Endowments can be transformative for nonprofits, especially those representing traditionally underserved populations and working to close gaps, and deserve a closer look as an effective strategy for funders to advance equity. Recent CEP research shows that funding nonprofit endowments is not a widespread practice. Yet, endowments offer financial stability and innovation — both essential for impact — and are correlated with long-term growth and sustainability, which equity work requires.

For more than 55 years, UnidosUS (previously known as the National Council of La Raza) has been a leader in the fight for Latino civil rights, social justice, and opportunity. We have experienced notable growth since 2020: our staff has increased by one third; we experienced three years of historically high revenue; and we have deepened our leadership expertise. Recently, we articulated a new strategic direction focused on achieving far-reaching impact for Latinos by changing systems to close economic and social inequities for Latinos and building the power of Latinos to influence and hold these systems accountable. This new strategy is ambitious and requires new capacities, a shift in the way we think about our work, and additional, flexible, and multiyear resources.

UnidosUS was able to develop this bold strategy because our philanthropic partners have fostered our ability to evolve with a focus on innovation, complexity, and impact. One element that has laid the foundation for our sustainability is the establishment of the Unidos Investment Fund, our endowment.

What an Endowment Enabled UnidosUS to Do

The UnidosUS endowment was seeded with an initial “capital depletion” grant from the Ford Foundation in 2000. Instead of funding the organization with an annual grant spread out over multiple years, Ford provided “forward funding” in a single tranche. Ford also provided substantive and technical support; for example, they recommended that the endowment be held by a separate entity to protect the asset and provided guidance in the development of our Investment Policy Statement to ensure the growth of funds over time. UnidosUS subsequently launched a five-year Empowering an American Community Campaign in November 2002 to establish a formal endowment and facilitate the purchase of the UnidosUS headquarters building three blocks from the White House. In 2022, the Robert Wood Johnson Foundation (RWJF) added another major tranche of funding to the endowment.

Read the full article about endowing nonprofits by Sonia M. Pérez at The Center for Effective Philanthropy.