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How Can I Get Endowment Advice?

K.C. Bruning
K.C. Bruning

Getting the best endowment advice can involve drawing information from a variety of sources, from consultants to peers. In order to ensure that all activity associated with the endowment is legal, it is typically best to speak with a professional financial consultant or bank first. Then it can also be useful to seek advice from people who manage endowments, board members, and others who are associated with an endowment that will be able to speak to its best interests.

Banks are one of the traditional places to get current endowment advice. These professionals can offer ideas about how to build and manage a fund. They are also up-to-date on all laws related to endowments, in addition to being savvy to market conditions. Some financial consultants may also be able to offer similar assistance, though their resources will vary more widely, depending on the size of the firm or if an independent contractor is providing the advice.

Woman holding a book
Woman holding a book

Consulting with managers of other endowments can also be beneficial. It can be especially useful to learn about funds of several different sizes and types of focus. Often it is most productive to seek endowment advice from sources that have practices similar to, or at least understand the nature of, the organization. For example, the manager of an endowment that is invested in high-risk ventures may not provide the most beneficial guidance to a more conservative organization. This need not necessarily exclude learning from different kinds of endowment management styles, as any success story can potentially yield good advice.

There are three major types of endowment: permanently restricted, temporarily restricted, and unrestricted. Also known as a true endowment, a permanently restricted endowment is one in which the principle always remains untouched. A temporarily restricted fund is typically meant for a specific purpose and is thus set up to exist for a limited period, after which it can be spent. Unrestricted endowments usually consist of funds drawn from internal resources and are thus not subject to the scrutiny of funds from donors.

When seeking endowment advice, it can be useful to learn about all of these fund types, whether from a finance professional or a fund manager. Even if a kind of endowment does not seem like a strong fit for the organization, it may be a good way to diversify in the future. It is also wise to keep apprised of all fund types in order to have a big picture understanding of the endowment process.

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