PLANNED GIVING

Leaving a Legacy

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What is an endowment? What types of endowments exist (temporary and permanent, restricted and unrestricted?)

When many folks imagine an endowment, they consider the funds created by large universities and major healthcare organizations in the United States. Truth is, some of the largest nonprofit endowments are associated with those organizations consisting of many hundreds of billions of dollars, in fact.

What’s more, endowments have been accurately reported to have grown faster than the consumer price index (CPI) thanks to wise and prudent investment management policies. Further, their growth has been attributed to the comingling of funds with other investments, bringing an economy of scale to the corpus of the investment.

Nevertheless, endowments of several types and categories exist for other nonprofits and for the decades following the 1970s and 1980s, some endowments have been created and grown to intentionally support LGBTQ+ communities. To be sure, an endowment fund is cash invested to earn revenue to fund charities. With many endowment funds, the principal value is left untouched and the investment earnings can be distributed to charities in the form of grants. A good number of endowment funds are held permanently, allowing the donor’s original intent to far outlive generations beyond their own lifetime. A category of a charitable cause, a named organization, scholarships, and fields of interest funding can all be types or categories of endowments as each fund must have a written purpose that expresses a charitable intention. That’s what separates the endowment funds from typical investment funds.

While some donors arrange to establish their own endowment funds with their financial advisor, they may also work with a nonprofit or a community fund such as the Delaware Valley Legacy Fund. Donations to endowment funds are fully tax deductible, however, most donors express a community-supportive mindset as their primary motivator for doing so. What makes the neighborly intentions more appealing, though, is that donors can receive a charitable tax benefit almost immediately upon making a donation, while building a permanent grantmaking resource in perpetuity. The appeal to supporting something that will last forever is quite powerful to many and inspiring for others wanting to create a more equitable support system for members of their community.

Individuals, households, families,  corporations, foundations, nonprofits, and groups of people may raise funds and donate both cash and non-cash assets (e.g., art collections, stocks, bonds, real estate, cryptocurrency, etc.) to help fund a previously existing endowment or to build their own.

The Delaware Valley Legacy Fund (DVLF) has multiple endowment funds that make use of investment management strategies steered by the Philadelphia Foundation and its Investment Committee, along with the support of a nationally renowned investment management firm with experience in providing investment services to some of the world’s largest nonprofit endowments. The advice provided to the Delaware Valley Legacy Fund’s endowments is outstanding and brings credit to the quality of return on investment and security that the partnership with the Philadelphia Foundation brings to bear to support the LGBTQ+ communities.

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For more information or to get started, please email info@dvlf.org

 

 

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