The Relationship Between Charities and Endowment: Rethinking the Long View

Drawing on a substantial body of thought leadership by Academic and Education Director Gordon Cox, this article marks the third in a three-part series exploring some of the most critical and often overlooked aspects of endowment fundraising in UK charities (universities, schools, education, arts, heritage, museums, environment, health, animal welfare, international development and more).

The opening pieces focused on the importance of effective endowment management and rethinking endowment investment in UK charities; this third and final article considers endowment fundraising, offering practical suggestions and provocations for institutions ready to think beyond the next budget cycle and consider a long-term fundraising strategy.

Fundraising for Endowment: Building Donor Confidence and Long-Term Legacy

Let’s dispel a myth: people will support your institution and make charitable endowment gifts. The challenge isn’t donor appetite, it’s institutional confidence.

Making the Ask: Clarity, Conviction and the Case for Endowment

Endowment fundraising should be approached no differently than any other philanthropic ask. Whether spend-down or perpetual, the case for support remains the same: impact, alignment, and legacy.

Ask for endowment gifts with the same conviction and clarity as you would for any other donation.

Why Legacy Is Central to Endowment Giving

Endowment is about permanence. It’s about giving something that, if managed well, will continue to give forever. For donors who care about legacy, this is unmatched. Charities can endure across generations.

For many, the realisation of “what next” comes later in life, when significant giving becomes part of their story. Younger donors may believe they can achieve better returns independently, but if you appeal to their sense of community, their peers will follow.

How Matching Funds Strengthen the Endowment Ask

Using matching as a multiplier matters with endowment. Donors want to see their gift compound, not just contribute. This is why a long-term fundraising strategy is essential.

Endowment Fundraising Requires Good Donor Stewardship and Patience

Endowment gifts require careful donor stewardship, especially when you are considering donor legacy giving. A rushed agreement can create long-term complications. Activities funded by endowment income can’t begin until income is received, unless the donor also provides a spend-down gift to bridge the gap.

Charitable endowment gifts is not just possible, it’s essential.
It requires clarity, courage, and a deep understanding of what donors value most: legacy, impact, and the promise of permanence.

Endowment Fundraising: Simple in Theory, Complex in Practice

Endowment can appear deceptively straightforward, yet it is often complex, unless broken down clearly or approached holistically. This short piece highlights a few areas to consider when endowment fundraising for UK charities in your long-term fundraising strategy. Two previous articles are available, exploring management and investment in more depth.

The range of stakeholders involved can make an endowment feel almost impossible to navigate. You may think you know endowment, but there is always more to learn. There is an art to condensing its complexity into simplicity, and even the most experienced endowment fundraising operations encounter unexpected challenges.

Next Steps: Strengthening Endowment Management in Your Organisation

If you would like to explore these issues further, discuss your long-term fundraising strategy or good donor stewardship and how endowment could strengthen your organisation, I would be delighted to continue the conversation. Whether you are seeking clarity on governance, confidence in investment messaging, or inspiration for endowment fundraising , there is huge value in approaching it as a shared journey.

Email me at gordon@philanthropycompany.com.

Definitions:

• Endowment: An endowment is a gift of money that is made to an institution or community in order to provide it with an annual income. (Collins Dictionary)
• Expendable endowment: capital can be spent
• Permanent endowment: capital can’t usually easily be spent
• Capital: original gift, subsequent gifts and historic unspent income
• Income: dividends, interest, rent etc. Not just interest.
• Total Returns: Put simply, this approach allows any increase in the value of an investment to be used as income. (Charity Commission)

Article 1 – Endowment Management in Charities

Article 2 – The Case for Collective Action: Rethinking Endowment Investment in UK Charities