endowment infographicPermanent Financial Resources… what is an endowment?

An agency endowment is a fund that is made up of gifts and bequests designated for a specific organization. They are subject to a requirement that the principal be maintained intact and invested to create a source of future income for the specified organization.

Importance of Endowment

Agency endowments provide a permanent funding source for operations, offsetting the often unstable public funding sources and ensuring a quality level of programs and services. These critical funds also help agencies provide for sustainability to meet changing needs, providing funds to balance budgetary needs and creating a base to encourage other fundraising efforts.

Building Endowment

Planned Gifts – gifts left in donors’ estates to benefit the charity or endowment directly.

Campaigns – capital campaign or bequest campaign to jumpstart an endowment balance or grow an endowment.

Major Gift Donors – seed money for endowment creation or contributions to support significant growth.

Allocation of Revenue Streams – surplus revenue that can be swept into an endowment.

Investment Returns – based on a spending policy, the amount of investment returns that will be reinvested each year.

Endowment Management at the Foundation

Your nonprofit can establish an endowment fund at Kern Community Foundation. This gives your staff and Board the freedom to focus on programs and services while the professional staff at the Foundation manages your endowment.

Benefits

  • Receive personalized support from Kern Community Foundation in growing your planned giving program and endowment fund.
  • Technical support for developing planned gifts.
  • Accept complex gifts like private equity, real estate, and other alternative assets.
  • Ability to take a distribution from the endowment above and beyond the annual “available to spend” due to a catastrophic event.
  • If your endowment is held by Kern Community Foundation, the Foundation will determine spending and investment policies and ensure compliance with regulations like UPMIFA. Your nonprofit will be relieved of this responsibility.

Investment Services

An endowment is invested that way it grows over time, remaining a stable source of income. Kern Community Foundation offers 3 options for investing your endowment fund:

  1. Choose an Foundation investment mix
  2. Create your own investment mix with Foundation investment pools
  3. Have your own financial advisor invest the assets

To learn more about establishing an agency endowment, contact our Donor Services at 661.616.2617 or donorservices@kernfoundation.org.

Kern Community Foundation