OBCF 101-9 – The 5 Ws of Endowments
In an effort to better connect with our community and educate people about all of the unique facets of the Community Foundation, we have created OBCF 101.
Last week we talked about how everyone can support our local nonprofits through their endowment funds, so for OBCF 101-9 we wanted to dive a little deeper into the 5 Ws of endowments.
What’s an endowment fund and what do you mean it is a forever fund?
An endowment fund is a permanent investment fund, where the original gift is invested to generate income, but the principal is preserved to support a charitable purpose indefinitely. An endowment is considered a “forever fund” because the original gift is permanently invested while a small portion of the generated income is used for charitable distributions each year. This model allows the fund to grow over time while protecting the original gift.
Why should I create an endowment fund?
Donors who endow their gifts can make a difference in their community during their lifetime and, at the same time, provide a gift that lasts forever.
Who can create an endowment fund?
Any individual, family, business, nonprofit organization, civic group, government agencies, or private foundation can open an endowment fund for a cause that they are passionate about. Funds can be created to memorialize loved ones, support a favorite issue or charity, provide scholarships, and more.
When is a good time to create an endowment fund?
That is up to you! Some donors get started immediately. Some donors choose to complete the fund paperwork in their lifetime, but activate their fund with a gift by bequest.
Where would my endowment fund be kept?
The Community Foundation holds more than 250 endowments for the Outer Banks, making it a trusted and experienced partner for anyone looking to start a charitable fund. With over 40 years of helping hundreds of donors support the causes closest to their hearts, we bring not only deep local knowledge but also expert guidance to ensure lasting impact. All charitable funds are professionally invested and carefully managed to grow over time, so your generosity keeps working for years to come.
How do I create an endowment fund?
- The first step is to visit https://obcf.org/giving/
create-a-fund/ or call the Community Foundation at 252-261-8839. - Then, our staff will meet with you to learn about your charitable goals, explain how it works, and help you set up a fund.
- You will sign a short fund agreement, which the Community Foundation board approves and signs. This agreement is the permanent governing document for your fund.
- Most of the Community Foundation’s funds start at $5,000, and can be contributed to over three years. Creating an endowment fund with the Outer Banks Community Foundation is an easy, flexible, and effective way to make a lasting impact on the community and fulfill your charitable goals.
The Outer Banks Community Foundation’s endowment funds are structured to be a permanent resource for generations to come.
Stay tuned for our next OBCF 101!
About the Outer Banks Community Foundation: The Outer Banks Community Foundation is a 501(c)3 nonprofit organization committed to fostering philanthropy and supporting local causes. Through its charitable funds and grant programs, the Foundation strives to enrich the quality of life for residents of the Outer Banks
