By Marianne Requarth, Director of Development, The Dayton Foundation
Most nonprofit organizations are focused on meeting today's needs. Between serving clients, fundraising, managing programs and responding to new challenges, there is rarely enough time or resources to do everything that needs to be done.
That's one reason conversations about endowment building and planned giving are often pushed aside. Yet the generational transfer of wealth that is underway presents an opportunity that nonprofit organizations should not overlook.
A study commissioned by Philanthropy Ohio, The Dayton Foundation and community foundations across the state estimates that $618 billion will transfer from one generation to the next in Ohio over the next decade. In Montgomery, Darke, Greene, Miami, Preble and Warren counties alone, an estimated $75.6 billion is expected to transfer by 2035.
For nonprofits in our region, the potential for future contributions is significant.
If just 5 percent of that transferred wealth were directed to charitable causes, it would result in approximately $3.7 billion in new charitable resources. If those dollars were placed in endowed funds with a 4 percent annual spending rate, they could generate an estimated $148 million in distributions each year in perpetuity, without accounting for future growth.
While annual fundraising remains critical, endowment funds provide something different: a permanent source of support for an organization's mission. Endowment earnings can help organizations navigate economic uncertainty, respond to community needs and provide a stronger financial foundation for the future.
Endowments also give donors an opportunity to create a lasting legacy. Many donors who have supported an organization throughout their lifetime want to continue supporting that mission after they are gone. Planned gifts, including bequests and beneficiary designations, often become some of the largest and most flexible gifts an organization receives.
Planned giving is not only about future support. Research has shown that donors who make planned gift commitments often increase their annual giving as well. In many cases, a focus on legacy giving can strengthen donor engagement and deepen relationships in the present while building resources for the future.
How The Dayton Foundation Can Help
Many nonprofit leaders understand the value of endowment building but struggle to find the time or expertise needed to develop a long-term strategy while addressing immediate organizational needs.
The Dayton Foundation serves as a resource and partner for organizations interested in building endowment and planned-giving support. Whether a nonprofit is exploring these efforts for the first time or looking to strengthen an existing program, Foundation staff can provide guidance and practical support.
Organizations that establish an Endowed Agency Fund through The Dayton Foundation benefit from professional investment management, stewardship and annual distributions that provide long-term support for their missions. Foundation staff also can help your organization develop a vision for your endowment, identify opportunities to engage donors in legacy giving conversations and better understand the charitable planning options available to your supporters.
The Foundation works alongside nonprofit leaders, donors and their professional advisors to discuss a variety of giving vehicles, including bequests, retirement assets, life insurance, charitable trusts and life income plans. In addition, donors may choose to establish their own charitable funds through The Dayton Foundation to support the organizations and causes they care about.
The transfer of wealth currently underway creates significant opportunities for organizations to have meaningful conversations about legacy and long-term impact. By combining strong annual fundraising efforts with intentional endowment-building strategies, nonprofits can create resources that support their missions not only today but for many years to come.