Transcription of Endowment Development Resource
1 2009 ymca of the USA 800-872-9622 Endowment Development Resource How to Establish and Sustain an Endowment Program at Your ymca Project leader: Carol Schmidt Managing editor: Donna Donato Copyeditor: Laurel Haines Proofreader: Sharon Honaker Copyright 2009 ymca of the USA. This publication is available at or by calling 800-872-9622. ii Contents Introduction .. 1!Message to board members, CEOs, and executive directors .. 1!The time is now .. 2!About This Guide .. 3!The role of experts .. 3!Overview of an Endowment Development Program .. 4!Definitions you should know .. 4!Types of gifts .. 5!Types of funds .. 6!Financial reporting .. 6!Benefits of an Endowment Development program .. 6!Tax considerations .. 8!Need motivation to get started? Just imagine.. 9!Organizing an Endowment Development Program .. 10!Develop your case .. 10!Establish goals.
2 11!Develop an action plan .. 11!Obtain board approval .. 12!Recruit Endowment committees .. 12!Develop policy guidelines .. 13!Establishing and Managing an Endowment Fund .. 15!Decide the Endowment fund s legal status .. 15!Implementing an Endowment Development Program .. 16!Communicate with the board .. 16!Identify donor prospects .. 16!Cultivate donors .. 17!Use multiple approaches to educate prospects and donors .. 17!Donor stewardship .. 19!Qualifications for Heritage Club membership .. 19!Recognizing Heritage Club members .. 20!Reporting to Heritage Club members .. 21!Additional Resources for Endowment Development Programs .. 22!Appendixes .. 24!A. Sample board resolution for establishing an Endowment fund .. 25!B. Understanding and drafting not-for-profit gift acceptance policies .. 30! ii C. Sample Endowment investment guidelines .. 31!D. Sample Endowment fund distribution (spending) policy.
3 32!E. Heritage Club A case for giving to the Endowment fund .. 33!F. Heritage Club Recognizing Donors to the ymca Endowment Fund .. 34!G. Sample Heritage Club search letter .. 36!H. Sample Heritage Club search response form .. 37!I. Sample Heritage Club gift information .. 38!J. Sample Heritage Club dinner program agenda .. 40!K. Endowment Development program planning template .. 42!L. Endowment Development planning tool .. 44!M. Gift vehicles for building the Endowment fund .. 50!N. Sample bequest language to make gifts to the Endowment fund .. 56!O. Whether a local ymca should set up a separate corporation for its Endowment .. 57 P. Schedule D of IRS Form ymca of the USA Endowment Development Resource 1 Introduction YMCAs with exceptional financial Development programs develop and maintain a board of directors that views philanthropy as one of its top priorities and leads by example.
4 These YMCAs utilize the board to develop and implement a comprehensive, multi-year plan to fund the philanthropic priorities of the association s strategic plans now and into the future. This multi-year plan includes annual, capital, and Endowment Development fundraising strategies. These YMCAs, at a minimum, have an active Endowment Development program focused on soliciting legacy gifts to support the vision and sustainability of their ymca . In addition, most of these YMCAs identify and develop meaningful ongoing relationships with donors and prospective donors who are capable of giving meaningful gifts to further the work of their association in their community and whose interest and donor motivations align with the ymca s mission and programs. Message to board members, CEOs, and executive directors YMCAs serve people of all ages, and some individuals throughout their lifetimes. Through this process, we develop friends of the ymca movement who will make a current or future gift to a ymca in order to share their good fortune; to help others; or to perpetuate their beliefs, values, and ideas for future generations.
5 To help assure your ymca s long-term financial stability, it is important to implement a strategy to create and grow an Endowment fund. Earnings from this fund can support programs in your annual operating budget, provide flexibility in developing programs to respond to changing community needs, support future building maintenance, and provide a safety net in times of crisis or economic uncertainty. As ymca leaders, your goal should be to build an Endowment fund that will provide a permanent source of funding so that your ymca can meet its mission now and in the future. Moreover, through the planning you do today, you will join other YMCAs across the country to help ensure into perpetuity that ! every child and youth will deepen positive values, their commitment to service, and their motivation to learn; ! every family will build stronger bonds, achieve greater work-life balance, and become more engaged with their communities; and !
6 Every individual will strengthen his or her spiritual, mental, and physical well-being. ymca of the USA Endowment Development Resource 2 Long-term financial planning is a stewardship obligation of the leadership that was hired or elected to make their ymca stronger during their term of involvement. Who knows what the future holds, what new markets you will be called to serve, or what new programs will be required to meet your mission? Rapid changes to a local economy make it even more important to plan for the future stability of your ymca . The time is now Now is the time to start or reenergize your Endowment program. An Endowment Development program is the first step, or gateway, to a planned giving program. Colleges, universities, hospitals, and other not-for-profit organizations have long known the importance of an Endowment Development program. Your potential donors are reading or hearing about legacy giving opportunities through the fundraising efforts of their alma mater, local hospital, bank trust officer, insurance agent, and church.
7 How many of your members know that your ymca also has a need for gifts that will perpetuate its vision for the future? ymca of the USA Endowment Development Resource 3 About This Guide ymca of the USA created this guide to assist YMCAs in developing and strengthening their Endowment Development programs through understanding ! the importance of Endowment funds; ! how to manage the process of creating and administering Endowment funds; ! how to approach and manage the relationships between donors and YMCAs. If your ymca is just embarking on the Endowment Development process or has an Endowment program that is languishing, this guide will provide the information you need to start or reinvigorate your Endowment program. It provides an overview of how to create an Endowment fund, noting best practices at each stage of the process. Those charged with establishing relationships with donors and recognizing their gifts will find resources and templates here for launching a Heritage Club.
8 Executive staff will be more comfortable talking to donors and potential donors when they understand the Endowment Development program and the language of charitable giving. Endowment committee members are usually already familiar with various planned giving vehicles for making a gift to the Endowment fund; for them, this guide serves best as a planning tool to consult as they establish the procedures and guidelines they will use to create and manage the Endowment Development process. The role of experts This guide references several sophisticated planned giving vehicles. YMCAs with advanced Endowment Development programs likely understand and use several of them. And, while their leaders, staff, and volunteers may be familiar with the principles of these vehicles, these YMCAs still consult experts accountants, lawyers, and financial planners to guide them through the process of developing policies and procedures, accepting complex gifts, and addressing donors technical questions.
9 If your ymca is just starting an Endowment Development program, don t let these concepts and related language intimidate you. Your goal in using this guide is to understand how an Endowment Development program works so you can effectively manage the process of creating or building the program at your ymca . ymca of the USA Endowment Development Resource 4 Overview of an Endowment Development Program An Endowment Development program is an ongoing process of building and preserving relationships with friends of the association who may wish to make gifts to your Endowment fund during their lifetimes and/or include your ymca in their estate plans. The goal of an Endowment Development program is to bring donors closer to your ymca . The objective is to take a long-term view for building a portfolio of investments by cultivating relationships with prospective donors who could make current and future gifts.
10 A strong Endowment Development program does not hinder annual giving but rather strengthens a donor s love and passion for the ymca . Definitions you should know Many words are used interchangeably when talking about developing an Endowment Development program. This can be very confusing to staff and volunteers. These definitions, taken from Edward C. Schumacher s book, Building Your Endowment (a workbook series from the fundraising school at the Indiana University Center on Philanthropy), will help get everyone on the same page as you discuss your plans: ! Endowment . A fund of money, the principal of which is held in perpetuity and invested and from which an organization may use only the return on investment ! Endowment fund. The formal term to describe the accounting placement of Endowment monies on the income statement of the organization ! Endowment program. The permanent, continuous fundraising effort to build an Endowment and which from time to time may include an Endowment campaign !
