Give, Give, Give. Decoding Annual Giving, Endowment and Dues

Back to school time also means back to League time! We head into September with memories of the summer behind us. While a large portion of League members spend their free time at the pool, many have sacrificed their tan for the sake of planning for this upcoming year. After a successful 2012-2013 League year, we look ahead to a promising 2013-2014 League year.

With this new League year, we start everything anew including the requirements of donations to the Annual Fund, endowment, as well as paying dues.

Have you ever found yourself wondering why those items are part of our obligations? What’s been your motivation in giving to those items? Is it for the tax-incentive, or does it fulfill the goal of seeing those checkmarks appear on your obligations page just as fast as possible? Maybe you take advantage of earning a fundraising credit for making an outright donation? Regardless of the reason you give, we want to make sure everyone knows why each of these areas are so important and why they’re part of the membership obligations page.

The Annual Fund for a non-profit organization (including the Junior League of Louisville) is the sustainable fund that allows programming. Basically, it’s the annual giving program that helps us keep the lights on and offer the training and programs we’re able to offer each year. Think of the Annual Giving program as JLL’s checking account. It’s the fund that allows us to pay for our everyday needs. Since JLL is a non-profit entity, gifts made to the Annual Fund are 100% tax deductible (bonus!)

If you’re thinking of the Annual Fund as the JLL’s checking account, the endowment is the equivalent of the League’s savings account. Funds donated to the endowment are not available for spending. Instead, these funds are put into this special account and are invested. Earnings from the investments create a source of income therefore providing a long-term sustainability. The goal of an endowment is to never touch the principal and use the funds earned from the investment income as a revenue source. The JLL’s endowment is set-up in such a manner that the Board must approve spending any of the principal of the account. (This flexible type of endowment is technically called a “quasi-endowment.”) Gifts made to the JLL’s endowment are also 100% tax deductible.

Finally, there are dues. There is a common misperception that dues cover all operating expenses of the JLL. Unfortunately, that’s not the case, which is why the Junior League continues to seek fundraising opportunities. Membership dues cover a few expenses within the League, but they don’t begin to cover all of them, making donations to the annual giving program that much more important. Keep in mind though – when you pay membership dues to JLL, you’re also paying dues to the Association of Junior Leagues International (AJLI) and therefore have a membership to that organization. There is a tremendous amount of resources for all League members on the AJLI website

To recap: Annual Giving is important for our short-term programs and maintenance; endowment giving is important for our long-term sustainability; dues are necessary to continue our membership. Be sure to consult your tax professional for any tax deduction questions.