A lot of ‘NONPROFITS’ are desperately trying to attain ‘SUSTAINABILITY’.
“If we just had an ENDOWMENT that covered all of our operating expenses, we wouldn’t have to do that (dirty) FUNDRAISING thing anymore.”
What if, instead, you stopped worrying about ‘SUSTAINABILITY’… and started putting yourself out of business! Find SOLUTIONS to the PROBLEM, and then implement that SOLUTION to eliminate the PROBLEM.
I realize this doesn’t work for everyone reading this (education institutions, etc.) but this idea applies to everybody especially as it relates to the following: If you are willing to go one more (RADICAL) step further.
ENDOWMENT IS NOT THE GOAL
This is an issue that I believe impacts all FOR IMPACT ORGANIZATIONS. We’re caught up in an endowment arms race. We’re communicating that “We need ENDOWMENT now to build and preserve ENDOWMENT for future generations.”
Endowment, in and of itself, is NOT the goal! The goal is and always should be around Saving Lives, Changing Lives, Impacting Lives, etc.
And if that doesn’t get your attention, how about:
NO MORE CASH FOR ENDOWMENT
CASH is a very, very expensive and difficult way to increase endowment.
Very few investors want to give you their money… so you could invest it… with an average of 5% return… which would then be used to fund some important priority.
Here’s a pretty simple way to look at it: A 5% IMPACT vs. a 100% IMPACT.
Money to endowment (5%)… or money to fund people, programs, and places that help deliver your impact… now (100%).
*Plus, many of these investors are making five-year commitments/payments and have to ‘wait’ to see the results and actual use of the funds.
Note: As a serial entrepreneur and someone who works with a lot of business and social entrepreneurs, I would ask this question:
Would a great business or business model… one that is growing and scaling their IMPACT… take revenue (cash) and put it in the ‘BANK’ and then try to fund their growth… from their INTEREST INCOME?!!!
I want you to forget the current economic situation and let me remind you what every truly successful entrepreneur would do. They’d go to a bank or to angels or to the market and BORROW MONEY (not put money in) so that they can LEVERAGE every dollar… in order to GROW AND SCALE… their IMPACT… RIGHT NOW!