An Endowment Like Grant Vs. A Regular Endowment

One grantmaker considered several endowment options before choosing to make a working-capital reserve grant. The grantee needed a source of stable income and wanted an endowment, but a close look at reality led to another choice. The grantmaker describes the decision-making process this way:

“Here was an organization [the grantee] that could really be doing more and taking more of a leadership role. And yet they were being held back — or at least they felt held back — by uncertainties over future grants. They needed to attract really top-quality professionals for the next phase [of their work], but they felt they couldn’t make a long-term commitment to people like that, given how variable their budget was."

“They came to us for an endowment, and eventually they probably need one. But when we gave them a small grant to study the fundraising potential [for an endowment], it wasn’t clear they could raise enough money just yet. Gradually, as we looked at the options with some really good advisers, we designed this “reserve fund.” And along the way, they learned volumes about what might be possible down the road — and so did I.”

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 Providing for the Long Term.