| by Cynthia M. Adams, CEO, GrantStation
Initial Decision-Making: The Fund's Structure and
Management
Part Three
Once we established why we wanted to create an endowment
fund, we then asked ourselves how the fund should be structured
and managed. This question had already created quite a debate
amongst the Advisory Board, as well as the full Board of
Directors. Everyone had an opinion - but no one had much
information on which to base those opinions.
My first task was to talk with other "like" organizations
across the country that had already established endowments
to determine how they managed their funds. This research
was meant to help us decide whether to manage the fund internally
or to outsource the management by establishing the endowment
fund under the auspices of a local community foundation.
I talked with a handful of organizations and, as you can
imagine, I discovered there are pros and cons for both internal
and external management. I also had a long talk and exchanged
several emails with our local community foundation. It became
apparent fairly early on in my research that developing gift
acceptance policies, reporting procedures, and investment
policies was going to be more than this relatively small
organization could handle.
In addition, I learned that the community foundation charges
an administrative fee of just 1% per year of the total amount
raised by the fund. This relatively low fee, in conjunction
with the policy and procedure concerns raised by my other
research, and the community foundation staff's responsiveness
helped make a strong case for establishing the endowment
fund under the community foundation's management.
After one last meeting of the working committee, the Advisory
Board crafted a motion based on the following template to
bring to the Board of Directors for their adoption:
Recommended Motion to be adopted by _______
Board of Directors
Whereas, it is agreed that an endowment fund is historically
understood as a perpetual fund from which only the earnings
are distributed;
Whereas, this permanently restricted endowment will
be established by donor gifts and bequests;
Whereas, the creation of an Endowment Fund will support
and enhance the mission of the ________________________________
for decades to come;
Whereas, the Fund will serve as a vehicle to attract
cash and planned gifts which people desire to leave as
a legacy for sustaining the conservation work of _______________________;
Now therefore, the Board of Directors of the __________________
moves to establish under __________________ Foundation
an Endowment Fund.
At the next Board of Director's meeting, the Board
unanimously adopted the motion.
It felt great! All the thought and consideration, research
and debate that had gone into preparing this simple vision
had paid off.
This whole process took only a few weeks. Not months! Getting
the Board to adopt our vision is not the same as ironing
out the details, but it creates a sense that the project
has momentum, and that's important for everyone involved.
Next week we'll talk about the nitty-gritty of the Memorandum
of Agreement with the community foundation. |
