Endowments
In an endowment arrangement, your gift of capital is typically invested by the charitable organization or foundation into a pooled fund. Once created, further gifts can add to the endowment as time goes on. Gifts to build the endowment capital can originate from just about any of the charitable giving strategies discussed elsewhere on our web site ... securities, life insurance, bequests, residual interests to name a few. The principal gifted capital remains indefinitely. The income earned annually is distributed to the causes you wish to support.
Larger charities have their own endowment funds. Alternatively, Community Foundations provide more flexibility to support many varied charitable causes in the community you live in. You can passively allow the Charity or Foundation to determine what function or who should receive the income generated by your endowment fund. Normally, though, the donor will request that they have a say in where the income is used.
Just to give an example, say the Smith family had accumulated a fair amount of wealth in stock and mutual funds. They wanted to give back to the smaller organizations in their community but found that many local charities, desperately in need of funding, were too small to accept direct stock gifts. The solution was to create a donor-advised endowment in the Smith name through a Community Foundation. Each year thereafter, they were able to direct the Foundation as to what charities were to receive the income generated by the endowment fund.
If an endowment arrangement holds appeal, we will assist you with the implementation of this strategy. Contact us and we'll evaluate what giving strategy meets your goals and financial plans most effectively.
