North Carolina's nonprofit sector is vital to building and sustaining equitable and thriving communities. Supporting the state’s nonprofit organizations is the North Carolina Center for Nonprofits, which has a mission of advocating, educating and connecting the state’s nonprofit organizations.
In spring of 2021, the Center established an endowment with the North Carolina Community Foundation to sustain its work going forward. Through agency endowments at NCCF, North Carolina charitable organizations can create funds that support their operations and programs in perpetuity. More than 300 North Carolina nonprofit organizations have agency endowments at NCCF.
The Center chose NCCF as its endowment partner in part because of the alignment of mission and commitment to serving the entire state.
Below the Center’s leadership discuss their work and how their agency fund with NCCF will help them support nonprofits throughout North Carolina well into the future.
Tell us about your organization.
Jeanne Tedrow, President and CEO: The NC Center for Nonprofits was founded by Jane Kendall in 1990. Through her work we were formed with a mission of advocating, educating and connecting nonprofit organizations. We really look at the nonprofit sector as a means of helping to build thriving economies in North Carolina. The nonprofit sector creates one in 10 private-sector jobs in the state and has a $51.2 billion economic impact.
Rob Maddrey, Chief Sustainability Officer: We have 1,100 members and have representation among all types of sectors. Our members pay dues on a graduated scale and 75% of our members have budgets under $1 million, so we feel good about the support we provide those organizations and the diversity of our nonprofits.
Why is this work important?
JT: When you look at communities across the state and where economic development occurs, there’s usually a correlation with economic development and nonprofits. Where there’s shallow nonprofit infrastructure, there’s lower economic vitality. We can look to the nonprofit sector as a partner to build the economy and we are helping to build that infrastructure.
Why did you decide to create an agency endowment with NCCF?
Tracy Careyette, Chief Finance and Operations Officer: The center’s endowment was created in 2008. It was largely invested in CDs and money markets – wherever we could get the best interest rates. At the recommendation of our board, we began to look at this strategy more closely and explore investment options that would grow the fund a little bit more.
We created a taskforce to research our options and decided an agency fund would make the most sense. We sent a request for proposals (RFP) to several entities to find the best fit to help us grow the fund. NCCF was a good fit because it is also statewide and allows us to continue our reach across the state.
With our agency endowment at NCCF, we’ve seen that it’s grown at a rate in the last six to nine months that likely wasn’t feasible under our previous investment options.
What are your goals for the endowment and for the future of the fund?
JT: It’s critical for nonprofits to have sustainability, reserves and financial strength, and we want to model the importance of having a good financial portfolio. When I began in nonprofits having an agency endowment was looked upon as frivolous. Now it is seen as an opportunity to build sustainability, and our funders can say we we’ve been practical and sensible in how we manage our finances.
RM: Our goal is for the money to grow and then determine the best course of action in the next two to five years. It’s about growing that fund to strengthen our annual operations.
TC: It’s also about being able to plan for sustainability. There are ups and downs in the lifecycle of any nonprofit. This helps us plan for the times when things are challenging so we can continue to serve nonprofits.
What would you tell other organizations that may be considering endowments?
JT: Building a sustainable organization requires many tools in the toolbox. This is one of the tools that should be considered right from the outset. Inch-by-inch is a cinch, but yard-by-yard it’s really hard. Growing the financial strength of an organization is not something that happens overnight. You must have a diversified, balanced portfolio. If the organization is going to be around over time, use the time to build something sustainable. However you begin it, just begin!
Many years ago, the general advice to nonprofits was that funders wouldn’t provide additional donations if you have too much money in your account, so nonprofits lived hand-to-mouth. Thankfully the philanthropic world has grown in its wisdom and experience and has changed to encourage organizations to strengthen their financial portfolio.
The funding for our agency endowment fund was modest. What NCCF provides is an opportunity for a monetized endowment within a full investment pool, and NCCF understands nonprofits. That level of service and understanding is crucial for us, and this helps us get beyond basic investment models.
If a nonprofit has some amount of funding and is able to create an agency endowment, they should. You don’t have to be a big dog nonprofit to have an endowment. People would be surprised to learn that an agency fund is within reach and how even a modest endowment is a great starting point. Ten years later your board will be wowed!