Give to Endowment
Support a favorite nonprofit by making a donation to their endowment with the Community Foundation.
Give to Endowment
What is an Endowment?
An endowment is a fund that is invested to provide long-term support for a particular nonprofit organization or cause in perpetuity. A portion of the fund is made available annually while the remaining assets are retained in the fund to provide for growth over time.
The Importance of Endowment
Endowment funds provide a source of ongoing annual financial support to address charitable causes. This source of funding can be invaluable in uncertain economic times when other support may no longer be available. During stronger economic periods, an endowment can provide funding to expand support and act as seed money for the development of new programs and services.
Endowment also provides intangible benefits. Giving to an agency’s endowment creates the opportunity for donors to leave a lasting legacy of support. A nonprofit organization with an endowment is sending a message to its donors that the organization will be here fulfilling its mission for decades to come. An endowment can also provide financial security to those organizations taking on new challenges and seizing new opportunities as they arise.
Friends of the Rouge Interview
Friends of the Rouge on why they chose to start an endowment with the Community Foundation for Southeast Michigan.
“What better way to signal your longevity than to start an endowment?”
Lara Edwards, Friends of the River Rouge
Why Build Endowment with the Community Foundation?
It’s our mission! The Community Foundation exists to create a permanent source of community capital benefiting the residents of southeast Michigan in perpetuity. Nonprofit agencies that build endowment with us benefit from:
- Reduced overhead and administrative costs. The Community Foundation handles all gift processing, record keeping, tax reporting, administrative services and audits.
- Professional investment management of the endowment, overseen by our Investment Committee and consultants.
- Reduced investment management costs made possible by leveraging the collective resources of the Community Foundation’s more than $900 million endowment portfolio.
- Competitive investment and administrative fees through economies of scale, due to the size and breadth of the Community Foundation.
Visibility of your endowment in our Annual Yearbook, social media, and through customized ads for your organization.
- The ability to provide special recognition for donors who wish to create a named fund for your nonprofit.
Acceptance of various gift types including cash, marketable securities, real estate, privately held business interests, insurance policies and other complex assets.
- Technical assistance with major and planned gifts that benefit the endowment.
Support with major and planned gifts supporting the endowment including charitable gift annuities and split interest trusts.
How Endowment Increases Donor Satisfaction
Donors give to organizations that they trust will maximize their gifts to further their mission and create permanent positive change. The Community Foundation’s endowment strategies help nonprofit organizations deliver on these points by:
- Leveraging an expert volunteer committee and professional investment counsel to ensure sustainable fund growth through investment strategies.
- Providing an annual Community Foundation investment briefing for agencies and donors.
- Assisting nonprofits with planned giving strategies for their donors.
- Supporting a donor’s professional advisor to facilitate gift planning.
How the Endowment is Managed
The Community Foundation is responsible for the administration of the endowment – which frees the nonprofit agency from the costs and hassles of gift processing, investment and takeout administration, and other record keeping. Here’s how it works:
- Annual distributions are made by the Community Foundation from the endowment to the nonprofit agency; these distributions are generally made in May.
- The distribution rate, set annually by the Community Foundation Board of Trustees, is a percentage of the trailing twelve calendar quarter average of the endowment as determined each June 30.
- The agency’s endowment fund receives its share of the investment return of the Community Foundation’s endowment investment pool which is designed to grow over time.
- Contributions to the agency’s fund will support the organization in perpetuity – or, in the event the organization ceases to exist or loses its tax-exempt status, the fund will support nonprofits with similar missions. This assures donors that the fund’s purpose and their charitable intent will be carried out in perpetuity.
- Assets and gifts contributed to the endowment become permanent assets of the Community Foundation though their use is dedicated to support the nonprofit organization.
- The Community Foundation collects a fee from the endowment that covers all administration and investment expenses. Earnings for endowment funds are shared with agencies net of fees.
- The Community Foundation guides nonprofits on best practices for marketing and fundraising for the endowed fund.