Imagine giving a charity something invaluable: financial stability. Many non-profits dream of a steady, predictable income that allows them to budget and plan for the future, focusing on their core mission instead of spending excessive time and energy on fundraising. This is where a Spend Down Fund (or Term Endowment) comes in.
A Spend Down Fund enables a donor to provide a recurring annual gift over a set time frame – such as 10 years. This is a game-changer for charities. Rather than worrying about where the next year's funds will come from, they can plan with confidence, building multi-year strategies that deliver impact.
What is a Spend Down Fund?
In philanthropy, we often encounter specialized terms like "Spend Down Fund" or "Term Endowment." Simply put, this refers to a funding model where the donor selects:
- A charity to support.
- A time frame over which to provide support.
- The annual amount to be distributed.
Community Foundation North Okanagan (CFNO) provides a simple and meaningful framework for setting up this type of fund. Here’s an example:
- Charity: Caetani Cultural Centre
- Time Frame: 10 years
- Annual Distribution: $10,000 plus interest
- Total Distribution: $100,000 plus interest over 10 years
Why it Matters
Providing a stable source of income over several years offers charities the opportunity to:
- Plan ahead without the uncertainty of fluctuating donations.
- Focus on their mission rather than spending time and resources on constant fundraising.
- Build lasting programs and initiatives that make a real impact.
“My passion for the arts has led me to volunteer with so many great organizations in the North Okanagan. The Caetani Cultural Centre holds a special place in my heart, as I have been on the board and watched the centre grow and carve out its special place in our local cultural milieu. Over the next five years, I will annually donate $10,000 to support Caetani’s operations through a Spend Down Fund, and an additional $10,000 to help build their endowment fund for long-term growth. Through the family fund we started at the Community Foundation North Okanagan, I am able to demonstrate my commitment to the Caetani Centre’s valuable program offerings in our community.”
~ aj jaeger, passionate arts supporter and advocate for cultural growth
Caetani Cultural Centre: A Local Gem
The Caetani Cultural Centre is a unique British Columbia tourist attraction, offering tours of the heritage home of artist Sveva Caetani and showcasing her powerful "Recapitulation" series. It also hosts arts programs, concerts, events, and an Artist Residency Program, welcoming artists from across Canada and around the world.
Interested in Creating a Spend Down Fund?
If you’d like to explore starting a Spend Down Fund for your favorite charity, we can guide you through the process. Contact Leanne Hammond at Leanne@cfno.org or call 250-542-8655 for more information.