Alternative Options to Supporting an Endowment

Helping a grantee establish an endowment may seem like a logical next step at the close of a long relationship. But, warned an experienced grantmaker, “an endowment is not for everyone.” Instead, he urged funders to think about providing smaller sums for more focused purposes. Some possibilities:

  • Establish an “incubation fund” that allows the organization to experiment with new ideas.
  • Support hard-to-fund “infrastructure” staff positions, such as internships or a development or research director.
  • Create a reserve fund to smooth out the budget of a grantee that relies on public funding (which is often delayed) or an uneven income stream.
  • Provide a recoverable grant that lets an organization undertake a project that could open up a new income stream, such as a special service.
  • Offer a low- or no-interest loan that enables the organization to leverage commercial funding for capital improvements.

Takeaways are critical, bite-sized resources either excerpted from our guides or written by Candid Learning for Funders using the guide's research data or themes post-publication. Attribution is given if the takeaway is a quotation.

This takeaway was derived from The Effective Exit.