Why an Endowment is Attractive to Donors

by Kirk Walden, Advancement Specialistendowment

Endowments are not only a good idea for our ministries as we look to the future, they are also a strong avenue toward attracting donor interest and support today.

First, endowments allow donors to see their gifts (to the endowment) as more permanent. Knowing that a gift is not going into the ministry account only to be spent within days is attractive to certain donors; especially those who can give major gifts.

Second, simply having an endowment tells our financial partners we are in this for the long haul. This long-term outlook gives us more credibility and lends itself to more gifts.

Third, as an endowment begins funding (even small) portions of the organization, we can communicate this to our donors. They are more likely to respond to our future requests because they see their gifts as funding "bigger" aspects of the ministry.

Finally, keep in mind that endowments are a particular niche for—as we mentioned above—certain donors. They are attracted by the concept of saving for the future, and of a "permanent" fund that keeps their gifts mostly intact—giving those gifts longevity.

As an example, when your author became an executive director I noticed we had almost no memorial or honorarium gifts. To spark interest in this type of giving, we created our "Commemorative Fund" whereby all gifts went into an account where only the interest earned would be used for the ministry.

Immediately, after implementing this idea (and the fact that we placed memorial gifts and gifts in honor of the living on our response devices), these gifts soared. Our fund grew into the tens of thousands of dollars over a few years, after receiving just $25 in the year before changing our approach.

An endowment then, is not only a way to fund the future; it can also be an avenue to reach donors in a new—and for many, a more attractive—way.

Click here for more of this month's Advancement Trends in the Life Community.