Literacy Services of Wisconsin, the only comprehensive adult education provider in the state, recently entered a philanthropic partnership with the Greater Milwaukee
Foundation that will help secure its future and advance its mission in community.
The 60-year-old nonprofit offers free adult education programs in reading, writing and math; English language learning; and high school equivalency. The organization operates with a staff of 28 and 270 volunteer tutors at five locations, four in Milwaukee and one in Waukesha.
LSW offers a variety of learning methods to meet each student’s unique educational goals. These include one-on-one tutoring, small group or classroom format with a tutor and/or instructor, and classes by Milwaukee Area Technical College instructors at two LSW locations.
LSW approached the Foundation about establishing an agency endowment fund, an instrument that provides regular distributions to the organization. The Foundation manages more than 150 such endowment funds, which are meant to provide support for long-term organizational sustainability and growth.
The principal provided by the nonprofit to create the fund is invested, and revenue is generated from the investment earnings. This allows the funds to grow in perpetuity for the organization. The dollars can be used for operating support, grant services, programmatic support and more. Some agencies fondly call it “our little nest egg.”
Below is a conversation with Holly McCoy, the nonprofit’s executive director, about why LSW chose to work with the Foundation.
LSW’s endowment with the Foundation is relatively new, slightly over a year old. Why did your agency decide to create an endowment here?
Our endowment is small, currently around $100,000. At first, we thought that it might be too small for the Foundation. But the Development and Philanthropic Services staff assured us that we would receive the same thoughtful advice and support as agencies with much larger endowments. One of the many benefits of the Foundation is that it’s local; we know the folks who work there, and they are very knowledgeable. Plus, the way the Foundation reinvests its dollars in our community is ethical and community-driven. This appeals to us. We haven’t taken a disbursement yet but will soon, after doing a review of our portfolio. It’s likely we will use the disbursement to reinvest in our operations.
What will the endowment allow LSW to do?
None of us wants to talk about the dark days of COVID-19, but the pandemic actually provided an opportunity for us to see the things we couldn’t plan for. The Foundation is helping us keep in front of mind the unexpected things,
the unknowns, and do our best to be prepared for them. Hopefully, some of these unknowns will never happen, but the goal is to be ready.
What advice to you have for other nonprofits thinking about setting up an endowment?
As a nonprofit, we are mission-driven but are also a business. Our aim is to make sure we’re being as thoughtful with our dollars as anyone else. So if you can do it, think about creating an endowment. It will help you be better positioned for the future and for the unexpected.