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Daily Camera

Enid Ablowitz

More Giving Decisions

Once you have decided to make a donation to a non-profit organization, consider how you want your money to be used. 

The primary fund within a non-profit is the operating fund; the money to pay the bills.  Most annual fund drives raise operating money, and it is generally unrestricted.  It can be used for salaries, the telephone bill, or programs.  These are the critical funds that allow the organization to exist. 

As the organization becomes more mature, they begin to seek separate program funds to finance a special initiative, or build new capacity.  When this differentiation takes place, donors have an opportunity to designate their gift for a particular initiative or service.

The next funding need is usually to upgrade existing facilities or build new ones.  Many times there will be a “capital” campaign, separate from the annual fund. Larger gifts are sought, and quite often, naming opportunities are offered.  Many donors find this kind of giving clear, tangible evidence of their commitment to the purpose of the organization, and enjoy the recognition of having their names associated with the organization permanently.  Consider the Getty Museum, or Carnegie Hall.  While few can create monuments on such a large scale, many can provide the funds to build a wing or a lab, or join with others to renovate or refurbish tired spaces.  In some contexts, a gift of equipment or used furniture can be just what is needed, like a copy machine or a comfy sofa for a grass roots youth outreach program.

When a non-profit has sufficient longevity, its board and donors may think in terms of a permanent income stream, and endowment funds are created.  Endowments are managed separately, and are invested for the long term.  The goal is to provide only a portion of the earnings as distributable income.  By reinvesting the excess, the theory is that, as the corpus grows,  the distribution will grow.  Endowment funds can be generic and used, to support operations, or they can be restricted for a special purpose or program.  Endowment funds can bear the donor’s name and are often called “legacy funds.”

As a donor, you have a choice, not only to what organization you want to give, but how you want your money to be used.  You can pay the bills, provide the infrastructure, or assure the longevity of the organization through gifts that continue giving in perpetuity.  Each way of giving serves an important purpose.  If the non-profit can’t meet its immediate financial obligations, the organization might not have a future.  If it has no facility, it may not be able to achieve its mission.  If it has no source of permanent funding, great effort must be redirected from the mission to the task of fundraising.

Finally, if you are a risk taker, you may feel inspired to support a “start-up” non-profit.  In that case, verify that the group has obtained their approval from the IRS (or your donation will not be tax-deductible), see the equivalent of a business plan, and make sure you have confidence in the leadership of the organization. You might find great satisfaction in being an “angel investor” in the non-profit world.

It is your money, and your choice. 

Send your questions about making charitable gifts to Enid Ablowitz, Features, Daily Camera, 1048 Pearl St., Boulder, 80302 or e-mail???/Fax????

Ablowitz, the Asst. Dean for Advancement at CU’s College of Engineering is a Certified Fund Raising Executive and has been working with donors for over a decade.  She is writing a book called Making Money Matter: 8 Steps to Thoughtful Giving.

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