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Investing involves risks and you may incur a profit or a loss. Past performance cannot guarantee future results. This material is provided for informational purposes only and is not intended as an offer or solicitation for the sale of any security or service. It is not designed or intended to provide financial, tax, legal, accounting, or other professional advice since such advice always requires consideration of individual circumstances. There is no assurance that any investment, financial or estate planning strategy will be successful.

In June 2024, Giving USA reported that total giving for 2023 was at $557 billion, which although was a 2.1% decrease after inflation from the prior year, still illustrates how philanthropic Americans are even in these uncertain times.1

Despite the slower growth, one positive trend in the philanthropic arena has been the continued grantmaking of MacKenzie Scott, an American novelist who has become a key philanthropist in current times. She has an estimated net worth of $34.8 billion, owning a 4% stake in Amazon, which was founded by her ex-husband Jeff Bezos.2 Mackenzie Scott has given over $17 billion in unrestricted grants to more than 2,300 nonprofits.3

What to do with a windfall gift?

These unrestricted gifts have a significant impact on the nonprofits that receive them and can be life changing. Many of these nonprofits have received these large unrestricted funds for the first time and are exploring ways to maximize their impact. One way to plan for these unrestricted funds is to conduct an internal review of the organization’s short-term and long-term needs. On the short-term side, some nonprofits have expanded key programs and hired new staff. On the long-term side, a number of nonprofits have used these funds to start or build their quasi-endowment programs. Many are seeking best practices as they develop their game plans for the future of these funds.

In this report, we provide some background on MacKenzie Scott’s philanthropy and highlight her giving plans so far. We also discuss some best practices and review the importance of preparing a financial game plan that a nonprofit can follow.

As nonprofits start to build their current endowments and quasi-endowment plans, it is a great time to peek into the future. Many nonprofits see the benefits of having a new endowment and also set a future growth goal. There are numerous benefits of building a strategic endowment plan, which memorializes the nonprofit’s growth plan for the future, and looks at both investment performance and fundraising as possible ways to accomplish this. As part of this, it is crucial for the nonprofit to be educated on the basics of starting an endowment program, which we cover in more detail in this report.

TOP THINGS TO CONSIDER WHEN BUILDING A QUASI-ENDOWMENT PROGRAM FOR THE FUTURE

  1. Work with an experienced endowment and foundation advisor that offers a full-service, value-added approach, and has experience with emerging endowment programs.
  2. Take a financial inventory of both short-term and long-term needs.
  3. Set up a custom Windfall Policy, as part of Gift Acceptance Policy.
  4. Have a well-thought-out governance structure and process.
  5. Develop a communication and reporting strategy for donors.
  6. Develop a strategic endowment plan for the future.

Download the report to learn more about how nonprofits can prepare for a significant, unrestricted gift by having a Windfall Policy and Gift Acceptance Policy in place. We believe the most successful nonprofits develop these policies in advance, which often has helped them grow their endowments much more quickly.

Learn more about our value-added approach to working with endowments and foundations.

[1] Giving USA 2024: The Annual Report on Philanthropy; The Giving Institute; www.givingusa.org.
[2] Forbes website listing, 7/21/23.
[3]  www.yieldgiving.com.

Please see important disclosures at the end of the article.

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This article is for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service. This article is not designed or intended to provide financial, tax, legal, investment, accounting, or other professional advice since such advice always requires consideration of individual circumstances. If professional advice is needed, the services of a professional advisor should be sought. There is no assurance that any investment, financial, or estate planning strategy will be successful.

Certain information in this article was obtained or derived from other third-party sources and other elements were provided in their entirety by a third party. Such third parties are believed to be reliable, but the information is not verified, and no representation is made as to its accuracy or completeness. The opinions, estimates, and projections constitute the judgment of Wilmington Trust and are subject to change without notice. The opinions of any individual or entity within this material who are not employed by Wilmington Trust or M&T Bank are their own and do not necessarily represent those of M&T Bank Corporate or any of its affiliates.

Third-party trademarks and brands are the property of their respective owners. Third parties referenced herein are independent companies and are not affiliated with M&T Bank or Wilmington Trust. Listing them does not suggest a recommendation or endorsement by Wilmington Trust.CFA® Institute marks are trademarks owned by the Chartered Financial Analyst® Institute.   https://www.cfainstitute.org/en/about/governance/policies/trademark-usage-guide-for-cfa-charterholders.

Disclosures:

    • © 2024 M&T Bank and its affiliates and subsidiaries. All rights reserved.
    • Wilmington Trust is a registered service mark used in connection with various fiduciary and non-fiduciary services offered by certain subsidiaries of M&T Bank Corporation including, but not limited to, Manufacturers & Traders Trust Company (M&T Bank), Wilmington Trust Company (WTC) operating in Delaware only, Wilmington Trust, N.A. (WTNA), Wilmington Trust Investment Advisors, Inc. (WTIA), Wilmington Funds Management Corporation (WFMC), Wilmington Trust Asset Management, LLC (WTAM), and Wilmington Trust Investment Management, LLC (WTIM). Such services include trustee, custodial, agency, investment management, and other services. International corporate and institutional services are offered through M&T Bank Corporation’s international subsidiaries. Loans, credit cards, retail and business deposits, and other business and personal banking services and products are offered by M&T Bank. Member, FDIC. 
    • M&T Bank Corporation’s European subsidiaries (Wilmington Trust (UK) Limited, Wilmington Trust (London) Limited, Wilmington Trust SP Services (London) Limited, Wilmington Trust SP Services (Dublin) Limited, Wilmington Trust SP Services (Frankfurt) GmbH and Wilmington Trust SAS) provide international corporate and institutional services.
    • WTIA, WFMC, WTAM, and WTIM are investment advisors registered with the U.S. Securities and Exchange Commission (SEC). Registration with the SEC does not imply any level of skill or training. Additional Information about WTIA, WFMC, WTAM, and WTIM is also available on the SEC's website at adviserinfo.sec.gov. 
    • Private Banking is the marketing name for an offering of M&T Bank deposit and loan products and services.
    • M&T Bank  Equal Housing Lender. Bank NMLS #381076. Member FDIC. 
    • Investment and Insurance Products   • Are NOT Deposits  • Are NOT FDIC Insured  • Are NOT Insured By Any Federal Government Agency  • Have NO Bank Guarantee  • May Go Down In Value  
    • Investing involves risks and you may incur a profit or a loss. Past performance cannot guarantee future results. This material is provided for informational purposes only and is not intended as an offer or solicitation for the sale of any security or service. It is not designed or intended to provide financial, tax, legal, accounting, or other professional advice since such advice always requires consideration of individual circumstances. There is no assurance that any investment, financial or estate planning strategy will be successful.

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