An agency fund is created by a nonprofit organization to benefit its operations, program or capital needs. Ideally, every nonprofit should have a reserve fund of at least six months of operating funds. Once that is established, the Board and staff should seriously consider developing an endowment.
- It creates an ongoing (and growing) source of income. Because a permanent endowment is an invested pool of money that provides a reliable source of income in perpetuity, the organization can count on annual distributions for its charitable work.
- It enhances stability and prestige. An endowment sends a message of planned long-term stability, fiscal responsibility, and financial viability. It enhances the organization’s prestige and credibility.
- It relieves pressure on the annual fund. Annual Fund goals tend to rise right along with the cost of providing services and operating the organization, but the ability of the annual fund to meet increasing demand is not limitless. An agency fund endowment can provide annual support for the organization’s operating budget.
There are many benefits of a nonprofit organization (Agency) building an endowed Agency Fund with the SCVF including:
- access to SCVF disciplined, multi-asset investment program;
- The opportunity for increased public recognition;
- and long-term stewardship of your assets.