowment. If you do not already use the "membership" method of fund raising you might want to begin a membership program in your foundation. You might want to adopt a Board policy that any maturing bequests or memorial gifts (not otherwise designated) will go into endowment.

There are sources of funds that can be used to grow an endowment, other than contributions. Perhaps you own some land for which you have no future need. Herb Jacobsen of Tuscarora Inn and Conference Center (PA) told me, "the founders of the Center over the years sold excess land to generate the revenue to build new buildings." Proceeds from the sale of future parcels could be converted into a permanent asset in the endowment fund. In this way it would annually generate income for operating or capital purposes. Rather than land being a money consumer (taxes and insurance for instance), its sale proceeds become a resource generator. But be very sure you will never need the land before you sell it, or you might regret it later. As another possibility, you may even be able to add a few dollars to fees charged for services (e.g. $1 per guest per night) that will go into endowment.

For most camps and conference centers it will be the on-going promotion of planned gifts that will hold the greatest potential for endowment growth. If all your fund raising efforts must be allocated to operations, if your capital campaigns saturate your constituent's willingness or ability to give to your organization, planned giving is the best alternative. That is the tact that Herb Jacobsen used. He used the added publicity associated with a capital campaign to send out educational messages about planned giving. He will also allocate some of the time of a new development staff person, paid for by the campaign, to visit with constituents about planned gifts. Herb recognizes that "while the promotion of planned gifts will not likely fund a building addition in the next three years, the return on this investment will show up later as money that can be added to the endowment fund." Because planned giving must be promoted for many years before you will see the response make your endowment grow, the sooner you start the sooner you will see the response.

Can you hope to master this complex area? It doesn't have to be that hard. The most common form of planned gift, and the easiest for you to "manage", is still the bequest. You only have to effectively remind people to include a bequest for your organization. The donors take the action when they write or revise their wills. There is no money to manage or annual reporting (to the donor or to the government) required on your part while the donor is still alive. When the donor dies there is not much you have to do but wait for the check to arrive as the estate is settled. As long it continues to be true that more than half the people die without a will, you have the opportunity to do them a favor by reminding them that they should have wills. Because you did them the favor of reminding the about the importance of estate planning, you have the opportunity to ask them to make a bequest for your organization in the context of that planning.

One of the benefits of planned gifts promotion is that it is not competitive with your other current gift fund raising. You can promote planned gifts to the same people you ask for current support, though truly efficient efforts will target only the most likely of constituents who are planned gifts prospects, for planned gifts promotion.

Promoting planned gifts usually involves a combination of newsletter articles, targeted mailings, educational seminars and one-on-one donor advising. You will probably benefit from having professional advisors from your constituency help you plan and implement your program. By virtue of their involvement, they may even develop a client relationship that might not have otherwise occurred.

If you need to grow your endowment, I urge you to clip this article and put it somewhere that you will remember to discuss it with your development staff, your development committee, your Board Chair or your endowment committee or foundation chair. Remember, these things rarely happen by themselves.