Non-Profit Organization Endowments
The main purpose of a non-profit organization's endowment is to provide a long-term and consistent source of financial support for the organization. In these days of uncertain funding, non-profit organizations are looking for ways to stabilize their income and ensure their revenue streams. One of the ways organizations can do that is by establishing a non-profit organization endowment within the New Canaan Community Foundation.
The New Canaan Community Foundation can be a great help in managing your organization's endowment. Classified for tax purposes as a public charity, community foundations specialize in managing permanently endowed funds for the benefit of a specific charitable cause or the general welfare of the community. A community foundation is often described as a pool of endowed assets.
An endowment fund is created for the express purpose of providing a source of permanent, ongoing support to a specific non-profit organization. A portion of the income from the endowment is distributed to the organization annually or when needed by the non-profit organization, while the principle grows to provide future benefits. The endowments usually allow other donors to make contributions as well, growing the fund.
The New Canaan Community Foundation provides a natural setting for permanent gifts such as an organization's endowment. Important benefits most often cited are:
- Investment with larger pool of assets and access to higher returns
- Professional investment oversight
- Simplicity in receiving and processing additional contributions to Fund
- Allows organization to focus on other priorities
- Boosts donor confidence
- Preparation and filing tax returns related to that endowment
- Administrative Support
Each fund is assessed its pro-rata share of the Foundation's investment expenses. Fees impact the net asset value of the fund and are not charged separately. An annual administrative fee of 1% is also assessed to help cover costs associated with managing the fund.
For more information about establishing an Endowment for your organization or one that is important to you, please contact the NCCF office.