The organization should consider the amount of money it wishes to invest in the endowment, which can at the same time cover the organization's annual budget. Therefore, this option needs to be studied well, considering that the funds to be invested are the result of fundraising efforts.

The potential income that the endowment will provide in the future needs to be determined, as experts say that the expected revenues from the endowment should not be less than three times the executive organization's annual budget as a minimum.

The organization needs to earn the sympathy of many donors in the long term to ensure the size of the endowment, given that many endowment donations may come as a result of the recommendation of a certain donor.

The board of directors should establish the rules for the endowment. For example, you will need to name the endowment, restrict its use, and provide guidelines on the amount of benefit that can be used annually, as well as extraordinary circumstances that might prompt the organization to utilize it.

The organization must choose between establishing an endowment that belongs to the organization or one that is separate from it, depending on the laws governing nonprofit practices.

The process of establishing the endowment may not be costly or difficult at the beginning, but the organization will need to obtain some assistance from community organizations in order to maintain it.

The organization should work closely with its accountant and lawyer to ensure that the endowment complies with national requirements.

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Author: Scott C. Stevenson