Greater Lowell Community Foundation

Personal Stories

Belinda Juran and Evan Schapiro: Helping to Maintain and Grow the Merrimack Valley’s Rich Cultural Tradition

Belinda Juran and Evan Schapiro

As residents of the Merrimack Valley for the past 25 years, Belinda and Evan often took advantage of the rich and diverse cultural opportunities that the region offered. Unlike Boston, where the scene is dominated by large cultural institutions with a large donor base, the Merrimack Valley's arts scene typically consists of a more diverse group of smaller and less well-known organizations. So, Evan and Belinda were especially surprised to learn that the Merrimack Valley did not have a permanently endowed Arts Fund dedicated to the support of local cultural organizations. MORE

Peter S. Stamas: Dedicated to Education in Lowell for 17 Years

Peter Stamas

Peter’s Passion: Education and civic involvement.
As headmaster of Lowell High School for 17 years, Peter shaped the minds of Lowell’s future leaders and led by example. He believed community services was the way to better our region’s quality of life. More...

Frequently Asked Questions

Who gives to endowments?

Endowments are attractive to individuals, families and organizations that want to create long term annual support for the causes they care about most.

Will having an endowment conflict with current donor's giving?

Annual appeals target current year needs; endowments provide annual support every year. Experience has demonstrated that dedicated donors do not choose among ways to support their favorite charities, but frequently participate in all of them.

What's the difference between an endowment and an operating reserve?

An operating reserve is a board-designated fund, which may act like an endowment because an organization chooses not to touch the principal. Principal is available to meet emergency needs should the board choose to use it. Usually operating reserves are managed and invested by the organization's staff and board. An endowment, on the other hand, is a fund which has a principal that the organization is not able to invade. Sometimes this can be accomplished only by placing the endowment outside the reach of the organization.

How does an endowment fit into an overall organizational financial plan?

To be healthy and stable, an organization needs to meet its current operating budget without exerting 100% of its resources. In addition, an organization should have an operating reserve account, which covers somewhere between half of all of its annual expenses. Then, based on some fundamental criteria for definition of endowment donors, it is ready to consider endowment fund-raising.

Should all organizations have an endowment?

No. Organizations, which are formed in support of short-term causes or particular events, do not need endowments. Similarly, organizations which are in financial crisis, do not have a donor base, or lack any credible record of accomplishments are unlikely candidates for an endowment.

What happens if we have an emergency and need the endowment money?

Agency funds are not intended to be invaded, but to provide a stable source of operating revenue. Nonprofits are encouraged to build their own operating reserves to address emergencies. Annual endowment distributions could help to establish such operating capital and emergency reserves funds within your organization.

What is the legal definition of endowment?

There is no legal definition. The commonly accepted meaning for endowment is a fund which is kept in perpetuity to provide interest and dividend earnings for the benefit of the organization’s charitable cause. While the Community Foundation holds income-only endowments, it typically spends 5% of income and principal to insure payouts to the nonprofit agencies and other charitable beneficiaries during good times and bad, and relies on growing values over the long term to provide perpetual support for its beneficiaries.

Is an endowment the same as a planned giving program?

Many use the terms interchangeably, but they really are two separate things. Endowment funds are grown over the long-term to provide a long-term source of annual income. Donors make long-term plans through such planned giving instruments as bequests, paid-up life insurance, charitable gift annuities and charitable remainder trusts to benefit nonprofits and their endowment funds.

Should we set up our own foundation to hold the endowment?

The creation of a new nonprofit to hold an endowment appears to solve the problem, but in fact does not provide any greater insurance for the protection of principal than board designation. Directors of separate foundations may invade principal when emergencies arise. In addition, the costs involved in maintaining two separate charitable organizations may erode a good portion of the earnings that would otherwise be directed toward the charitable activity. This is why working with the Community Foundation can have so many benefits to an organization.

What happens to our endowment if our organization goes out of existence?

For endowments that are held and managed by nonprofit boards, it is unlikely that an endowment will survive if an organization fails. Community Foundations make nonprofit agency endowed funds inaccessible to creditors so the fund can continue to support other closely related nonprofit activities in the community.