Nonprofits

A nonprofit endowment is a long-term fund held and managed by The Greater Taylor Foundation on behalf of a nonprofit organization. The commonly accepted definition for permanent endowment is a fund which is kept in perpetuity where earnings provide regular operating support or support for a specific project for the benefit of the organization. The very word “endowment” encourages donors to believe that the fund is intended to exist forever.

Building a permanent endowment provides organizations with future stability and a foundation from which to grow, not contingent on the success of current or future fundraising efforts. Having an endowment fund provides a constant source of annual income while demonstrating security and long-range financial planning.

An operating reserve is a board- designated fund reserved for specific or emergency needs. While the fund may be invested (not just held in a savings or checking account), the principal is available to the organization in a time of need. In an endowed fund, the principal investment is permanently restricted from use.

Yes. The Foundation offers two endowment alternatives for nonprofit organizations – a permanent endowment and a “sustaining” endowment. The “sustaining” endowment is intended for the long term (but not necessarily permanent) support of the nonprofit. Extraordinary distributions may be made to the nonprofit from the fund, if requested by a vote of the nonprofit’s board and approved by the Foundation’s board of trustees. This provides the nonprofit organization access to the endowment in the event of a financial or administrative emergency.

The Foundation is a nonprofit organization and our only business is community philanthropy. The advantages of working with the Foundation include:

– Participating with a first asset management team that will professionally manage your philanthropic dollars.

– Investment oversight from a dedicated investment committee of financial and business professionals who have extensive experience in investment and financial services.

In the interest of fostering sustainability within the nonprofit community, the Foundation offers charities the opportunity to establish a fund with a suggested $10,000 deposit.  

There is no fee to establish a fund and a nominal fee for managing the fund. The current administrative fee is 1.25% of the fair market value of the fund.

No. Organizations with funds managed by the Greater Taylor Foundation do not need an investment policy. As a component fund of the community foundation, these funds are subject to our Statement of Investment Objectives and Policies.

Yes. In addition to investment management, nonprofit fund holders benefit from the following services:

– Clear and concise reporting of all financial activity

– Processing gifts of securities and tangible property

– Planned giving expertise

To preserve donor intent, the charitable earnings will be redirected by the Community Foundation’s Board of Directors to the most similar cause that can be found.

Donors may feel more comfortable leaving money for the benefit of their favorite organizations through the Community Foundation. The first U.S. Foundation was established in 1914, and now there are over 700 nationwide that share the same mission – to preserve community assets for the purposes designated by donors. 

Considerations include the size of the annual operating budget, scope of the mission, capacity of staff and Board, and age of the organization. Many organizations find it advantageous to work with the Greater Taylor Foundation because they benefit from the instant credibility that comes with partnering with the community’s trusted partner in philanthropy, where major gifts are stewarded regularly and investments produce solid returns to benefit the community.

Endowment funds provide a permanent source of revenue. Funds should not be committed to an endowment that will be needed for operating expenses.

A healthy and stable nonprofit organization meets its operating budget from a variety of revenue sources. An endowment or carefully-managed sustaining endowment fund provides annual income or accessible resources for long-term needs.

For funds in an endowment, the crisis must be resolved with other financial resources. If funds have been directed by your donors to an endowment, then it is your fiduciary duty to treat those funds as such. If the funds are not restricted, your organization has more flexibility for their use.

The administration of a public or private foundation requires significant expertise, staffing and financial resources that could otherwise be used to further your organization’s mission. Establishing another entity may not protect your assets from a future board that wants to direct endowment funds toward another use.

Financial and investment firms also offer investment management services, but the GTF is a nonprofit organization and our only business is philanthropy. Ensuring the stability of your organization is essential to our mission.

GTF’s investment portfolio is professionally managed by independent fund managers. The Foundation’s board has established an investment policy to govern the investment of the Foundation’s resources, and an Investment Committee [comprised of board members and community representatives] meets quarterly with fund managers to review the performance of the investment portfolio.

GTF invests nonprofit funds in a balanced, diversified portfolio that includes equity, alternative, and fixed-income components. The portfolio is broadly diversified across all asset classes for long-term growth.

The administrative fee is 1.25% of the average fund balance. The minimum annual fee is $100, which is charged quarterly. Each fund pays a prorated portion of the direct costs of investment management and fees.

Clear and concise quarterly reports reporting all financial activity.

– Acknowledgement of all gifts to fund from donors.

– Processing gifts of securities and tangible property.

– Assistance to meet with donors who are interested in leaving a gift or establishing a fund for your nonprofit organization.

– Periodic meetings by foundation staff with board of directors and/or committees.

-an Organization connected to the heartbeat of the needs in the community and the organizations meeting those needs. 

An endowment that is part of a comprehensive development program should not negatively impact annual giving. An endowment may appeal to donors considering a gift to the organization in their estate plan or when their finances allow a significant gift.

Those closest to your organization–current and former board members, donors, and volunteers — are the best candidates. Making an endowment gift will appeal to people who are motivated to make a long-term impact on your mission.

The Foundation cannot directly help you solicit donors or run a fundraising campaign. We are available to discuss your ideas, assist with complex assets like closely-held stock or real estate, or help donors with planned gifts like charitable remainder trusts and charitable gift annuities.

No. Organizations with a fund at the Foundation are still eligible to apply for grant funding and are not favored over other organizations in our community grant process.

If an organization dissolves, then the Foundation continues to hold the assets in the fund. Annual spendable income will be directed toward a similar organization or cause identified within the Taylor area.