For most nonprofits, obtaining funding is a challenge. Programming and services are made possible through an ever-changing combination of grants, donations and fundraisers, and those streams can be difficult to predict.
In response, endowed agency funds have gained popularity in recent years.
“Endowments create a more consistent and secure source of funding,” said Laura Booth, Donor Relations Officer at the Community Foundation. “This can help an organization focus on their mission and their future within our community.”
Endowments can be difficult to establish, as they require raising significant capital upfront, but the benefits can be long-lasting and far-reaching. Through endowments, capital raised now can support an organization forever.
Nonprofits looking to build an endowment can apply to the Endowment Challenge Fund at the Community Foundation. A grant from this fund matches gifts to the organization at a rate of $1 for every $3 raised, up to $25,000, with five years to meet the match.
In 2019, Big Brothers and Big Sisters of Cedar Rapids and East Central Iowa was awarded the Endowment Challenge Grant.
“Big Brothers Big Sisters is committed to growing our capacity to help more children and sustaining that growth with an endowment,” said Linda Henecke, the agency’s President and CEO. “We’re excited to receive the Endowment Challenge Grant and support from the community to help youth achieve their biggest possible futures.”
The Community Foundation manages these funds with a long-term time horizon to preserve the initial value while allowing for an annual distribution. Those distributions provide general operating support, stability during cyclical income variances, and income for areas of high importance to the organization.
This is especially important because raising funds for general operations can be unpredictable due to outside influences, such as current economic state and changes in legislation. The flexibility also allows organizations to respond as community needs change and new opportunities arise.
“One of the most impactful ways to support a nonprofit organization is to contribute to their endowment,” Laura said. “It truly is an investment in their work. The gift will grow, continuing to support the organization for years to come.”
A gift to a nonprofit’s fund at the Greater Cedar Rapids Community Foundation will help support their work forever.