Just like any other business, non profit organization can face a lot of problem especially with regards to financial status. Usually holding a fund raising activity is one way to earn money but sometimes this is not always the solution. Often times an organization’s funding too much depends on events. Members of non organization are thinking of ways to be able to combat some common nonprofit problems that they are facing. Developing endowment funds and planned giving campaigns are some answers to some nonprofit problems. Any non profit organization must first identify the problem that they have. This way they will know what kind of strategy they many want to take.
One of the roles of the board of a certain organization is provide a service that coincides with their mission. In order to fulfill its duty it needs first to set their priorities. They also need to assess if the solution to their problem can be able to handle the priority.
Endowments
Endowments are one the answers to the problem of funding needs. When raising an endowment it means that you will tap donors to be able to provide resources for future activities. The first thing that you need to remember is that when you ask for endowment, it should be a gift and not to be spent for other use. The second thing is to allot an adequate income in order to maintain the value of it given the fact that it can be subjected to inflation. The income that is left is the only money eligible to support the operation of the organization. The rule is that the support should only be 5 percent of the endowment. If you think about it, sometimes endowment is not enough to give financial support to any organization. The best funding solution is the fact that it can sustain the organization’s ability to do its service the whole year round. Although endowment strategy is good idea it is not enough.
Planned Giving
Another solution to a common non profit problem is planned giving. It is a program suitable for the future of organization. The amount of money that can be received in this program is hard to determine. You may never know how much a person is willing to give despite the fact that a will has been established. Sometimes there will be changes to the will is cannot be known to the organization.
For any non profit organization, it bad idea to plan about getting this kind of gift. From this point of view, planned giving may deemed to be irrelevant in solving non profit organization dilemma. These planned giving campaigns do not happen without any effort from the organization itself.
Remember that non profit organization needs to have a stabilized source of funding to be able to address this problem and for their further operation. Fund raisings are not enough and other solutions like endowments and planned giving can serve as a back up for this common problems.
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