Planned Giving: The Most Powerful Engine of Endowment Growth
Planned giving has built more enduring endowments than any annual, capital, or special campaign ever could. Annual gifts fund the present; planned gifts build the future. I believe they create stability, independence, and the long-term investment base that allows nonprofits to plan and grow with confidence.
Transformational endowment gifts rarely happen by accident. They’re catalyzed by three triggers:
- Personal connection to the mission
- Confidence in leadership and governance
- Clarity about how the legacy will be stewarded over decades
Four examples show how legacy‑driven commitments reshape an institution’s financial trajectory:
- Walter Annenberg’s $100 Million Gift to The Peddie School (1993)
As an alumnus of The Peddie School, this story resonates personally with me. In 1993, Ambassador Walter Annenberg made a $100 million unrestricted endowment gift – at the time the largest gift ever to an independent school – multiplying Peddie’s endowment and permanently changing its trajectory. The gift strengthened financial aid, elevated academic programming, and signaled to generations of donors that the school had long‑term strategy and stewardship worthy of major investment. - Ruth Lilly’s Transformational Bequest to the Poetry Foundation (2002)
Ruth Lilly’s planned gift, widely reported at nine figures, established a permanent endowment that scaled a modest literary organization into a national cultural institution. It funded fellowships, programs, and the platform to reach millions, proving how a donor’s lifelong passion – paired with institutional credibility – can transform capacity and influence. - Joan Kroc’s $200 Million Estate Gift to NPR (2003)
Joan Kroc’s bequest created a permanent endowment that underwrote independent journalism and expanded reporting capacity across the network. It enabled long‑range planning and strengthened public media’s mission resilience. - The Brattleboro, Vermont Janitor’s Legacy to His Hometown (2015)
Not all endowment‑building gifts come from nationally known philanthropists or elite institutions. In 2015, Ronald Read, a Brattleboro janitor and former gas station attendant left multi‑million‑dollar bequests to Brooks Memorial Library and Brattleboro Memorial Hospital, accumulated through decades of modest living and disciplined investing. For a small-town institution, the impact was generational: it strengthened reserves, fueled new community giving, and proved that transformational planned gifts can and do happen in small towns from everyday people.
The lesson: Legacy gifts aren’t about wealth; they’re about trust — trust in mission, leadership, and long‑term stewardship. For a deeper look at endowment strategy, see Nonprofit Endowment Strategy: Questions CEOs Never Ask on philanthropy.org
Legacy gifts aren't about wealth; they're about trust — trust in mission, leadership, and long‑term stewardship.
Planned Giving Is Built on Confidence in the Future
Bequests, charitable trusts, and other legacy gifts are not impulsive. They reflect a donor’s belief that an organization will remain strong, responsible, and mission‑focused for decades.
That confidence does not come from marketing materials. It comes from governance, leadership, and financial stewardship.
When donors include a nonprofit in their estate plans, they are essentially asking: Will this organization still be worthy of my gift decades from now? Most organizations never stop to ask whether their financial structure can confidently answer “yes.”
A Surprisingly Small Slice of the Nonprofit Sector Have an Endowment
Only about one in ten nonprofits maintain an endowment – based on an analysis of ~375,000 IRS Form 990 filings by researchers at MIT Sloan and the University of Illinois, summarized by the Harvard Law School Forum on Corporate Governance. Even after controlling for size, endowment‑holding nonprofits grow faster in revenues, contributions, and program spending, and devote a larger share of budgets to mission vs. overhead.
This gap isn’t accidental. It reflects governance choices, strategic alignment, and whether leadership has paused to examine the structures that make long‑term sustainability possible.
The Often‑Ignored Link Between Planned Giving and Endowments
Most planned gifts ultimately strengthen endowments or long‑term reserves. That means the relationship between development leadership and financial oversight matters more than many organizations realize.
In strong organizations:
- Development teams understand the endowment strategy
- Investment committees understand the role of planned gifts
- Financial advisors support philanthropic planning, not just portfolio performance
- Boards align around long‑term sustainability goals
When these areas operate in separate lanes, the organization may perform well functionally, but without a unified strategy for long‑term financial growth. That disconnect quietly limits both endowment growth and donor confidence.
Advisor fit matters. Advisors who integrate philanthropic planning with client first investment management help bridge donor intent and endowment policy. That integration is rare. When that integration exists, it shows.
Questions Many Nonprofits Never Stop to Ask
In working with nonprofit leadership teams, one pattern appears repeatedly: very few organizations have ever conducted a structured evaluation of their endowment strategy.
Boards regularly review budgets. Development teams regularly review campaign performance. But surprisingly few nonprofits periodically step back and ask:
- Does our investment strategy support our long-term mission goals?
- Are our development and investment teams aligned around endowment growth?
- Are donors clearly educated about how legacy gifts strengthen our financial future?
- Does our financial advisor actively support philanthropic and facilitate giving strategies, or only investment returns?
These are not theoretical questions. They influence donor trust, governance quality, and the long-term financial resilience of the organization.
Why This Matters More in Today’s Funding Environment
Leaders face increased demand, revenue volatility, and heightened expectations for transparency and impact. Endowment policy is a strategic risk‑management issue, not just an investment issue. Organizations with unstable revenue models are especially vulnerable; endowments are among the most reliable tools for reducing that vulnerability.
Planned giving remains one of the most dependable pathways to building endowments. Yet many planned giving programs operate without a clear connection to the endowment strategy, leaving donors uncertain about how their legacy gifts will be stewarded. Confidence begins with governance and financial clarity.
A Structured Endowment Strategy Self‑Assessment
To help leadership teams evaluate these issues, a short self‑assessment has been developed focused specifically on endowment, planned giving and investment strategy.
The Endowment & Investment Program Assessment examines:
- Endowment size and growth objectives
- Advisor relationships and investment oversight
- Governance and committee structure
- Development involvement in endowment discussions
- Integration of planned giving and donor engagement
The purpose isn’t to criticize existing systems. It’s to prompt leaders to ask whether current structures truly support long‑term goals. Often the most valuable outcome is the conversation that follows.
Most Organizations Assume “It’s Working”
Quarterly reports arrive. Assets are invested. But strong performance alone does not guarantee a strong endowment program. Governance alignment, donor communication, advisor involvement, and development strategy all matter. Without reviewing these areas together, organizations can operate for years with gaps that quietly limit long‑term growth.
A short diagnostic can surface these blind spots in minutes.
Download the 30‑Question Endowment Assessment
30 questions. Seven sections. One conversation that could change your endowment strategy.
What you'll get:
30 questions across seven sections covering governance, investment oversight, and planned giving integration.
How to use it:
Review together with CEO/ED, investment committee chair, development leadership, and board finance heads. The discussion often surfaces immediate opportunities to strengthen both governance and donor communication.
When “No” Answers Reveal Opportunity
Common outcomes:
- Development isn’t comfortable discussing endowment policy with donors
- Advisors just focus on investment returns but not philanthropic planning
- Advisors not actively facilitating endowment gifts
- Boards haven’t articulated long‑term endowment growth goals
None of this is unusual. Governance structures often lag behind organizational growth. The critical step is recognizing where alignment can be strengthened and deciding to act.
The Long View of Stewardship
Endowments are more than financial assets. They represent the accumulated trust of generations of donors.
Planned gifts are often the most personal contributions donors make, reflecting a lifetime of values and a belief in the organization’s future. Stewarding those gifts well requires more than sound investment performance. It requires thoughtful governance, clear strategy, and a culture that values long‑term sustainability.
When those elements are in place, donors notice and legacy commitments follow.
A Final Thought
Nonprofit leaders rarely lack dedication to the mission. What’s often missing is the time to step back and examine whether financial structures are fully aligned with long‑term goals.
Nonprofits with endowments grow faster, serve their missions more efficiently, and attract stronger donor relationships. The difference often traces back to whether leadership asked the right questions at the right time.
Sometimes the answers confirm the organization is on the right path. Other times they reveal opportunities to strengthen governance, improve donor communication, and reinforce the long‑term sustainability that planned giving is designed to support.
Either outcome is valuable because the strength of an organization’s mission is tied to the strength of its stewardship.
The views expressed in this article are those of the author and may not reflect the opinions or positions of Raymond James & Associates, Inc. or Raymond James Financial Services, Inc. This material is for informational purposes only and is not intended as investment, legal, or tax advice. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. The foregoing is not a recommendation to buy or sell any individual security or any combination of securities. Investing involves risk and you may incur a profit or loss regardless of strategy selected.
