An endowment campaign, also called an endowed campaign, is a non-profit organization that raises money to invest instead of expend. The proceeds from such an endowment campaign are invested by the group in assets that will generate future income. The income from such an endowment campaign is usually used to cover ongoing operating expenses, fund special programs and projects, or simply be used to generate a second income. Endowments can take many forms, but basically they are small gifts or donations from a single donor, which are then given directly to the beneficiaries. There are numerous advantages to having an endowment campaign; one of the most important being that they provide immediate financial aid to the needy groups and individuals. They also increase the credibility of the benefactor organization and its members, since the money came from an independent donor.
Endowment campaigns can be very costly, though. In some cases it may require large amounts of money to start up and maintain. In other cases, large amounts of money may not be enough to run an effective endowment campaign. Because of this, organizations have several options for managing endowment campaigns.
Endowment campaigns can be organized around several types of events, including fundraisers, concerts, lectures, seminars, fairs, and creative activities, such as plays, movies, and concerts. Some organizations, like the John D. MacArthur Endowment, operate regular annual or semi-annual fundraising events that feature some combination of these elements. Other endowment campaigns may focus on creating a series of small gifts over time, instead of a single large gift, as is more common in the concert, movie, and festival venues. Endowment Strategies may also include creating a series of small annual give-aways, which can be further developed into a grand endowment campaign.
Endowment Campaigns can be managed by managing funds per event. For example, the Lions Club has an Endowment Campaign that allows members to contribute funds over a series of annual meetings, with corresponding gifts at each meeting. The supporters of the Lions Club are assured of continued support as well as opportunities to attend future Lions Club meetings and participate in future Lions Club activities. Endowment Campaigns can be very effective when the focus is on generating a large amount of revenue over a relatively short period of time.
Endowment Funds may be administered internally. This means that they are provided by the individual member of the organization, or an agent, who manages endowment funds on behalf of the organization. Management of endowment funds within an organization’s executive team plays a key role in ensuring that the funds remain active and productive over time. Management typically reports to a senior manager, who is responsible for determining how the funds should be invested to maximize their returns. Endowment Fund management is an important part of the strategic planning process for most nonprofit organizations.
Endowments are generally established for specific purposes, such as establishing scholarships or endowed staff memberships. These purposes might also include building houses for the homeless or providing low cost housing to those with low and fixed incomes. Endowment funds can be raised from a wide range of sources, including private foundation grants, corporate gifts, and the sale of endowments. Fund raising events serve various purposes for the donor, including increasing awareness about a cause or issue, generating media publicity, attracting volunteers or other participants, attracting additional donations, and/or generating media coverage and accolades.
Endowments serve as a source of equity for a number of projects that an organization may wish to undertake. They are a source of long term and short term financial aid for the growth of the organization. Endowments allow for flexibility in the use of the monies collected, with the possibility of more frequent use for operational expenses than contributions from individuals. This raises the issue of whether a greater amount of endowment campaign support will provide more value to the organization. For example, if a large number of donations is needed to launch a nationwide youth expansion initiative, could the endowments provided by benefactors provide that amount over a period of time?
In addition, an endowment campaign raises money for a variety of projects and uses it to support the operations and needs of the organization. Endowment Fundraising requires careful planning and follow-up to achieve its goals. For this reason, it is usually undertaken by those who are well versed with all of the details of how to successfully conduct such an endowment campaign. It can involve complex financial calculations, so it must be undertaken by people who are confident they can complete the necessary tasks. Endowment Fundraising includes careful research and analysis of a wide variety of factors that will affect the success of a campaign. The success of a campaign largely depends on the level of support that was received from potential donors.