The recent recession has hit the voluntary sector hard. Charities and non profit organisationsare amongst the first to suffer fromlower discretionary spending. Not onlyhave traditional sources such as fundraising drives and appeal weeks yieldedless, but the philanthropic and trust organisations who grant money also haveless to give as their investment capital and income has reduced.
For organisations that rely heavily on donations, this double blowhas caused some of them to reduce their services to the community.
One of the most sustainable and stable ways that any non profitorganisation can ensure its long term survival is to have a ‘passive’ incomesource not related to membership or grants.This passive source is usually from interest generated from an investedpool of money or reserve.
Over time many organisations build a small reserve, but few go farenough to have a big enough reserve to generate sufficient income to operate onan ongoing basis.More focus in thisarea over time, can change this situation.$5,000 a year over 5 years would build enough capital to start a NamedFund with the Geyser Community Foundation.A Named Fund is for a particular purpose or beneficial organisation, andonce established, this can continue to grow by encouraging further donations byother donors.
Often bequests are used to fund annual operating for charities.However if such money was placed in a NamedFund with the Geyser Community Foundation, the funds are invested to protectthe real value of the capital, and the excess return can be donated to thebeneficiaries.This means the donor’scapital keeps on working in perpetuity.
Rather than setting up an individual trust which can be complex timeconsuming and costly (and often is too discouraging to donors who want to leaveongoing benefits) the Geyser Community Foundation provides a ‘ready made’structure - the Named Fund.
As all voluntary organisations find fundraising and volunteer hoursshrinking, a strategic medium term plan to build a Named Fund, ensuring anincome stream in perpetuity, will help make a difference in our community.
