For library directors and development professionals, there’s one truth that rings clear: annual fundraising campaigns and government funding can only take you so far. To secure your library’s long-term stability, you need something more enduring—a foundation that supports generations to come. That’s where an endowment can come in.
An endowment is more than just a financial safety net; it’s a sustainable funding mechanism that provides consistent annual income for your library, no matter what shifts occur in public budgets or economic conditions. According to the National Center for Charitable Statistics, U.S. nonprofit organizations hold more than $1 trillion in endowment assets, and nearly 70% of higher education institutions rely on endowments to sustain their programs. While libraries may not operate on the same scale as universities, the principle is the same: endowments build independence, stability, and growth.
At Fundraising for Libraries, we’ve seen firsthand how endowments transform libraries from “scraping by” into thriving, resilient institutions. If you’re thinking about starting—or strengthening—an endowment for your library, here are 10 factors to consider.
1. Clarify the Purpose of Your Endowment
Before asking donors to give, you need to clearly articulate why your library needs an endowment. Is it to provide stable funding for core operations? Support a specific program like children’s literacy or technology access? Or create long-term flexibility for future needs?
Donors are more inspired when they know their gifts will safeguard something meaningful. A study by the Indiana University Lilly Family School of Philanthropy found that donors respond more strongly when their legacy giving aligns with specific, values-driven purposes. Make sure your case statement explains how the endowment will fuel your library’s mission over decades, not just years.
2. Set Realistic but Ambitious Goals
Launching an endowment doesn’t mean you need $10 million to start. In fact, many libraries begin with a modest goal of $100,000 to $250,000, which can generate $4,000–$10,000 annually at a standard 4% spending rate.
What matters most is setting a target that’s achievable in your community yet large enough to make a noticeable impact. Over time, your library can grow the endowment through additional campaigns, legacy gifts, and investment returns. Think of it as planting seeds—you may start small, but with consistency, the fund will grow into something substantial.
3. Understand Investment and Spending Policies
An endowment is only as effective as its financial structure. Most nonprofits follow a 4–5% annual spending policy, which balances stable yearly payouts with long-term growth.
For example, a $1 million endowment at a 4% payout would provide $40,000 each year—enough to fund a part-time librarian, expand digital resources, or support ongoing programming. Work with your board and financial advisors to establish clear investment and spending policies upfront, and communicate these to your donors for transparency.
4. Build Board Buy-In Early
Your board will play a pivotal role in shaping and supporting an endowment. Without their buy-in, it will be difficult to launch successfully.
Encourage board members to:
5. Start with Leadership and Major Gifts
Endowments grow most quickly when they begin with anchor gifts from major donors. These early commitments provide credibility and momentum.
Nationally, 88% of charitable giving in the U.S. comes from just 12% of donors (Giving USA 2023). That means your best prospects for endowment gifts are individuals and families already deeply invested in your library’s success.
Begin by identifying a handful of loyal donors, community leaders, or families with a history of philanthropy. Invite them to help establish the endowment’s foundation, emphasizing their role in ensuring the library’s future.
6. Incorporate Planned Giving from the Start
Planned gifts—especially bequests—are one of the most effective ways to grow an endowment. Research shows that over half of Americans make a will, and among those who do, nearly 10% include charitable gifts.
Encourage donors to leave a portion of their estate to your library’s endowment. Even modest legacy gifts add up over time, and they create a meaningful connection between donors’ personal stories and your library’s future. Plant the seed early by including endowment giving language on your website, in newsletters, and in donor conversations.
7. Communicate the Endowment’s Impact Clearly
An endowment can sound abstract to donors, so make it tangible. Instead of focusing on “principal balances” or “spending rates,” talk about outcomes:
Framing the endowment in terms of community impact makes it accessible and inspiring. Remember, donors give because they want to make a difference—not because they’re excited about financial vehicles.
8. Celebrate and Steward Endowment Donors
Endowment gifts are often among the most personal and meaningful contributions a donor makes. Treat these donors with care and gratitude.
Best practices include:
According to the Fundraising Effectiveness Project, the average donor retention rate hovers around 45%. But donors who feel appreciated and connected are far more likely to continue giving, refer others, and deepen their commitment.
9. Plan for Growth Over Generations
Endowment planning isn’t just about today—it’s about tomorrow. Your policies, fundraising strategies, and communications should reflect a long-term perspective.
Consider:
Libraries are inherently generational institutions. Framing the endowment as a gift to the future helps donors see the lasting legacy of their support.
10. Don’t Go It Alone—Seek Expertise and Support
Starting an endowment can feel overwhelming, especially if your team is already stretched thin. Partnering with teams like ours can provide the knowledge, strategies, and confidence you need to succeed.
We’ve helped libraries raise more than $7 million using tailored approaches that honor their unique communities. Whether it’s drafting a compelling case statement, structuring your planned giving program, or training your board, having the right support makes all the difference.
Endowments are not just for large universities or major cultural institutions—they’re a vital tool that every library can use to secure its future. With careful planning, board alignment, donor engagement, and a clear vision, your library can build an endowment that provides stability, independence, and impact for generations.
Here’s a quick recap of the 10 tips for planning an endowment:
At Fundraising for Libraries, we believe libraries deserve sustainable funding and the confidence to pursue it. Endowment planning isn’t about chasing dollars—it’s about ensuring your library continues to inspire, connect, and enrich your community for generations to come.