The North Carolina Community Foundation is honored to work with so many wonderful nonprofit organizations throughout the state. We know it’s important for you to generate gifts today to support your organization’s operations, but have you considered how endowed assets may provide sustainability? 

Endowments create long-term, permanent sources of support for your organization’s mission and programs. Many nonprofits establish agency endowments to protect themselves from decreasing resources caused by economic uncertainty or declines in governmental funding and other revenue streams. 

A donor may ask you about the difference between making a gift to support your agency endowment, or, in the alternative, establishing a separate endowment at the community foundation to support your organization.  

Here’s a little background that may help you explain the differences to your donors.  

Building your agency endowment

Many donors will want to support your endowment at NCCF. Having an endowment with NCCF signifies to donors that the organization is serious about long-term financial security. The endowment offers a permanent income stream that can be distributed or reinvested, while offering assurance to donors that the principal of the fund will be protected. To grow your endowment, your board of directors may elect to make transfers from your organization’s assets to the fund. Your donors may make gifts of cash or stock to the endowment or may name the endowment as a beneficiary in their estate plans.  

Donor-established endowment fund

Sometimes, a donor would like to support your organization by establishing a separate endowment at the community foundation that names your organization as beneficiary. Known as designated endowments, these may be established by the donor during their lifetime or through a bequest. With these funds, NCCF will invest the fund and make annual payments to your organization, ensuring that the principal of the donor’s gift stays intact in perpetuity. The donor can name the fund whatever they’d like (e.g., the Smith Family Endowment Fund).  

The NCCF team is experienced at managing the accounting, investment and distribution aspects of all types of endowment funds. When you work with us, it’s convenient and rewarding to establish and grow your organization’s endowment as well as offer donors the option to set up a separate named endowment. Both types of gifts help your organization meet its mission, stay strong and improve the quality of life for future generations.  

This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.