Endowing the Gift
Here’s an idea you will want to be certain to pursue.
Increasingly, I’m finding donors who are willing to endow their annual gift. But they need to be asked.
Take Paul, for example. He’s been giving to his hospital for seven years. His gift is $10,000 a year.
We were conducting an audit of the development office for the hospital. When I looked at Paul’s record, two things came to mind. I suspect you’re thinking the same.
Number one, isn’t it wonderful that Paul has been a regular donor for seven years. And $10,000 is a significant sum.
My second thought was that I was almost certain that during those seven years, no one has asked Paul and Lois to increase their gift. That’s why it has remained at $10,000. Shame on the staff!
Our approach to them now was to ask them to endow their annual gift. The conversation went something like this.
“Lois and Paul, you have been such great friends and supporters of the hospital. Your gift means so much to us. We would like you to think about the possibility of providing that gift forever, in perpetuity.”
“Wow, I hadn’t thought about doing anything like that,” says Paul. “How much will it cost? That might be too expensive.”
“For a gift of $200,000, your annual gift will go on forever. Think of the lives that will touch because of your benevolence.”
Paul and Lois decided to make the gift of $200,000 for the Endowment.
Here’s how the arithmetic works. Figure a 5% return on the endowment. It could be more. It could be less. That’s about what we’re figuring these days.
Take the annual gift you want to have endowed, and multiply it times twenty. In the case of Paul and Lois, that was $200,000. At 5%, that yields $10,000 a year.
I got the idea from our work with the Tocqueville Society. That’s the United Way’s circle for $10,000 donors. The program has been hugely successful. There are thousands and thousands who now belong.
The problem is that we can’t get them beyond their $10,000 annual level. We started talking to these folks about endowing their $10,000 gift. It worked.