The Middle States Tennis Patrons Foundation, Inc. has established an endowed fund with The Philadelphia Foundation to promote its long-term mission of supporting grass roots and school youth tennis programs.
An endowment fund is like a savings account, but instead of sitting in a bank, the monies are invested in the stock market and are managed by a 3rd party administrator/broker. The principal earns gains and each year, the endowment is valued and 5% (generally) of the fair market value is awarded by the Board. With the Patrons’ endowment fund, the monies are awarded to grass roots tennis programs favoring youth and schools throughout Middle States through the section’s Scholarships and Grants process.
An endowment can provide a stable stream of income to bolster an annual operating budget and either make up lost revenue in years when other funding sources are less than expected or provide excess revenue to address priority needs and projects (ie. scholarships and grants to grass roots tennis programs).
In addition to a stable stream of income, studies show that generally, annual giving is higher in charities that have a permanent endowment. Having an endowment, to the public and donors, says that your in business for the long run. It gives donors something to give to. Endowment suggests and means permanency. Studies also show that endowment donors are also more invested in your organization and tend to INCREASE their annual gifts over time at higher rates than non-endowment donors. Donors commit to mission when they give to endowment.
Who manages and administers the Patrons’ endowment fund?
The Philadelphia Foundation (TPF) is a community foundation located in Center City Philadelphia. TPF is in the business of holding and managing endowments for non-profits like Patrons, who have no Development staff and are driven fully by volunteers. Their Board, who has an investment committee, manages the Patrons’ diversified portfolio. TPF holds $325MM in assets and services Montgomery County and the Middle States region. They have been in existence since 1918.
How does Patrons spend the income from our endowment?
Patrons would receive annually a 4-5% payout from the fair market value of the endowment, valued annually. TPF charges 1% of the payout as a fee. The other 4% is for Patrons to spend as it sees fit. For example, if we have $10,000, 5% income is $500. $100 goes to TPF in fees and $400 comes to Patrons. As the $10,000 grows with time and additional gifts are added to it, so does the income award. In reality, if the endowment grew to several hundred thousand dollars over time, the income alone could fully fund Patrons allocation to the MS Scholarships and Grants Committee.
Can donors make gifts to the endowment?
Yes. Our Patrons donors can make gifts to the endowment at any time – www.philafound.org. Donors will not have to mail Patrons a check – they will be able to give on-line to our endowment, through the TPF. TPF became our quasi-staff – which is a huge benefit to Patrons.
A Patrons endowment would allow our donors to make a permanent contribution to – and a re-investment in – MS tennis’ future. The donor becomes invested in the success of Patrons today, and has an opportunity to ensure the success of Patrons in the future.
If you have any questions regarding the Patrons’ endowment, please call Christian P. Sockel, JD, President of the Patrons at 610-705-1005 or email at csockel@thehill.org.