Nonprofit Agency Endowment Fund
Nonprofit Agency Endowment Funds
A Nonprofit Agency Endowment Fund at the Community Foundation of Anne Arundel County (CFAAC) is a powerful way for your organization to ensure long-term financial stability and sustainability. With a minimum of $25,000, your nonprofit can establish a named endowment fund—honoring your organization, a major donor, or a name that reflects your mission.
Your organization can continue to grow the endowment over time. Contributions to the fund remain an asset on your organization’s balance sheet, even though CFAAC holds and manages the fund on your behalf.
Benefits of partnering with CFAAC
- Professional Fund Management: CFAAC invests and safeguards your endowment to support your organization’s future needs.
- Administrative Support: CFAAC handles all reporting to the IRS and the State of Maryland, provides quarterly financial statements, and manages distributions.
- Transparency and Access: Your organization receives detailed quarterly reports on gifts, grants, fees, and investment returns—and can access fund information anytime via our online portal.
What are the benefits of an endowment fund?
- Ensures your long-term success, providing your donors with even more confidence in your organization.
- Alleviates the burden of investing and administrating your endowment. Your assets are invested to achieve long-term capital growth while a portion of your fund will be distributed annually to your organization for vital programs and operations.
- Offers your organization the ability to accept complex assets such as stocks, real estate, and mutual funds into your fund.
- Provides your organization with expertise in local philanthropy and a dedicated partner focused on helping you achieve your long-term goals.
- Expands your audience for contributions.
CFAAC also offers organizations the option to start with a Designated Fund as a flexible first step toward building a permanent Endowment Fund. This pathway can help your organization gradually build toward long-term sustainability while benefiting from professional investment management. For more information or to discuss how to establish an endowment or designated fund, contact: John Rodenhausen, Director of Planned Giving at john@cfaac.org.
Why Establish a Nonprofit Agency Endowment Fund at CFAAC?
Building a permanent endowment is a critical step in ensuring your nonprofit’s long-term success. An endowment fund at CFAAC will assure your donors that they are contributing to a stable, growing organization, and to a purpose that will endure forever. If your organization should ever cease operations, CFAAC will redirect the income
of the endowment to a nonprofit with a similar purpose.
Nonprofit Agency Endowed Funds are invested in CFAAC’s Long-Term Growth pool for maximum return with reasonable financial risk. Your organization’s endowment is pooled with the overall assets of CFAAC, which reduces investment management costs and allows exposure to sophisticated investment vehicles. Over time, your endowment should grow as the result of better-than-average investment results and low management fees.
An endowment provides a constant source of income for your organization. Distributions to your organization are made annually according to CFAAC’s spending policy.
CFAAC’s current spending policy rate is 4%. All income above fees accrues to your endowment. You may elect to receive your annual distribution or reinvest it to the principal to allow for continued growth.
Through CFAAC’s promotional efforts, your organization’s endowment will be publicized throughout the community. Your organization will also become a CFAAC partner for community fundraising efforts such as Endow Maryland.
Endowment Calculator
Our Endowment Calculator is a useful tool for donors and advisors to project the growth and potential grantmaking capacity of an endowment over time.
IMPORTANT: The results provided by the Endowment Calculator are intended for illustrative purposes only and are not guaranteed. The illustration should not be relied upon nor deemed as endowment fund advice. The investment projections, outcomes and other information generated by the Endowment Calculator are hypothetical in nature, are based on the Community Foundation of Anne Arundel Counties investment goals and policies, and may not reflect actual investment results. Results may vary with each use and over time, and they are not guarantees of future results. Projections assume annual return of 7%, supporting fees of 1.00% and an annual distribution rate of 4.0%. Supporting fees vary by fund. No market value averaging formula is being used. Formulas assume one distribution per year.