Should Your Nonprofit Build an Endowment?

Should you build an endowment? Well, there is little debate that you should set aside money for a rainy day — a cash reserve that can help to smooth out the ups and downs in your operations. Just as investment advisors recommend that individuals have six months of emergency funds tucked away in a savings account, nonprofits should also strive to have cash on hand to hedge against uncertainty. This isn’t endowment, or even quasi-endowment.