AMPERAGE Marketing & Fundraising

BlogHow to Establish a Nonprofit Endowment Fund

Subscribe to AMPERAGE Marketing & Fundraising

Learn about Nonprofit endowment funds

How to Establish a Nonprofit Endowment Fund

Learn about Nonprofit endowment fundsSince the beginning of the decade, organizations have learned the importance of having a nonprofit endowment fund. In the early days of COVID-19, many organizations with an established nonprofit endowment were able to maintain operations by drawing upon their endowment funds when fundraising activities to support annual operating expenses were diminished.

Organizations that did not have an endowment before 2020 soon recognized the importance of having available funds beyond reserves to keep operations and programs afloat if something transpires that prevents or restricts fundraising efforts.

According to the National Council of Nonprofits, a nonprofit endowment is described as assets set aside and invested to grow over time with the earned income used to support an organization’s financial stability or designated programs.

For organizations looking to establish a nonprofit endowment fund here are some actions to consider:

How will you provide seed money for your endowment?

Do you have a donor or donors who may be interested in securing your future and could be the first to contribute to an endowment fund? Do you have a capital campaign or special fundraising initiative in which you could include raising funds for your endowment?

What endowment policies will you establish?

Some organizations want to build on their endowment and will often establish a minimum balance before they begin to spend endowment funds. Is an endowment established to support a particular program, staff position or as another revenue source to support general operating expenses? Establishing a purpose for your endowment will help nonprofit leaders determine how the funds are spent and communicate the case for support to donors. It is often helpful to indicate how much of your endowment returns you will spend annually. On average, nonprofits budget 3 – 6% of their endowment balance to support their identified needs.

Who will manage your fund?

Do you have a close relationship with a financial institution that could hold your endowment fund? Some community foundations will also manage local nonprofit endowments and may include tax benefits for donors who contribute, such as the Endow Iowa Tax Credit Program.

Who will oversee endowment activity?

In addition, to which institution will manage your endowment fund, nonprofits may want to consider an internal audience to review investment activities, make investment adjustments and allocate endowment funds to designated needs. Often, nonprofits establish an endowment committee comprised of the nonprofit executive director, finance director, board chair, board treasurer and other volunteers with financial expertise such as investment planners, tax advisors, attorneys, etc.

Want to learn more about securing your organization’s future with a nonprofit endowment? Contact one of our fundraising consultants at AMPERAGE Marketing & Fundraising, 319-268-9151 or

Written by:

Melissa provides fundraising counsel for AMPERAGE’s nonprofit clients, leading feasibility studies and providing solutions that drive successful fundraising campaign results. A Certified Fund Raising Executive (CFRE), she uses her experience and extensive skill set to continually advance her fundraising practices and develop campaign-specific strategies, materials and training to help clients reach their campaign goals and advance their mission. Melissa has vast experience working in the nonprofit sector, having served in development and leadership roles with Sisters of Mercy and the Alzheimer’s Association. In addition, she has served as a volunteer and board member with local nonprofits, such as the Catherine McAuley Center. Faith-based organizations and causes are of particular interest to Melissa. Melissa moves the needle by always looking for new opportunities and ways to improve professionally. She is currently president of the Eastern Iowa Planned Giving Council and a past president of the Association of Fundraising Professionals-Eastern Iowa Chapter. Melissa holds a Master of Strategic Leadership degree from Mount Mercy University. This busy professional, wife and mother enjoys sports and live music in her free time. A fan of Cubs baseball and Iowa Hawkeye football, Melissa and family enjoy football tailgating, where she’s known for her breakfast burritos. She enjoys the local band scene but says a Foo Fighters concert is her all-time favorite.