I applaud the authors for highlighting the value of endowments. Endowments are sustaining gifts. The metering effect of endowments, disbursing a portion of the endowment’s average earnings year after year, addresses the known risks of attempting to water a garden with a (large gift) firehose. At the same time, the reliability of endowed income allows nonprofits to plan for and grow lasting programs and solutions.
I caution against discounting the value of smaller endowments. Every little bit helps. $5,000 per year might cover the property insurance or the cost of electricity, allowing the nonprofit to shift raised income directly to mission related services. $100,000 per year might cover the cost of a vital program, allowing the nonprofit to offer job security to talented staff.
Donors with concerns about the capacity of nonprofits to manage and invest an endowed gift should have a conversation with their local community foundation. A donor can create a donor designated endowment at a community foundation for the specific benefit of a designated nonprofit. Community foundations are nonprofit organizations with good stewardship as their primary mission, That includes fund and investment management, as well as fidelity to donor intent. Because community foundations are allowed by law to combine endowed gifts for investing and management, they achieve economies of scale that support both competency and cost effectiveness in the stewardship of endowments.
Those large nonprofits that are endowed began as small nonprofits. The difference, they were given the opportunity and funding over a period of years to grow. African American run organizations, as noted, do not receive the same level of support. Our organizations receive pennies on the dollar, and are expected to thrive. And, when one fails it paints a broad brush stroke over similar run organizations.
It is interesting that the rationale for this underfunding is similar to what many businesses use when considering hiring African Americans to leadership positions or to jobs in general.
It’s time to have an honest discussion. As Galileo stated, "all truths are easy to understand once they are discovered; the point is to discover them." I would add and do something about it.
This is an important conversation and one that has been around for quite some time. Black-led organizations have been pushing this idea but don’t have the resources or communications "heft" to get the ideas out into the field. "Want to go fast, go alone; want to go far, go together"...or something like that. I am tired and weary of the fight today.
COMMENTS
BY Jon Bates
ON November 12, 2021 01:31 PM
I applaud the authors for highlighting the value of endowments. Endowments are sustaining gifts. The metering effect of endowments, disbursing a portion of the endowment’s average earnings year after year, addresses the known risks of attempting to water a garden with a (large gift) firehose. At the same time, the reliability of endowed income allows nonprofits to plan for and grow lasting programs and solutions.
I caution against discounting the value of smaller endowments. Every little bit helps. $5,000 per year might cover the property insurance or the cost of electricity, allowing the nonprofit to shift raised income directly to mission related services. $100,000 per year might cover the cost of a vital program, allowing the nonprofit to offer job security to talented staff.
Donors with concerns about the capacity of nonprofits to manage and invest an endowed gift should have a conversation with their local community foundation. A donor can create a donor designated endowment at a community foundation for the specific benefit of a designated nonprofit. Community foundations are nonprofit organizations with good stewardship as their primary mission, That includes fund and investment management, as well as fidelity to donor intent. Because community foundations are allowed by law to combine endowed gifts for investing and management, they achieve economies of scale that support both competency and cost effectiveness in the stewardship of endowments.
BY Zoneice Z. Jones
ON November 17, 2021 07:36 PM
Those large nonprofits that are endowed began as small nonprofits. The difference, they were given the opportunity and funding over a period of years to grow. African American run organizations, as noted, do not receive the same level of support. Our organizations receive pennies on the dollar, and are expected to thrive. And, when one fails it paints a broad brush stroke over similar run organizations.
It is interesting that the rationale for this underfunding is similar to what many businesses use when considering hiring African Americans to leadership positions or to jobs in general.
It’s time to have an honest discussion. As Galileo stated, "all truths are easy to understand once they are discovered; the point is to discover them." I would add and do something about it.
BY Susan Taylor Batten
ON December 1, 2021 01:40 PM
This is an important conversation and one that has been around for quite some time. Black-led organizations have been pushing this idea but don’t have the resources or communications "heft" to get the ideas out into the field. "Want to go fast, go alone; want to go far, go together"...or something like that. I am tired and weary of the fight today.