WeConservePA has recently updated its guide, Endowments and More.
Endowments and quasi-endowments help organizations establish long-term financial stability. This guide explains the basics; provides links to resources that address creating, managing, and fundraising for these funds; and describes the practices of 10 land trusts.
An endowment, roughly speaking, is a gift donated to a charitable organization to provide a permanent source of income to the organization. The donor makes the gift with the requirement that only the income from the investment of the gift may be spent by the organization; the gift itself—the principal—must remain intact to ensure that income from it can benefit the organization in perpetuity.
In addition to the prohibition on spending the principal, a donor may or may not choose to place restrictions on use of the endowment’s income (e.g., it may only be used for stewardship of the organization’s conservation holdings or to fund scholarships).
The law pertaining to endowments varies by state and changes over time. There is complexity, and legal counsel should be sought to ensure that a planned endowment will operate as intended.
