By Peter Fardy, Principal, Northport Philanthropic Advisory Services

Before deciding to set up an endowment, donors should carefully consider the impact they wish to make, and over what period.

Endowments are still a common tool used by donors to support charitable causes over the long term, but that may not be the best way to achieve philanthropic goals. If a donor’s priority is to make greater impact sooner, they should consider creating an annuity or hybrid structure that aligns funding with need.
There are many societal and community problems and opportunities in the world to be addressed, some of which could be resolved with adequate and timely funding. Meanwhile, trillions of dollars have been stockpiled for charitable purposes that, if spent at a faster pace, could make a significant, if not transformative, difference.
Donors should be encouraged to start with considering what they would like to accomplish, and over what period. Only then can an informed choice be made about how to structure a charitable gift.