Nonprofit organizations provide essential services to our communities, stepping in to ensure people are housed, clothed, fed and feel safe. Yet, many nonprofits are surviving on limited resources. They must focus on running their operations, managing volunteers and communicating with donors, all while continuing to serve their clients. While many organizations are extraordinarily effective in balancing these conflicting priorities, they often rely on small annual gifts and are unable to focus on critical planning for long-term growth and sustainability. The thought of getting away from their operational responsibilities to focus on building for the future may seem like a pipe dream.
Low endowment balances, coupled with a lack of understanding on the part of nonprofit boards regarding the importance of planned giving, can lead to programmatic instability. Endowments enhance financial stability while allowing charities to focus on delivery of quality programs. The organization becomes more effective when boards and staff can work together to build the needed capacity to develop planned gifts.
Since 2005, the Arizona Endowment Building Institute has been laser-focused on addressing that challenge. AEBI, currently managed by the Arizona Community Foundation, offers tools and educational opportunities for Arizona nonprofit organizations that are looking to develop and implement their own endowment-building programs.
AEBI’s structured curriculum provides each participating organization with a team of mentors to train board members, assist with developing policies and implement a specific plan of action. AEBI alumni also receive ongoing support for their programs to ensure long-term success. It is ACF’s Advanced Track for nonprofits with serious interest, capacity and resources to build an organizational endowment. Beginner and intermediate tracks, the Planned Giving Basics 100 and 200 series, offer an introduction to endowment building and assist participating nonprofits in preparing for future application to AEBI.
During the 11-month AEBI program, nonprofit staff are paired with experienced volunteer AEBI mentors — development professionals or estate planning experts — and together they attend regular training sessions. In order to provide personalized instruction, each class is intentionally small and focuses on four or five participating nonprofit organization teams. All participants pay a $5,000 fee that covers instruction, data screening and the course textbook.
Gifts from the estates of individuals who feel connected to the nonprofit’s mission are often the largest gifts an organization will receive. To cultivate estate gifts, nonprofit organizations must be prepared with:
- Appropriate policies that assure the funds will be utilized and nurtured for the future;
- An understanding of who may become endowment donors;
- A case for supporting endowment;
- An overview of planned giving programs and the types of gifts that will build endowment;
- An understanding of how to cultivate, market and steward endowment gifts;
- A plan to report and measure success; and
- The ability to engage and involve board members.
Over the course of a year, the AEBI curriculum guides nonprofits through all these components and processes. After completing the program, organizations will have the necessary tools, resources and knowledge to move ahead with endowment building.
To date, more than 60 nonprofit organizations have taken advantage of this opportunity. Many of the organizations that have completed AEBI share the following characteristics:
- 10 or more years in operation,
- Successful annual fundraising programs,
- A donor and volunteer database with 1,000 or more contacts to consider planned giving,
- A record of effective fiscal management over several years,
- Regular communication with constituencies,
- A team of staff members responsible for implementing the AEBI program’s assigned tasks,
- Board members and executive leaders willing to participate in AEBI, and
- Resources to cover the $5,000 participation fee.
“AEBI helped us to prepare for our first, targeted efforts to secure endowment funds to support our work, through planned giving and other principal gifts,” says Stuart Graff, president and CEO of AEBI participant the Frank Lloyd Wright Foundation. “As a result of this work, and the knowledge that we gained through the institute, we have successfully activated these programs — and received the largest individual gift in our history. We’re grateful to the team at ACF for leading this program and building a culture of philanthropy across our community.”
“AEBI really helped our organization focus on creating and implementing a planned giving/ endowment program,” says Devonna McLaughlin, chief executive officer of AEBI participant Housing Solutions of Northern Arizona. “We didn’t know how to start. AEBI provided the road map that allowed us to create a Legacy Society and the support we needed to identify donors who already supported our organization. Because of the help we got through AEBI, endowment building is now a strategic focus for our board and our organization.”
AEBI Participating Organizations
These are some of the nonprofit organizations that have taken advantage of the learning offered through the Arizona Endowment Building Institute:
- Banner Health Foundation
- Big Brothers Big Sisters of Central Arizona
- Boys and Girls Club of Metro Phoenix
- Child Crisis Arizona
- Desert Botanical Garden
- Free Arts for Abused Children
- Herberger Theater Center
- Lowell Observatory
- Musical Instrument Museum
- Phoenix Zoo
- Prescott Meals on Wheels
- Sedona International Film Festival
- St. Mary’s Food Bank Alliance
- Yavapai Humane Society
- Valley of the Sun United Way
Kristen Mihaljevic is the director of AEBI and the senior director of Planned Giving at the Arizona Community Foundation, a statewide family of charitable funds supported by thousands of Arizonans.
Did You Know: AEBI is ACF’s Advanced Track for nonprofits with serious interest, capacity and resources to build an organizational endowment. Successfully activating the program, the Frank Lloyd Wright Foundation received the largest individual gift in its history.