Should Your Nonprofit Build an Endowment? (Summer 2006)

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“To endow or not endow?” That is the question raised by Mark Hager as he considers the risks and rewards of building an organizational endowment. For example, while nonprofits often see endowments as the holy grail of stability, few may think about the implications of the permanently restricted nature of those large investment pots. Endowments can certainly be gifts that keep on giving in more ways than one, including the fact that well-endowed organizations often attract additional investments for their promise of long standing benefit. On the other hand, some donors may shy away from such organizations in the thought that there are others more in need of their money. Ay, there’s the rub, and another reason to read on before weighing this important decision.