The Yellowstone Art Museum began a long-term campaign to build endowment in 2006. Thanks to hundreds of local and national donors, we have made great strides, building our endowment to eight times the level that it was in 2006. There’s still a ways to go! A gift to endowment is a gift that keeps on giving to the YAM every year. The YAM is currently working hard to raise an additional $2 million in endowment by the end of 2014, which is our 50th anniversary year. There are many ways to give in support of endowment:
Q: WHAT IS AN ENDOWMENT?
An endowment is a type of fund held by a not-for-profit entity, such as the Yellowstone Art Museum. Well-managed endowments operate under two restrictions: 1) the fund’s principal cannot be spent, only the interest, and 2) the beneficiary (that is, the Museum) draws only part of the annual interest earned … the principal and remaining interest are reinvested to build the fund and its long term impact. What this means is that any gift you give to an endowment stays put and keeps earning revenue indefinitely for the organization you wish to benefit.
Q: WHAT GOOD DOES AN ENDOWMENT FUND DO?
Properly managed endowment funds grow in size annually, both from the reinvestment of a portion of the annual interest earned and because new contributions are added to it through the generosity of an organization’s donors. As the fund grows, the interest amount available for the organization to use each year also grows. A growing source of funding that is stable, such as an endowment, allows an organization to expand programs, take better care of its assets (in our case, a collection, two buildings, and a hardworking staff), and ride out downturns in the economy. An organization with a solid endowment fund becomes less “needy” as time goes on and the endowment grows.
Q: HOW IS THE YAM’S ENDOWMENT MANAGED?
The Yellowstone Art Museum endowment, which is approximately $3 million as of January 2014, is managed prudently under the oversight of the Board of Trustees and its Finance Committee. Our policy document that governs endowment investment is available to you upon request. The YAM’s policy permits a 5% distribution rate. At this level, you can see how a larger endowment would benefit the Museum:
$5 million = a $250,000 annual distribution
$10 million= a $500,000 annual distribution (over a third of our current annual operation costs)