Endowment Building

Why an unrestricted endowment?

When Einstein was asked what the most powerful force in the universe was, he paused for a moment and then quipped “compound interest.” 

Charitable endowments are a technology you can use to make the most powerful force in the universe help to sustain and enhance your hometown.  In general, “an endowment is a permanent fund whose assets are invested to generate income to be used by the beneficiary nonprofit organization.”  An unrestricted endowment means that the donor has given the affiliated fund the power to choose how the proceeds from the endowment are spent – it’s a discretionary asset.  Discretionary assets provide the margin of excellence a community needs to be innovative, entrepreneurial, responsive to change and successful.

If your community or organization had $50,000 to invest in community priorities, how would you use it?  Would you invest in new computer equipment for the library? Provide a subsidy to ensure every child has access to high quality affordable day care? Provide scholarships to non-traditional students working to enhance job skills? Fund technical assistance and training for new businesses?

Now imagine your community has $50,000 a year every year forever to invest in community priorities.  What sustained difference could you make in your town? Maybe you could do all the things cited above, many for more than one year, and begin to make your hometown significantly more vital.  A $1 million unrestricted endowment could generate nearly $50,000 each year to invest in your community. Most Nebraska communities have the potential to raise an unrestricted endowment much greater than $1 million.

This section of the Web site will provide you with:

• information on how and why you should consider building an unrestricted endowment for your community or organizational affiliated fund,
• steps to build an endowment and endowment growth scenarios, and
• information on how to use the intergenerational transfer of wealth as a case statement when building your endowment.

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