Posted: March 19th, 2021

Week 11 discussion responses

Write a response to each Discussion Post.

 Walker 11.1
            There are a lot of things that have to happen in order for an endowment to be authorized and organized. The donor program has to be very strong and there has to be an agreement between board members, staff, and volunteers that the organization needs to stay open for at least 50 years.  Once the board agrees to support this type of fund the next steps include decisions on policies about the money. These policies deal with interest rate, interpretation of use, invasion, gift acceptance, and investments (Klein, 2011). The process of an endowment takes some time initiate and it also takes a lot to keep up with. Decisions on gaining donors and campaigning to keep the endowment alive are the contributing factors after it is put in place.  A negative of starting an endowment is the perception it portrays. When donors see a large endowment associated with an organization they may place their money elsewhere because they perceive the organization to be well off. Another issue is, donors may choose to only give to the endowment rather than other costs ( Klein, 2011).

 Leger 11.1
It would be beneficial for organizations to have an endowment for their organization for the ongoing operating costs.  They can use the interest income to finance those costs.  The main questions to ask your organization if you do not have a legacy fund are: Is the organization ready?, Do you have the necessary expertise?, and What are the fund goals and uses? (www.grfcpa.com).  It can take a lot of time and resources to establish and gather legacy funds, but in the end all the hard work will be worth it.  There should only be one or two people in charge of the money that comes in so the organization knows the money is being put towards what it is supposed to.  The article on grfcpa.com also suggests that you should not use phone calls as a way for requesting these funds.  I do not think having a significant endowment would impact the willingness of funders to award grants, especially if the nonprofit is continually doing what they are set out to do and/or doing more.

 Kagwi 11.1
Clark, (2012) describes a capital campaign as a large event that has a specific purpose of generating funding for an identified selected need. These types of campaigns are usually extensive are require rigorous planning due to their need for attention to detail and organization, Clark (2012).
Santicola, (2006) adds that the ultimate way to identify a need within the organization that would require this type of funding is through strategic planning. This plan will lay out the goals and vision of the organization for the upcoming 3 to 5 years; after which a need will be determined. According to the author, this is the initial phase of the process. The next step is to determine the cost of implementing the need, for instance purchasing building for transitional housing project, as well as the cost of raising funds to meet this need.

 Jenkins 11.2COLLAPSE
      In the article of Santicola, (2006), where she suggested various stages or steps to follow when an organization need to raise fund for capital project, which is usually referred to as ‘Capital Campaign’. She suggested that organization must have a strategic plan to follow in order to succeed in the campaign. One important strategy she mentioned in her article is for an organization to do a feasibility study to know what it will cost to create a facility and how much it will also cost to raise the funds to build the facility. This strategy comes in line with what Klein, (2016) said in her book that “using a time-limited intensive strategy to raise that kind of money through giving campaign”. What this basically means is that before an organization embark on capital campaign journey, strategic plan should be drawn in order to know the direction. This is basically what Santicola’s article is all about.