Here’s an unfortunately common scenario:
A small, reborn nonprofit has had its ups and downs made public. The new administration is great, however, and on the right path to solid goals while rebuilding the reputation of the organization. Still, some donors are concerned about supporting a scholarship endowment or other future fundraising efforts because of issues with former administrations.
How do you create a new foundation for fundraising that leaves no doubt as to trustworthiness? Use a third party to handle funds. Simply put, run to your local community foundation and enlist their assistance. Community foundations are designed to be the central depository of gifts in perpetuity bettering the local community. These organizations are part of a national network and often serve as a philanthropic hub, offering resources to other nonprofits and providing infrastructure guidance to start-ups. The beauty of a community foundation is the fact that any nonprofit can open an account and use them as a watchdog. Allowing your scholarship endowment to be administered by the community foundation ensures safety, investment expertise, and permanence.
Donors rarely give large gifts to organizations without impeccable track records, so having a trusted third party handling the transaction eliminates any doubts and instills confidence. Additionally, the money is protected and the nonprofit thrives because the donations invested at the Community Foundation cannot be diverted unless the organization ceases to exist.
Ben’s Takeaway: Use your community foundation to handle funds transparently and shore up a dented reputation.