Starting and Building an Endowment: Questions to Ask

Source: Walter Dillingham, CFA, Wilmington Trust

1. What is the objective of the new endowment or reserve fund, and does it connect to the mission?
   Clearly defining the purpose of an endowment or reserve fund helps ensure it supports the long-term mission and ministry. Is the goal to provide stability during uncertain times, support scholarships, sustain ministry programs, maintain facilities, or fund future growth? A well-defined objective gives donors confidence that their gifts will have a lasting impact and align with the values and vision of the organization.

2. Have you set an endowment goal for the endowment?
   Establishing a financial goal helps create focus and direction for building the fund. Consider what amount would generate meaningful annual support for ministry or operations through investment earnings. Having a target also allows leadership to measure progress, communicate vision to donors, and create momentum around growing the fund over time.

3. Do you take a holistic approach to growing your endowment by including fundraising and investing strategies?
   Successful endowments require both strong fundraising efforts and thoughtful investment management. This means creating opportunities for current gifts, planned gifts, and legacy giving while also ensuring the assets are invested responsibly for long-term growth. A balanced approach helps preserve the fund while generating future income to support ministry and mission.

4. Have you developed a windfall policy that details how larger unrestricted gifts will be added to the endowment?
   Unexpected or larger unrestricted gifts can provide an important opportunity to strengthen long-term financial sustainability. A windfall policy helps leadership make intentional decisions in advance about how much of these gifts should be directed toward reserves, endowment growth, debt reduction, or current needs. Having a policy in place promotes transparency, consistency, and good stewardship.

5. Do you highlight the different endowment options to your donors on your website and provide details?
   Many donors are interested in leaving a lasting legacy but may not know the options available to them. Providing clear information on your website about named funds, scholarship endowments, legacy gifts, memorial gifts, or planned giving opportunities can help donors better understand how they can participate. Sharing stories and examples of impact can also make these opportunities more meaningful and accessible.

6. Have you developed a communication plan for stakeholders that explains the importance of the endowment for the future?
   An endowment is not only a financial tool — it is a statement about long-term commitment to the mission. Consistent communication with donors, church members, board members, and stakeholders helps explain why building the endowment matters. Sharing updates, success stories, financial growth, and the future impact of the fund can build trust and encourage continued support.

7. Are you ready for donor questions on why you need to start or expand your endowment?
   Donors often want to understand why an organization is focusing on endowment growth instead of current needs. Leadership should be prepared to explain how an endowment creates long-term stability, supports future ministry, and helps sustain the mission for generations to come. Being able to clearly articulate the vision, goals, and stewardship practices behind the endowment helps build donor confidence and engagement.