What is an endowment?
A commonly accepted meaning for an endowment is a fund which is invested and kept in perpetuity to provide stabilized income from earnings for the long-term benefit of an organization’s charitable cause.
Endowment donations will:
- Build a permanent fund at the Community Foundation for Mississippi (CFM) that will give forever.
- Grow as the money is invested by the CFM to maximize returns.
- Provide grants for the charitable purpose stated in the fund agreement.
- Contribute to a better quality of life for our community.
Benefits of endowed funds:
- It’s a gift that gives forever!
- It creates a predictable source of income for the beneficiary nonprofit, church or school.
- It is invested and managed with professional oversight.
- It allows your organization to focus on your mission instead of fundraising.
- It provides tax-deductible donations under federal tax law.
Frequently Asked Questions
Many use the terms interchangeably, but they really are two separate things. An endowment is an independent fund managed by your local Community Foundation for a nonprofit organization, church or school – as their charitable retirement account. An endowment can be set up at any time.
Planned giving is the process of donating a planned gift, where contributions that are arranged in the present and allocated at a future date (usually after death). The endowment can be funded with planned gifts and is especially appealing to donors due to the multiple benefits of tax savings.
- FIRST: Meet your current operating needs.
- SECOND: Have operating reserves.
- THIRD: Build an endowment to become financially healthy!
- Those who love and trust your organization.
- Reliable annual donors.
- Current & Past Board members.
- Those who are legacy-minded and want to leave a gift that gives forever.
- We are an accredited Community Foundation.
- Have been in existence for 25 years.
- We currently manage 250 funds and $62 million in assets.
- We have a professional finance & investment committee.
- We can accept gifts that are complex in nature.
- We can help you grow your endowment.
- We process all gifts including sending a tax-deductible receipt
- We hire an independent CPA firm to conduct an annual independent audit and prepare our annual IRS Form 990
- We follow all state and federal regulations.
- Donations of $1,000 or more to an endowment at Community Foundation for Mississippi are eligible for the 25% Endow Mississippi state tax credit. This tax credit is only available to donations to endowments at qualified community foundations in Mississippi. Learn more here.
- Charitable Bequest (in will)
- Life Insurance Policy – beneficiary designation
- IRA / Retirement Plan – beneficiary designation
- Real Estate
- Charitable Remainder Trust
How to talk to potential donors about planned giving:
Planned giving mistakenly gets a reputation as a taboo subject. You don’t have to talk about death, dying or diverting assets from family heirs. A legacy society allows you to focus on the conversation on the present – while still talking about the future. Here’s how to start a conversation:
- “The needs of this community are ongoing and growing. A legacy gift ensures that our organization will not only be around for years to come, but will also be well equipped to fulfill those needs.”
- Next Generation: “Legacy gifts ensure the well-being of future generations and serve as an inspiration to others to do the same.’
- “You understand the importance of preserving our rich heritage and cultural identity. Legacy gifts provide you a meaningful way to ensure your gift meets the needs (of what they are passionate about) forever!
- Personal Legacy: “Becoming a member of the Foundation’s Legacy Society ensures that the issues you care about and the values you cherish will be long remembered.”
Benefits of giving via a will:
- Your assets remain in your control during your lifetime.
- You can modify your bequest if your circumstances change.
- You can direct your bequest to a particular purpose (be sure to check with the CFM to make sure your gift can be used as intended).
- There is no upper limit on the estate tax deductions that can be taken for charitable bequests.
- A properly drafted Will allows you to minimize death taxes and other costs.
- You can have the satisfaction now of knowing that your bequest will support your community and favorite charities in the way you intended.
Want to learn more about endowments? Give us a call at 601-974-6044 or email Theresa Erickson at firstname.lastname@example.org.