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Building for the Future: Two Ways to Grow Endowment Support

At the community foundation, we’re proud to support so many incredible nonprofit organizations that are working each day to improve lives in our region. One of the most effective ways to ensure your mission continues for generations is by growing your endowment. A strong endowment provides a stable, permanent source of funding—and serves as a powerful message to the community that your organization is built to last.

As you speak with your donors about your vision for the future, you may encounter questions about how endowment giving works. In particular, donors may wonder about the difference between contributing to your organization’s endowment fund at the community foundation versus establishing their own named endowment to benefit your nonprofit.

Here’s how you can explain the distinction—and how both options can play a vital role in securing your long-term sustainability.

Option 1: Building Your Organization’s Endowment Fund

Many nonprofits choose to establish an endowment fund at the community foundation as a way to manage long-term assets efficiently and transparently. These funds are sometimes referred to as “quasi-endowments” because they’re board-directed and typically allow some flexibility for special circumstances, such as emergency withdrawals.

Donors can make contributions directly to this fund, supporting your organization’s overall endowment growth. Additionally, your board of directors may periodically choose to transfer assets into the fund to strengthen its base.

The community foundation manages the investment of the fund, and your organization receives annual distributions based on a percentage of the fund’s market value. This creates a steady income stream that can supplement your annual budget, helping you plan with more confidence year after year.

Option 2: Donor-Established Endowment Funds

In some cases, a donor may wish to establish their own endowment at the community foundation to benefit your organization. This may happen during their lifetime or be set up as a bequest as part of their estate plan.

These funds are typically structured as designated endowment funds, meaning they are permanently restricted, with the principal preserved and only income distributions made to your organization.

The donor may choose to name the fund—perhaps in honor of their family or in memory of a loved one—and can take comfort knowing the community foundation will manage the fund in perpetuity. This offers the donor a lasting legacy while ensuring your organization receives reliable support far into the future.

Strengthening Mission and Stewardship Together

The community foundation is experienced in managing both types of endowment relationships. We handle the investment oversight, accounting, and annual distribution process so your team can focus on mission and donor engagement.

Whether a donor contributes to your organization’s existing endowment fund or establishes a separate named fund, both approaches build your financial foundation and expand your capacity to serve.

We’re here to support you and your donors as you build for tomorrow. Reach out any time to explore how we can help you grow your endowment strategy and ensure long-term impact for the community you serve.