Start Solidifying Your Nonprofit’s Future

I’m not here to sell you on why your nonprofit needs an endowment. I won’t get into how it saved organizations during the last recession or COVID, or how boomers are leaving trillions of dollars to organizations—right now, at this very moment. Instead, I’m going to offer practical tips on how to build these crucial funds.

I’ll briefly mention that the larger your endowment, the more it can help offset rising operational costs, but that’s all I’ll say on the subject. And trust me, it’s hard not to talk about how you can borrow against it or open a quasi-endowment for more flexibility. But for now, let’s focus on how you can raise more for your endowment.

If your nonprofit is under 10 years old and you don’t foresee being around forever, this article may not be for you. But hey, read it anyway—it might help you in the future (and give me more views). For everyone else, step one is a review. What’s your current annual fundraising strategy? If you don’t have a solid plan, it’s time to reach out to me or another consultant.

Once you have your annual plan, start integrating endowment-building into your communications. If year-end fundraising is your focus, consider crafting a few messages during the slower months on the benefits of endowment gifts and how simple it can be for donors to contribute.

The next step is to build a committee. Get together a group of committed volunteers and staff. A diverse group of volunteers is ideal, especially if some of them are estate planning professionals. They’ll be invaluable with policies, procedures, and providing guidance to your donors on what types of gifts to make and how to make them.

You’ll also need to create some documents right away. This includes key policy documents like:

• Gift acceptance policies

• Spending policies

• Investment policies

• Other guidelines (like how your endowment committee is structured)

  
  

You don’t need to break the bank on marketing at this stage, but once these details are in place, it’s time to create a Letter of Intent. This is a simple form where donors outline their commitment to give. Keep it basic:

1. Name

2. Recognition preferences

3. Gift type

4. Amount or percentage (percentages tend to be larger than fixed dollar amounts)

5. A testimonial—just a few lines on why they are making the gift (this is great for marketing)

   
   

I also recommend creating a one-pager that highlights the benefits of legacy gifts and outlines some of the most common ways donors can contribute, like through retirement accounts, life insurance, or appreciated stock. Be sure to include a disclaimer like: “This is for informational purposes only. Please consult with your professional advisors and family to determine the best type of gift.”

Tell Donor Stories

As you start to get a few gifts, tell donor stories! Highlight any individual or family that allows you to! This is VERY important. And it should not be only the largest gifts. It should be any gift. You want people to understand that almost anyone can make a difference. You don’t have to create a legacy society, but it can’t hurt. Anyone who makes an endowment gift is in the society, and you mention their names:

1. On impact reports

2. Annual meetings

3. Special events

4. Social media (if they’re okay with it)

5. Publications/emails at least annually, preferably quarterly

Prospecting: Start with Loyalty

When it comes to identifying prospects for your endowment, don’t start with the biggest donors. Start with the most loyal ones. These are the donors who have supported your mission year after year—whether through small or large gifts. Loyalty is a strong indicator of future commitment. They already believe in your cause and are more likely to make a legacy gift than someone who may not have been consistently engaged.

Focus on building relationships and making it easy for loyal donors to consider giving through their estate plans. Begin by talking to those who have already shown a passion for your mission, and work from there. They’ll be the ones who not only contribute to your endowment but also encourage others to do the same.

Board Engagement: 100% Participation

It would really be nice to get 100% board participation at the start. Emphasize with your board that the amount isn’t as important as participating. They need to understand the importance of endowments. Once they’re on board, it will be much easier to sell the idea to your other donors.

Start with the Basics, Grow Over Time

Building an endowment is a marathon, not a sprint. Start with simple steps and be patient. The more you integrate endowment giving into your organization’s culture, the easier it will become. But remember, consistency is key. Regular messaging, a focus on loyal donors, and building relationships are your best tools.

This Is Just the Beginning

This is just the beginning. The road to building a successful endowment takes time, but with the right steps in place, you’ll be on your way to creating long-term financial sustainability for your nonprofit.

If you have questions or want more details, please reach out.