When Christy Tustin was sending out checks recently, she started wondering if the community realizes the power of endowment funds for local and area charities.
As executive director of the Golden Belt Community Foundation (GBCF), Tustin and the board of directors determine amounts available for payout every year.
Most recently, $98,163 was available to be paid to organizations.
“While a majority choose to receive their endowment-payout check right away, others choose to leave the money in the fund so it will grow even faster,” Tustin said. “The decision is entirely in the hands of each organization.
“If they choose to receive a check, there are no restrictions,” she added. “The money can be spent on whatever they determine is in the best interest of the people they serve.”
An endowment is a permanent fund created for the benefit of an organization. While the principal grows over time, interest earnings are available to the organization annually.
“This is a strategy that works,” Tustin said. “These endowed funds increase annually to help guarantee the long life of the organizations.”
Agencies with endowments do not have to apply for the money or write a grant. It is automatic each year.
Payout amounts are based on several factors. These include: the amount of the fund; the financial market; and the spending rate set by the GBCF Board of Directors.
Giving Tuesday has become a major factor because of matching funds from sponsors that allow endowments to grow even more.
Tustin acknowledged that when endowments are in their infancy, annual payouts can be small.
“We just ask organizations to consider the broad picture,” she emphasized. “Yes, some payouts may seem small at first glance. But it is money they didn’t have before that can be used today or allowed to continue to grow.
“This growth comes with time but it also helps ensure the future financial health of an organization. Donors can be assured they are making a difference today and far into the future. Endowments last in perpetuity.”
Locust Grove Village, a non-profit, continuing care retirement community in La Crosse, chooses an annual payout for services and equipment directly related to resident care. And its endowment continues to grow, said Administrator Charlotte Rathke.
“When we were expanding our resident services in 2012, we knew we needed to create a fund-development plan,” Rathke said. “In the nursing home we have been reliant on Medicare and Medicaid but because of the uncertainties in health-care government funding, we needed a plan. Part of this plan is an endowment fund.”
The Locust Grove Board of Directors started the fund with $5,000 in 2012. As of the end of last year, it had grown to $39,762.
While the endowment is crucial to the long-term health of Locust Grove, Rathke noted it is only one part of a multi-faceted fundraising plan. She explained that planned giving of money and assets, memorials and immediate-need fundraising efforts also are included in the plan.
“We want to give our donors as many opportunities as we can to donate,” she added. “An endowment must be one of those opportunities. If you don’t have an endowment, you are being short-sighted.”
Almost Home Inc., a non-profit Great Bend facility for senior residential care, started an endowment when it opened in 2014 with $5,000. Today, it is over $100,000.
“Our first goal was $100,000 and we accomplished that during last year’s Giving Tuesday,” Executive Director Leilani Schenkel said. “Now we would like to see it grow to $200,000.”
Instead of accepting an annual payout check, Almost Home sometimes leaves the money in the fund so it will grow even faster. “It will always be a source of income,” Schenkel said. “We are extremely glad we did this. It gives us a vehicle to let growth occur annually.
“And it will be sustainable throughout the years ahead. We are eager to see it grow on behalf of families who will need Almost Home into the future.”
Almost Home offers full-time residential care, adult daycare, respite care and end-of-life care.
Both Schenkel and Rathke noted that the GBCF staff is always available for questions, as well as educational materials and workshops. They encourage those who want to learn more to contact Tustin by calling 620-792-3000.