First, reflect on how much you would like to have in your endowment ultimately. You may look at the amount of money needed to fund your organization annually. Be sure to consider all the sources of income from fees to donations, to any sales.
At the Black Hills Area Community Foundation, you can start an endowment with a minimum of $10,000. But we suggest cultivating donors over time to gift to your endowment fund to help it grow. Some experts suggest having at least twice the annual operating budget as a minimum endowment, for long-term sustainability.
Raising Money for your Endowment Fund
Explain to potential donors why you are or have set up an endowment. Let your donors know how you plan to use the fund and its annual earnings. Answer any questions in all of your fundraising materials for the endowment, provide them on your website and include them in the content you supply to your volunteers (such as board members) who will “sell” the endowment to prospective donors.
Always be sure to have enough money coming in to support your annual expenses before you fundraise for an endowment. Likewise, it is a good plan to have a “rainy-day” fund that you can tap quickly should unexpected problems arise. An endowment is not a rainy-day fund.
Endowment donors want to leave a legacy and provide for the long-term future of your organization. Set up a planned-giving program to keep up your endowment fundraising. Market it through different materials, events, and a legacy society.
Why You Should Get Started Now
Just like any savings program, starting early works! Even in less-than-ideal economic situations, you start working on building an endowment. Begin now so that you can create a much more stable financial position years down the road.