Your nonprofit needs secure funding to power your programs, and it might be time to consider your financial future beyond the traditional annual giving cycle. An endowment is an excellent option for nonprofits of all sizes to establish long-term financial stability.

An endowment is a pool of assets established by charitable contributions and invested by nonprofits to provide long-term, sustainable financial support for its mission or specific programs, often as defined by the donor(s).

For example, a donor might establish a scholarship endowment at a university. Rather than spending the principal, the university would distribute a portion of the endowment’s accumulated investment earnings each year to pay for students’ education.

However, while endowments can offer perpetual funding, they also come with certain limitations and requirements, meaning nonprofits should carefully consider whether their organization is prepared to properly steward and operate one. This article will review the top four considerations your organization should assess before deciding whether to start an endowment.

A good investment policy statement(IPS) should make investment decisions easier, not harder. It should give your board clarity, protect your organization, and hold up under scrutiny.

Most nonprofits have an IPS. Not all of them have one that's actually doing its job. In our work with nonprofit organizations, we see the same problems come up again and again: documents that are outdated, too vague to be useful, or simply disconnected from how the organization actually operates.

None of these are catastrophic on their own, but they add up. And when a difficult market or a board transition arrives, a weak IPS is the wrong time to find out.

Here are the most common mistakes we see, and what to do about them.

To sustainably fund its mission, your nonprofit needs to not only encourage engagement from its supporters, but also cultivate their loyalty. Donor loyalty is built on trust, so it’s vital to instill confidence in how you’re managing your organization to make a positive impact, especially when it comes to finance. 

While developing procedures for everyday recordkeeping and regular reporting is important, effective nonprofit financial management also involves planning for the unexpected. This is where risk management plans come in. 

In this guide, we’ll walk through four steps for creating a financial risk management plan that can help see your organization through challenges that may come your way. Some of these actions can also strengthen your day-to-day procedures, helping you demonstrate that you’re using donors’ contributions as promised for a good cause. Let’s dive in!

If your nonprofit has an endowment or board-designated reserve, you’ve likely asked (or been asked) a version of this question: “How much of this can we actually spend?” 

It’s a reasonable question. But without a clear, written policy in place, the answers often vary depending on who’s in the room, how the market is doing, or what the budget looks like that year. 

That uncertainty can lead to confusion, tension, and decisions that feel reactive rather than strategic. 

A spending policy changes that. 

It gives your board and leadership team a shared understanding of how much you can draw from your invested funds each year, and helps ensure those decisions are grounded in purpose, not pressure. 

In this post, we’ll walk through what a spending policy is, how it works, and why it’s one of the most important financial tools your nonprofit may not be using yet.

The free flow of information between departments helps organizations thrive. Without it, projects hit standstills, ongoing activities get bogged down in redundancies, and strategic priorities suffer.  

This is especially true for nonprofit organizations. For nonprofits, missed targets and ineffective workflows can very quickly make the difference between a healthy bottom line (and more support for constituents) and budget shortfalls that set its mission back.

Let’s say you’re conducting a university capital campaign. Different departments take on different tasks during this complex project. Development and marketing oversee their respective activities but fail to communicate effectively both internally and with each other. Your campaign messaging becomes diluted, prospects get solicited twice, outreach becomes ineffective, relationships are damaged—several missteps combine, and you miss critical campaign benchmark goals. But this doesn’t have to be the case! 

Communication silos should and can be actively identified and broken down to ensure your organization will keep growing smoothly and reaching its goals.