Endowment Building: Not a Spectator Sport

Even if a charity does not have any true endowments, it can still create and augment a quasi-endowment, especially by drawing on planned gifts. Many organizations, including those with true endowments, have a policy of assigning to a quasi-endowment all unrestricted bequests and other matured planned gifts. 

Additional options are:

  • A percentage of each such gift,
  • All dollars over (or under) a certain threshold amount, or
  • Some combination of the first two bullet points.

Going yet a step further, a charity could make known to donors ahead of time that if they leave a bequest to the charity, all or some specific portion of the gift will be added to an endowment. Under the law of most states, such an indication, coupled with a donor taking it to heart when arranging his or her gift, would actually be enough to make the gift one for a true endowment.

Read more about endowments and planned gifts by viewing our March 2012 Featured Article Endowments Enable Planned Gifts to Cast a Long Shadow.