Fundraising for Social Change, 7th Edition

chapter 27 Endowment Campaigns

There are two ways to build an endowment. The traditional way, described in Chapter Twenty-Four, involves creating an endowment, with all the policies you need to protect it and invest it properly, and add to it as you can. All legacy gifts are deposited there. In addition, many organizations discipline themselves to put money from their annual budget in the endowment on a regular basis, and they don’t draw anything from the endowment until it reaches a certain size (generally at least $1,000,000). However, there is another way to start or expand an endowment by using a campaign strategy. This strategy is particularly useful when you want to move the endowment principal to a meaningful size.

Organizations with a donor base of very-low-income people need to think twice before launching an endowment. Even if such an effort could be successful, it means the organization will have a kind of financial security that few, if any, of its supporters have. This can exacerbate a danger present in all endowments: a perception on the part of donors that the organization doesn’t need annual gifts and that, in fact, the organization has lost touch with its base. A further danger is that donors will give to the endowment instead of to the annual fund. As the saying goes, you will have robbed Peter to pay Paul.

As with other campaigns, the tasks for launching an endowment campaign include forming a committee of solicitors and compiling a list of prospects. Like ...