Securing Long-Term Sustainability
Securing Long-Term Sustainability
What Is An Organization Fund?
An organization fund is a financial reservoir established by a nonprofit or charitable organization. These funds are most often set up as one of two types: a future-focused endowment whose principal balance remains intact, or a spenddown account that can be drawn down like a checking account to help with short- and medium-term expenses,
Once a fund is established, it is invested alongside the Foundation’s comprehensive investment portfolio. Income generated from these funds can provide organizations with reliable and perpetual source of income to cover expenses like salaries, utilities, supplies, and program costs, ensuring smooth operations.
What are the Benefits of Organization Funds?
Financial Predictability
Depending upon how assets are allocated, maintaining funds provides reliable income, ensuring continuous support amidst funding fluctuations.
Mission Alignment
Organization funds directly support the nonprofit’s mission, maximizing impact and meeting community needs.
Transparent Accounting
Separate accounts ensure easy tracking, promoting transparency and compliance.
Autonomy and Flexibility
Control over funds enables autonomous decision-making and quick adaptation to needs.
Long-Term Sustainability
Organization funds support operations and ensure commitment fulfillment for long-term sustainability.
Professional Management
Larger organizations, like the Foundation, historically offer experienced investment professionals for better performance.
Diversification
Access to diverse investment options reduces risk across sectors.
Economies of Scale
Pooling resources lowers costs and provides access to exclusive opportunities.
Access to Expertise
Smaller organizations traditionally benefit from larger ones’ insights and strategies.
Enhanced Returns
Investing with larger organizations may yield higher returns leveraging their resources and expertise.
What are the risks?
As with any manager, the risks of investing include the possibility of losing money due to market fluctuations, economic downturns, and unexpected events impacting the value of investments.
Contact Us
Interested in seeing if an organization fund could be the right fit for your nonprofit? Reach out to our team to get the discussion started.
Tammy Abshire
Interim VP of Nonprofit Excellence
