Should We include Endowment in Our Capital Campaign?
Non–profit organizations often are in a quandary whether to increase their capital campaign dollar goals by including endowment sufficient to cover projected added operating costs for new or renovated facilities.
Here are several perspectives we've heard from our firm's clients:
From a major donor's perspective...
"I want to be assured that the buildings and facilities that my donation is helping to build, and which will bear my family's name, will be properly maintained and operated over the years as a result of sound financial planning."
From a financial officer's perspective...
"I shudder to think of our added annual operating costs for the upkeep, maintenance and programming of the new buildings we are raising funds to construct without the added provision for additional endowment."
From a Trustee's perspective....
"It will be tough enough to raise funds to build these buildings, and take care of the likely escalation in construction costs. Let's not overburden our ability to raise the necessary funds by including endowment."
From a Senior Executive's perspective...
"Even though I am very concerned about the financial burden we will face without added endowment income to support these new buildings and programs, I don't want to stand in the way of the Board of Trustees enthusiasm to 'get the job done' as quickly as possible."
From a Development Officer's perspective...
"I'm going to have a difficult enough time raising the cash required to pay for this construction project. I'd frankly just a soon not be asked to simultaneously raise funds for endowment."
And what's your perspective?
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Gary PhillipsThis article has been authored by Gary W. Phillips and must not be reproduced, in whole or in part or otherwise distributed without prior written approval to do so. 09/06
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