Living Endowment – This LIttle Two-Step Makes a Big Impact

The financial markets seem to be moving in a good direction recently – maybe a good sign that we’re on the right track.

But, for many, portfolios are still not much above where they were in 2008 – and, in some cases, they still may be below their pre-recession levels. And, not just your portfolio has struggled – so too have the portfolios of your favorite charitable causes… you local community organizations, your hospital, your alma mater, your church. While the need for action is great, the financial resources to fuel that action remain quite limited in many cases.

Is there something creative you can do right now to make a difference?

In fact, there is something very creative you can do now – that will have a big impact both now and later.

Say you have the desire to create an endowment – a legacy gift – that will last forever, perhaps to support a special program in your local community. Or provide scholarships at your alma mater. Creating an endowment may be beyond your reach right now. In fact, it may not be something you can do until much later – perhaps not until your executor is administering the Will you leave to direct the distribution of your estate.

The truth is that a bequest is the only chance most folks have to make a large gift.

But, with a relatively small annual gift, you can make a gift now that is the equivalent of what the organization would receive as income from an endowment. Here’s what I mean: You can bring to life your ultimate bequest right now – and, you can do so with an annual gift you likely can afford to make.

Then, at the time of your death – when the bequest you provide for in your Will finally is available for distribution – the gifts you’ve been making each year will be covered by the income derived from the endowment funded by your bequest.

This little two-step is a creative way to start having an impact now AND ensuring that you will be making a difference for generations to come.

How much will it take to make this happen?

Let’s say you want to support a special program or create a scholarship at $2,000 every year. That would require an endowment of $50,000. So, you could provide for a bequest of $50,000 in your Will to create the endowment. And, if you already have a Will, a simple Codicil can be used to add this gift to the terms of your Will. Then, you can plan to make annual gifts of $2,000 each year to provide immediate support for the special program or to make this new scholarship available.

Here’s the added advantage of this plan: You’ll get to see the impact of you generosity now, while you’re around to appreciate the value of your gift. If you just made the bequest and did nothing more than that, you’d never see this impact or, in the case of a scholarship, actually meet the students whose lives you touch.

There are great needs for people to do what they can to help. If you can make even small annual gifts and arrange for a large gift in your estate, you would be a philanthropic hero.

Got a question, just use a comment to let me know.


About ted sudol

Ted Sudol brings a cross-disciplinary perspective to his work in philanthropy & fundraising. Currently Managing Director at CARTER, a professional firm dedicated to advancing philanthropy worldwide, he has nearly four decades as a fundraiser, lawyer, executive, communicator and consultant in the voluntary, public and private sectors. From local to global, his work with educational, healthcare, arts & cultural, and community organizations ranges from designing new ventures, campaign readiness plans, and complex gift strategies for high net worth families to rebuilding and repositioning projects. His specialty is bringing together diverse parties in innovative collaborations. He devises simple approaches for complex matters to achieve successful outcomes. A graduate of Georgetown and Temple Law School, he currently serves on the board for AFP Shenandoah Valley Chapter, the AFP International Education Advisory Council, and the Virginia FundRaising Institute's Planning Committee. He has been a long-time board member for Big Brothers Big Sisters of Harrisonburg & Rockingham County, Virginia.
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