Ensuring financial sustainability is more important than ever before

A review of The Time for Endowment Building Is Now: Why and How to Secure Your Organization’s Future by Deborah Kaplan Polivy

Rowman & Littlefield, 129 Pages, $ 45.00

Dr. Deborah Kaplan Polivy has written a very important book that should be read by anyone involved in financial resource development in nonprofit organizations. It has relevance for members of the professional staff and volunteers—both those sitting on the board and those involved in raising funds. In addition, it will be valuable for financial advisors, lawyers, and bankers who advise their clients when and how to allocate resources to the endowment funds of voluntary organizations they wish to support.

Kaplan Polivy comes to the subject with a great deal of relevant professional experience: she has worked for a variety of nonprofit organizations—both those involved in planning and allocations, such as Jewish federations, and agencies that provide direct service. She is the author of two books on the “Donor Lifecycle Map” (2014 and 2017). Kaplan Polivy has also served as a resource development consultant to organizations and foundations. These experiences have provided her with an understanding of the myriad of issues relating to the development and flourishing of endowment funds. The Time for Endowment Building Is Now brings together her knowledge and life experience as someone who has worked “in the trenches” of resource development in a professional–volunteer partnership.

The book opens with a discussion of the purpose of an endowment fund and what it means to raise money for it. She tackles head-on the lack of clarity in the fundraising field regarding endowments. There is confusion around the purpose of endowment funds, how to classify funds that are raised for endowments, and how funds from unrestricted legacies—wills and bequests—are allocated by nonprofit organizations when received as a result of someone’s death. 

Kaplan Polivy is very clear about the purpose of an endowment, seeing it as the nonprofit’s most effective way to strengthen its financial sustainability. She is just as clear about the right approach that an organization should take in allocating unrestricted legacies. Many organizations allocate these unanticipated funds to the current budget, because they may not have an endowment fund, or if they do, there are no clear policies about designating these funds for endowment purposes. Often organizations just muddle along and see unanticipated funds as a “windfall” to assist them in meeting their annual budget.

One of this book’s key contributions comes in its chapter that defines an endowment contribution. She clearly assigns responsibility to the leadership of the organization to advocate for establishing an endowment fund and then to develop the policies guiding its development and determining how to use unanticipated gifts. One of the most significant decisions an organization has to make is whether to use legacies for the current budget or to build and strengthen the endowment. It is very tempting to use such funds to cover a short-term need, rather than building for the future. These allocation decisions require an understanding of the organization’s financial situation and a commitment to building and growing an endowment fund.

One of the important take-aways from the book is that the organization has to devote time and effort to clarifying and conceptualizing the purpose and structure of the fund so that the endowment message is communicated clearly to all involved—the professional staff, potential donors, and the community at large. There is an an excellent discussion of the lack of clarity that exists in both the labeling of endowment funds and the staff titles for professionals responsible for developing the endowment and seeking contributions for it. Kaplan Polivy provides examples of how the lack of clarity can cause confusion in the organization’s efforts to publicize the existence of the endowment fund and identify and solicit contributions from perspective donors. The chapters dealing with what the fund is called and what is the title of its director make the point that consistency in ideas and language will determine how successful the organization is in its efforts to establish, build, and expand an endowment program. 

In the later chapters, Kaplan Polivy addresses bequests and their role in building an endowment program. It is a big mistake to build an endowment on bequests alone, and donors can be encouraged to contribute to the endowment while they are still alive. Often, approaching prospective donors seems to be harder for the solicitor than for the contributor. Once the organization has determined how it wants to proceed, the final chapter offers guidance in the steps that need to be taken to create a successful endowment fund; key to that success will be alignment between the purpose of the fund and how it has been structured.  

Overall, Polivy’s book can be useful both for nonprofits beginning to build endowments and for those with established funds that should review their practices and evaluate the success of their present approaches. It makes a valuable contribution to a field where there is a great lack of clarity about the purpose and structures of endowment funds.

Stephen G. Donshik, D.S.W. is a retired member of the faculty of Hebrew University’s School of Social Work’s program in Management of Non-Profit Organizations.