Integrity in Endowment Management

An organizational endowment is a cherished asset. While some use it as a tool to build and maintain a position of excellence, others use their endowment for the financial stability and survival of their organization.

We fully understand the important role of an endowment, as well as the fiduciary responsibility of the governing body.

Because of the underlying integrity, our management of endowment funds involves an in-depth approach that begins with the governing board, extends to the staff, and ultimately extends to the individual donors to the organization.

This comprehensive approach begins with a readiness assessment that includes an evaluation of the governing board’s understanding of the value of an endowment and its willingness to help the endowment grow.

This initial assessment is followed by an analysis of the function of the endowment with regard to current and long-term needs. Many endowments have numerous accounts, each with a specific purpose. The investment strategy may vary with each account and may therefore require a careful analysis.

A review is then conducted to determine endowment policies and guidelines within the organization. Important questions will be raised, including:

  • Do the policies address the needs of each account and the organization?
  • Are there spending rates and savings rates?

Growing your Endowment

Endowments grow in two ways: from the inside and from the outside.

Internal growth depends on the investment strategy including asset mix selection, proportion of equities and fixed income instruments, and domestic and international investments.

An endowment’s external growth comes from the development of new sources of contributions. These contributions can be in the form of outright major gifts through endowment campaigns and planned gifts such as bequests, charitable trusts, charitable gift annuities, gifts of life insurance and others.

Plans for planned giving, including staff tutorials, are developed in concert with the organization’s experience, needs and goals. Once defined, these needs and goals are then incorporated with McKinley Carter’s fund raising experience and extensive research into the characteristics of effective planned giving programs. From this blend of the organizational needs, McKinley Carter’s Philanthropic Advisors develop a meaningful plan for growing the endowment – bringing more than forty years of fund raising and planned giving experience to every plan.

Research plays an important role in the success of endowment building. It is critical when developing a plan for endowment growth to know when to promote wills and when to promote Charitable Gift Annuities or Charitable Remainder Unitrusts. It is also important to know what type of planned giving instrument best meets the needs of the donor.  Our research reveals that the following are the most significant planned giving instruments:

  • Bequests account for 55% to 60% of all planned gifts
  • Charitable remainder trusts comprise 19% of a planned giving total
  • Charitable gift annuities at 5%
  • Gifts of life insurance with 5%

Equipped with this research base, which includes The Art and Skill of Major Gift Fund Raising, and with professional experience honed over four decades, we are able to offer our nonprofit clients unparalleled expertise enabling them to build their endowments – managed with integrity.