For many folks seeking assistance or services, whether it’s day-to-day or in a time of crisis, the cost of resources can deny them access simply because they do NOT have the financial means to pay for them. This has created a need for discounted services, giving birth to thousands of awesome nonprofits that are able to provide these services at an affordable rate.
Most nonprofits that step to the plate to meet these needs, however, are dependent on the eb and flow of the annual giving patterns of their supporters. Some years there is plenty and other years they wonder if they will have to close their doors. Not because their supporters don’t care about what they do, but because their donor base may have experienced a decline in income and thus their giving. Or after decades of faithful support they have transitioned to retirement and are forced to stop donating all together.
So how does a nonprofit offset the ups and downs of annual contributions? The answer: Endowment Funding.
Here’s an example:
Steve and Doris currently support Changing Lives Forever (CLF) with a monthly contribution (Names and Charity are fictitious). Having just turned 62 the reality sunk in that there is going to come a time when they will no longer be able to give. Steve and Doris wanted to know if there was a way to change that, so they contacted CLF. The executive director introduced them to The Foundation who had them go through a preliminary online interview. When the interview was completed, The Foundation scheduled a face-to-face meeting with a representative at their home. It was there that the couple learned about all the various options available to them. By the time the meeting concluded Steve and Doris had a plan that would allow them to not only continue their annual support of CLF for decades to come regardless of their income, but would also create retirement income and leave an inheritance for their family members as well.
It is important to note that endowment giving CANNOT replace annual giving. A nonprofit needs both. What a financial supporter needs to do is establish a giving strategy that includes both. That is where a foundation comes in. We function in an advisory capacity to help donors create a giving plan that meets the needs of the nonprofit they support and their desires as a donor.
So how do I get started with a giving strategy that includes endowment funding?
Contact your charity and ask to meet with a representative from their foundation partner. If they don’t have one, contact us and we will be happy to get you and your charity on the way toward growing financial stability for decades to come.