1. A WELL FUNDED ENDOWMENT – Is it a Help or a Hindrance?
By Constance M. Clark
Several weeks ago I had the privilege to present for the planned giving track at the Career Success
Institute held at the Kent State Stark Campus. The event was sponsored by the North Central Ohio
Chapter of AFP. My topic was to lead a lively discussion in not only maintaining, but growing your
endowment during these challenging times. Right before the presentation, a member of the conference
leadership stopped in and said she had one question, “I have a board member who says we don’t want
to develop our endowment because it will convey we don’t need financial support. Therefore, no one
will give us money for our projects. Is this true?”
What a complex question. It appears so straight forward, but within it there are several possible hidden
agendas but, only one short answer. In response to her question, I said, “I believe a strong endowment
base does just the opposite for a nonprofit.” Then I went on to state that I thought her board member
was A. Uninformed about the overall concept of endowment and the role It plays in supporting a
nonprofit during both good and bad times, B. He was unaware that a strong endowment in fact conveys
your nonprofit is a sound investment to foundations and other donors, which actually helps generate
more dollars or, C. He did not want to give personally, and this was his excuse. He may be thinking, “If
we don’t start developing an endowment program, then I won’t be asked to donate.”
Of course, possibility A and B give the opportunity to indeed educate the board member and all other
members of the board about the need and purpose of planned gifts and the establishment of a strong
endowment portfolio. Option C is a bit trickier to deal with.
After my brief response, I opened up her question to the group in attendance. We had individuals from
very small nonprofits with a one person development office and no endowments to a representative
from a local University with 8 staff and funded endowments in excess of $95,000,000.00. The general
consensus was that I was being generous. The odds were on option C.
However, if A or B were the true reason, what can we do about it? And, if it is C, what then? What
follows were my suggestions.
We should all be taking advantage of increased giving opportunities, right now. Making a planned gift
pledge is actually a conservative and very safe way to support an organization when times are tough. In
perceived unstable times, donors tend to view making pledges to planned gifts more favorably than
annual support, knowing a better future is coming for their investments, especially if they are leaving
bequests or planning an annuity.
Almost 50% of bequests are now being made by individuals in their 40s and 50s. We should be
establishing our long-term relationships with these potential donors – now. Boomers are retiring in
huge numbers and they are reworking their wills and estate plans. Waiting until a potential donor hits
that golden window of 70+ as in the past may prove to be too late for your nonprofit. Someone else
may be already visiting to develop relationships for future gift planning.

2. Wisely use this time to go back and review your essential donor services. Investigate new opportunities
for expanding your current donor base while thanking your current donors and bring them up to date on
your activities. Don’t forget to visit your current donors, their lives and circumstances may have
changed and additional gifts may be possible.
Most importantly, in response to the original question, if a board member believes a well funded
endowment hurts your nonprofit-take this time to educate and encourage and engage your board in the
planned giving process. Streamline your planned giving process so it is simple to understand. Focus
should not be solely on dollars since mission must be the larger part of your discussion. Share a story
about why a new donor gave to illustrate the importance of your organization to help remind board
members why they are there and why their participation is important. And regularly report on gift
commitments to keep your board members excited and so they can see progress toward your goals.
If you have a board member who is trying to dodge a personal commitment, then take this opportunity
to strengthen your board and engage the new and current board members actively in the planned giving
process. Educate all new board members beginning with their first day of service about their important
role in the growth of the organization and the sustaining of the organization in years to come.
Invite board members to be partners in your goal setting and endowment program building. Offer them
the opportunity to go along on a visit to a current donor so they will better understand the commitment
others have for your organization. Give them training and opportunities to practice their own personal
stories that they can share when visiting or meeting with potential supporters of your organization when
out in the community. Provide board appropriate training in best practices for donor cultivation and
solicitation and invite them to be part of the most enjoyable part, maintaining donor relations with
those who have already given. If your board members understand what endowment development is
and are actively engaged in what you are trying to do, you will see amazing results.