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3 Reasons Your Nonprofit Should Start an Endowment Fund with SEVACF

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3 Reasons Your Nonprofit Should Start an Endowment Fund with SEVACF

An endowment fund is a fund that is restricted, meaning that only a small percentage of the money in the fund may be used each year. Currently, the Southeast Virginia Community Foundation’s spending policy allows 4% of endowed funds to be spent annually. If a nonprofit has an organizational endowment at SEVACF, they are given the choice to receive their full spending allotment for the year at once, take only a portion of their spending allotment, or have the allotment roll over to the following year. Such a fund can benefit nonprofits in three, big ways:

1. Stability. An endowment creates financial stability for a nonprofit, allowing them to be less dependent on unpredictable sources of revenue, such as government grants or personal gifts.

2. Growth. All funds at the Foundation are managed by investment firms to grow over time. Therefore, your endowment will continuously generate income to fund operations, capital projects, and other needs.

3. Endurance. Because endowments are intended to be permanent, having one sends a message to the community and to your donors that you plan to be around for a long time. This can be comforting to donors and may encourage them to keep giving if they know your mission will continue well into the future.

If you’re a nonprofit in search of stability, growth, and endurance for your organization, contact our office today to learn more about how to start an endowment.

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