Let’s get this clear right off the bat… most money that goes into endowment comes from planned gifts. And most of that is in the form of simple bequests rather than complex financial instruments.

If you want to build your organization’s endowment, you should build a planned giving program. That way, down the road in ten, twenty and thirty years from now, your successor will find herself sitting pretty.

If you don’t have a planned giving program, you should! Period!

But there’s more to know when it comes to endowment and capital campaigns.

The 3 Most Often Asked Questions about Endowment

Here are some answers to the questions you are probably asking if you’re heading into a capital campaign.

Question 1: Can we raise endowment money through our capital campaign?

While a straight endowment campaign through which you seek to raise cash gift or pledges for your endowment is going to be a tough sell, there are ways to raise money for your endowment while you are in a capital campaign.

Why is straight endowment a tough sell? Because most donors would prefer to fund more immediate needs than your bank account.

Every once in a while, you’ll find a donor who believes strongly enough in endowments that they’ll give cash to the endowment. But in my experience, that’s rare. It’s much more likely that people will consider a bequest intent in addition to a capital gift. So don’t count on raising lots of cash for your endowment during your campaign.

Question 2: Should our building campaign include endowment?

Even though most donors won’t make cash gifts to your endowment, you should still include endowment as a component of your capital campaign.

Some donors will want to give as generously as they can, but they can’t make a big short-term gift. For them, the possibility of making a planned gift is a great idea. Of course, gifts that may not come in soon won’t help build your building. For that you need cash or short term pledges. But those longer term gifts can count toward your campaign if the campaign goals include endowment.

Some donors may wish to make combined gifts – one portion of the gift made in shorter term pledges and one portion made as a planned gift.

Question 3: How do we set endowment goals in the context of our capital campaign?

Setting an endowment goal for your campaign can be challenging. If donors agree to put your organization in their will, they may or may not identify the specific amount of money they plan to include for you in their wills. And even if they do, who’s to know if the donors’ estate will have anything left to give away, now that more people are living longer.

So knowing how to put a dollar amount next to a planned gift is iffy at best. You can estimate based on averages, but unless donors give current gifts to your endowment, you’ll be guessing.

Here are two ways to address this challenge:

  1. My favorite is to frame your endowment goal around the number of bequests intentions you want to secure during your campaign. With this approach you might have a capital campaign goal of $5,000,000 and an endowment goal of 30 new documented bequest intents. It’s simple, easy to count, and will encourage people to make a dual gift.
  2. The other more common approach is to discount the stated gift intent according to the age of the donor. The older the donor, the smaller the discount. Much has been written about how to determine the value of planned gifts. Here’s just one sample from the National Association of Charitable Gift Planners.

I must confess that this kind of thing makes my eyes glaze over, which is one of the reasons I prefer the simple counting of bequest intents as a campaign goal. It’s not very sophisticated, but it encourages a focus on planned gifts through the campaign.

How are you planning to handle endowment in your capital campaign? Please share your thoughts in the comments below.

1 Comment

  1. Christopher

    Recognition is a key component. In any capital campaign outright cash pledges are key to achieve the campaign goals, but endowment…if only to provide maintenance of the new building…is both helpful and lets donors engage more fully. Even so, recognition for outright gifts and bequests can’t be equivalent, or everyone will take the path of least resistance and make a bequest gift. I totally agree with the strategy of setting a goal for the number of bequests, not a dollar amount and recognize it as a part of the campaign, but again, keeping outright gifts and recognition distinct from bequests is essential so one doesn’t cannibalize the other. Thanks for the most timely article!


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