Help! How do I convince funders to make endowment grants?

 

Regi

4

Dear Regi, 

I am an old timer in the foundation world, so I am intimately familiar with the inherent power imbalance in the funder-grantee relationship. I want to know how we can interest more foundations in making endowment grants to their flagship grantee partners – a ‘share the wealth’ campaign if you will.

We know that an important building block towards long-term sustainability of nonprofits is an endowment. We also know that many of the challenging issues facing foundations today, such as eliminating inequality, fighting global warming, gender equity, and eradicating racism will not be solved via standard foundation practices. The field needs to take bold steps now to ensure the long-term viability of those key organisations to effect major changes. 

When I was a program officer a large American Foundation in the mid-1990s, the foundation did make endowment grants to organisations, so this concept has precedent. Why isn’t it more widely accepted? What can we do to advance this discussion among our colleagues?

Sincerely,
Old-Timer

Dear Old-Timer, 

Share the what

Oh, thank you for allowing me to pontificate on the concept of sharing which is de rigueur these days. Our spanky new sharing economy (think: AirBnB and Uber) has resulted in every piece of property valued more highly as a temporary hotel than an actual home and every driver is self-employed with no health insurance or benefits of any type. Great! Of course, the IPOs have generated immense wealth for the happy few who ultimately may become philanthropists. 

No, I wouldn’t rely on a sharing mentality to create an endowment. 

What can we do to advance this discussion? How about ‘just do it?’ Fund endowments and make the case for doing so! Point to the precedence and show what can be achieved when we liberate civil society partners from endless cycles of grant-chasing, and rather make it possible for them to do the important work they’re meant to do. Though you’re old, I’m sure you remember high school parties: peer pressure works! Send a message to your funder buddies that now is the moment to build the stability of key organisations that have stepped up over the course over the Covid-19 pandemic but are now exhausted and deserve more from us.

And it shouldn’t be hard, right? The rich just keep getting richer. Of the 62 living signatories to the Giving Pledge, their personal wealth has increased by 95 per cent over the period 2010 – 2020, with their total wealth increasing an additional 28 per cent over the first four months of the pandemic. What’s that I smell? Is it endowment funds?

Cupcakes and endowments, 
Regi


Read more Philanthropy Confidential or ask Regi your own question.

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Comments (4)

Barbara Poley

I am an old timer as well living in a unique location with an established tribal endowment for education established 20 years ago with 10 million and now at 30 plus. Although many people not knowledgeable about our situations which means we are somewhat isolated from the large world where foundations and donors are found. Many of the early founders were very educated about NPOs but endowment building was new to a few. Some of these underrepresented organizations are still building capacity of local personnel to understand the value of endowments. It would be nice to learn of others small organizations doing well but now struggling and share the goodness we provide for our communities. The work has been successful but the need grows for the funds to be there for the future.


Philip C Lawford

I realise that this is more of an intellectual / academic response than a pragmatic one. However, should charities / NGOs / CSOs that are "normally focused in a social, environmental, cultural or economic problem or situation that impairs the full development of individuals, families and communities" not be trying to eradicate the problem in question? I realise (again!) that in the real world that is a pipe-dream more often than not; nonetheless should philanthropists not be encouraging charities to do that, or at least not be incentivising them to exist in perpetuity?


Robert Dufton

Start allocating some of your unrestricted annual gifts to a longer term fund to model the behaviour you seek others to follow (UK charity trustees can't self-declare their unrestricted funds as a permanent endowment but can establish a long-term fund).


Marcos Kisi

Dear fellows I am also an old-timer . I also had the opportunity to be in leadership position in a large American foundation working internationally. I have a different position with respect to endownment for NGOs or, as I prefer CSOs. Different from government organizations, that once create existe forever as part of public bureaucracy, or from business companies that are in a competitive market and are in constant process of innovation to survive and growth, CSOs are normally focused in a social, environmental, cultural or economic problem or situation that impairs the full development of individuals, families and communities. And,in those circumstances, there are contant and permanent changes. Problems and situations are dynamics. One can expect that CSOs should be changing in the same way. In my experience, with an endowment, the organizations lose the flexibility to change, persisting in determined focus,making the same activities ,products or services. The organization loses the significance for the community has new problems and questions to address.In a way, the organization lose the role of changemaker. It is one more bureaucracy working in the development field. Fellow B


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