Raising restricted and unrestricted endowment funds

“No single thing is more difficult than asking a donor to part with a major endowment gift for unrestricted purposes – be it now or tomorrow. “


The very act of  becoming a philanthropist in today’s environment seems to demand that donors carefully think through their motivations, capacities, mission, vision and values.  A host of books trumpet this idea…the self examined philanthropist.  And yet we know that of the very small number of gifts received by charities for endowment purposes each year, a number are unrestricted and even more are restricted in some fashion.   And from the charity’s point of view nothing could be more important than the former.  So why don’t charities work harder at raising truly unrestricted gifts?  In the federation world, funds endowing the annual campaign come as close to unrestricted as one could wish.  And for many senior leaders such funds in fact represent our highest aspiration…for many reasons…the primacy of the annual campaign is one of the oldest concept in our lexicon of fund raising ideas.  And the campaign has suffered terrible reverses in terms of numbers of givers over the last 25 years.   One can scarcely imagine where it will be 25 years hence. 


Unfortunately raising unrestricted gifts requires unique donors and unique spokesmen.  Unrestricted giving requires a leap of faith about the future of the charity, its current mission and vision, or at the other end of the spectrum someone who simply hasn’t considered the issues deeply or trusts that the institution will do the right thing.  Even restricted giving, the current golden child of permanent endowment contributions requires a committed soul, a soul who believes in the mission and the past and current leadership’s ability to execute on mission and a desire to be there for the leaders.  The lure of restricted giving and what makes it so powerful is the win/win nature of the transaction.  Both charity and individual presumably get something they really want,, unless like the Community foundation with which I visited recently, giver, gift and priority seem to come together to the benefit of the community in a way which is wholly unplanned. 


Particularly as we continue to expand our dialogue over legacy giving and extend our efforts in this area how can we assure ourselves that we are doing our best to encourage permanent giving  for unrestricted or restricted purposes, or what should we expect from our donor population as it continues to morph  in front of our eyes?


There are old truths and new..


1.     The oldest truth is that no one gives who is not asked.  There is ample evidence of this fact among pros who have been involved for many years.  But many donors who were early and continuous contributors to the annual campaign were reflexive legacy donors and simply asked their estate planner to “add something” for federation…thus producing a wellspring of unrestricted giving unfettered by purpose clauses.  Nobody ever had to ask these donors…they simply stepped up.


2.     Those who are cultivated and simply queried as to their philanthropic motivations as part of an organized campaign sometimes bring themselves along over a period of weeks or months and make much larger gifts than they thought would to begin with…see the same prominent small community’s current 40 million dollar endowment campaign I mentioned earlier.


3.     Many donors see “their” donor advised fund as a permanent endowment and for all intents and purposes have misunderstood the purpose and functioning of the fund they created with federation and or foundation.  These are really in need of education.


4.     Others get lost in the rhetoric and types of funds and literally move in reverse from the solicitor.  This kind of individual needs a simpler solicitation.


5.     For many years Jewish federation endowment and foundation activity has coexisted in the same philanthropic space as the general community foundations…sometimes a trifle competitive and sometimes more collaborative.  Permanent giving could only become a larger phenomenon in any community by collaboration on selected key fronts like joint programming for professionals in order to get the word out effectively.   The sense that we are in different universes should diminish.  Relationships should increase, we should learn from each other, we should showcase our desire to benefit the entire metropolitan community, we should take advantage of mutual training opportunities, etc.  Build relationships!



6.     The wisest do many things at once…


-they know the interests and backgrounds of their donors

-they have a real sense for community needs and can articulate them in written and visible technically attractive ways.

-they are good listeners and can help a donor achieve alignment between personal interest and community need.

-they are able to clearly articulate the profoundly Jewish nature of their organization and differentiate it from the “competition”.

-they can point their senior leadership at the most important donors

-they educate their professional advisors about the most important needs of their organizations rather than simply relying on them for professional counsel.

-when able to do so they specifically campaign for permanent unrestricted and restricted funds and minimize other kinds of giving.

-they involve and integrate into the sales team all staff members who bring something to the plate.

-they assure that the messaging for permanent funds is so clearly of prominence that no donor can miss the importance of these efforts.

-they allocate resources to marketing and development efforts for unrestricted and restricted endowment in ways that are adequate to get the job done.

-leadership makes the case internally that unrestricted and restricted permanent funds will support the budget of the overall organizational budget in ways that no other source of funding can…



So what’s actionable here?  Follow the yellow brick road and see whether the wizard of oz turns into your greatest donor and don’t be surprised if he or she turns out to be your greatest supporting foundation family, a relatively unknown widow who consistently supported the annual campaign with small gifts,  a female major donor to the campaign who truly waned to create a major scholarship campaign or a former annual campaign chair who wanted to create a fund to do something wonderful overseas or in Israel.




About the Author:

Until recently Joe Imberman was Associate Vice President, Planned Giving and Endowments, Jewish Federations of North America, a position he held for almost 15 years.  Prior, he was Endowment Director of both the Miami and Detroit Federations for a total of 18 years.  He currently manages a consulting practice for endowments and foundations and serves as Senior Advisor to FCJA, the Jewish Federation of Montreal.  He can be reached at Joe.Imberman@gmail.com.