Foundation

A NIRSA Foundation and endowment primer

They do great things, but what are they, exactly?

Following is some basic information about foundations and endowments. It is meant to help NIRSA Members better understand what a foundation is, what an endowment is, and how to establish a NIRSA Foundation Endowment.

What is a foundation?

Grant-making foundations are nonprofit, charitable, tax-exempt organizations that provide grants to support a variety of charitable causes and concerns. They are created by gifts of money, stock, or other resources from individuals, families, and corporations that wish to dedicate some of their private resources toward serving the public good. These gifts or assets are typically invested and the income generated is used to make grants.

What type of foundation is the NIRSA Foundation?

There are essentially four types of foundations: operating, independent, community, and company-sponsored. The NIRSA Foundation is an operating foundation. Operating foundations provide direct services or guide research projects. Few make grants to outside organizations and the majority of their funds go to their own internally operated programs, hence the name operating foundation.

How is the NIRSA Foundation funded?

The NIRSA Foundation receives donations from individuals and corporations. Additional funds are obtained through the NIRSA Foundation golf tournament, quilt auction, and t-shirt sale, all held during the NIRSA Annual Conference & Recreational Sports Exposition, as well as from the National Collegiate Golf Championship series.

What is an endowment?

An endowment is an investment of funds so that those funds may earn interest. The endowment, or principal, is never spent. The investment income earned is used to fund the endowment’s goals.

What are the current NIRSA Foundation Endowments?

The William Wasson Endowment was the first NIRSA Foundation Endowment, followed by the Region VI SoCal Scramble, Will Holsberry, Sonia and Max Gartenberg, Anthony “Tony” J. Chivetta, Presidents, Texas, and Founders Endowments. Discussions are currently underway with several state NIRSA organizations to establish endowments.

How much money does it take to fund a NIRSA Foundation Endowment?

The current minimum amount to establish a NIRSA Foundation Endowment is $10,000. (Please note that the minimum will change to $15,000 on January 1, 2007.) Once an individual or group indicates an interest in developing an endowment, they have three years to attain the minimum amount. Scholarships are not awarded until the $10,000 requirement is met and the interest accrued equals the cost of the specified registration.

What then?

The funds are invested, and income from the investments is used to provide scholarships for students and professionals to attend the NIRSA Annual Conference & Recreational Sports Exposition and/or a NIRSA-sponsored specialty symposium, in accordance with the wishes of those developing the endowment.

Why is the minimum amount to establish a NIRSA Foundation Endowment going up?

With the unknown rate of return on investments and the increasing registration costs for NIRSA professional development opportunities, the $10,000 might not generate enough income on an annual basis to fully fund even one registration. Therefore, the NIRSA Foundation Board voted to increase the minimum amount to fund an endowment to $15,000.

When will this take effect?

Beginning January 1, 2007, the minimum amount required to fully fund a NIRSA Foundation Endowment moves to $15,000. There are some basic requirements to establish the endowment; then there is a three-year window to raise the entire $15,000.

What if there is an interest in establishing an endowment now? Can it be done at the $10,000 level?

As long as a few simple criteria are fulfilled (namely a memorandum of understanding that outlines the basic premise of the endowment and a $100 earnest deposit) before December 31, 2006, an endowment may still be established at the $10,000 rate.

How can I obtain more information about a NIRSA Foundation Endowment?

Contact any of the NIRSA Foundation Board members to discuss the specifics of establishing an endowment.