Endowment: Don’t Touch It!!
When I was young, Belmont Savings Bank had a “Christmas Club” as a way for young people to save. My parents encouraged me to save $1-$2 each week. By Chanukkah, I would have some money to use to buy presents for my sisters.
And back then you had to physically go inside the bank to make the deposit, to develop a sense of “banking” you would have to do as an adult, I guess. I wrote a couple of weeks ago that the only time I have gone inside a bank recently is for a Cashier’s check for our adult children’s initial rent obligations on a new lease.
The concept of savings though remains a part of our lives in many ways. There are various vehicles for long-term savings for college and for retirement. For synagogues, the endowment fund is such a vehicle. Even if there is an annual allocation to the budget, over time, with an investment strategy that is on the conservative side – it is the community’s money – and with additions through bequests and other planned gifts, this fund could grow to a substantial sum to really have impact on the synagogue’s annual budget.
What if your synagogue had an endowment campaign, and set aside half of what your raised and didn’t touch it for 20 years?
A disruptive approach, but one worth considering.
The Minneapolis Foundation is doing exactly this – but won’t be touching the $2.9 million it hopes to raise for 50 years. They project the fund in that time will grow to $29 million. They plan to only use 80% in 2065 and reinvest the remaining 20% for the next 50 years!!
Back to the synagogue. Instead of having a $2 million for the building, Let’s stretch and aim high and have a special campaign for $4 million, with $2 million for the endowment – and not to be touched for 20 years. Of course there may be fluctuations in the market that can’t be predicted, but let’s project that money invested conservatively still doubles every 7 years. Being on the safe side, let’s say that the initial $2 million is now $12 million. And following the example of the Minneapolis Foundation, you leave $2 million in the fund for the next 20 years.
You could find lots of ways to spend the money – refurbishment and upkeep of the building, new staff positions, and put back several million into the synagogue’s general endowment fund to support the annual budget. Or even take $ 1 million for Tikkun Olam in the community.
If you had a campaign for $1 million and didn’t touch it for 20 years, this special endowment fund would grow to approximately $7 million. I envision the leadership of the synagogue in 2036 being so appreciative of today’s leaders for having the foresight to plan and secure the synagogue’s financial future. Perhaps this new culture of philanthropy in the synagogue will inspire future generations with similar generosity.
I am reminded of the story of Honi the Circle Drawer. Honi asks a man who had planted carob trees if he expects to live another 70 years to be able to eat the fruit that the trees will then be able to bear. The man replied:
“I did not find the world without carob trees when I entered it; as my forebears planted for me, so I am planting for those who come after me.” (Talmud Ta’anit 23a)