Establish A Nonprofit Endowment Fund
Nonprofit endowment funds support your nonprofits work now and forever.
How Do Nonprofit Endowments Work?
Your organization's endowment gifts are pooled with the Heart of Illinois Community Foundation's assets. This practice allows for the benefits of diversification, mitigation of risk and lower fees. All assets are under the oversight of our experienced Board and Investment Committee. Nonprofits work with us to increase their financial stability and increase their donors' confidence.
Each year, a distribution is available for your nonprofit organization to meet your ever-changing needs, empowering your nonprofit organization for opportunities like enhancements of facilities and equipment, long-term planning, responding to unmet needs, or meeting an unexpected shortfall in normal operating support. Over time, with gains in market performance and additions to your fund, your distribution will grow as well.
For more information, contact Missy Batman, HICF Vice President, at 217-429-3000.
Endowment Frequently Asked Questions
An endowment at the Heart of Illinois Community Foundation is a simple, safe way for your nonprofit organizations to create a permanent and predictable source of funding. The Community Foundation handles all the investment management and administrative details while the nonprofit organization enjoys an annual distribution, allowing staff and volunteers to focus on their mission.
An endowment is a commitment to hold the principal of a fund in perpetuity in order to generate earnings that will benefit a charitable use. Earnings from the endowment over time provide a steady income stream, supporting your nonprofit's programs and services forever.
A nonprofit organization committed to providing service over the long haul should consider building an endowment. Organizations formed in support of short-term causes or particular events, that lack a broad donor base, or that are relatively new, are unlikely candidates for an endowment.
A healthy nonprofit should have a fully accessible operating reserve account which covers between three to six months of its basic expenses. An endowment, on the other hand, is a fund where only the earnings on the fund, not the principal amount, are available for disbursement.
You could, but consider why you may not want to: The Foundation's economies of scale provide your organization the benefits of a diverse investment portfolio, such as solid total returns and low investment fees that typically come only with very large funds. Many boards have members with investment expertise, but while endowments and the Community Foundation are forever, your board members are not.
- Your nonprofit determines the amount your organization would like to invest in an endowment then works with the Heart of Illinois Community Foundation to complete a fund agreement.
- The fund minimum is $20,000.
- Community Foundation staff and their investment committee handle all administrative details including investment management.
- Your nonprofit can add to your endowment at any time. Donors can also be encouraged to contribute through current or planned gifts.
- Your fund is invested to grow over time, and a portion of the earnings up to 5%, as determined by our spending policy, can be returned to your organization annually.
- The 1% annual administrative fee is reinvested back into the community to support our services, including gift planning expertise, gift processing and acknowledgement, fund accounting and statements, compliance, grantmaking programs, capacity building educational courses, and more.
