Generosity that lasts forever
Published on 8 September, 2024
Simon Wickham - Chief Executive of Momentum Waikato
I’m often asked - what is it that makes Momentum Waikato’s ‘smart giving’ model work for both our donors, and the local communities that benefit from their generosity?
Our fundamental difference from most other organisations is that we’re all about ‘Giving Forever’, through connecting generous people to smartly invested endowment funds.
Traditionally in New Zealand it’s relatively easy to give away money, as we all encounter a steady parade of worthy, purpose-led and well-pitched charity appeals, cause-related events, and personal and organisational crowd-funding callouts.
The prevailing approach in all these cases is one-off donations that are used up all at once by those that have received them. You might call them ‘one-and-done donations’.
It has been harder to ‘give well’, meaning in a way that has an ongoing, inter-generational and transformational impact on the place where you live and give.
Which is where community foundations such as Momentum Waikato are now providing a valuable local solution - for generous people and organisations who want to give well. To explain how it works, we’ve devised the diagram below, which we’re calling the ‘Momentum Waikato Infinity Loop’.
As it shows above, the process for those donations we receive for immediate need only travel clockwise once around the upper loop; whereas donations to the endowment funds in our care travel around the whole ‘figure eight’, with the lower loop showing how we invest and grow those gifts, so they will perpetually support their benefactors.
Globally endowment funds are not new, and several countries are a century ahead of New Zealand in setting up community foundations. Which is why we believe there’s never a better time than right now to start building community endowment funds for tomorrow.
I’d also like to share a common element in our donors’ stories, which I’ve heard since I started here at Momentum Waikato.
Many of our donors ‘get it’, in that they understand what giving well is all about - donating now for tomorrow.
Our donors often epitomise the ‘spirit of generosity’ we’re growing together across the Waikato - from the tip of the Coromandel and the Bombays in the north, out to Raglan, across to Matamata, and down to Tokoroa and Te Kuiti in the south.
I recently met a couple who are typical Momentum donors, they want to remain anonymous, so let’s call them ‘Bob and Mary’, who are to be congratulated for carefully and determinedly accruing their personal wealth, but would rather ‘die as paupers’ than be sitting now on a pile of assets they can’t take with them when they go. I love that intent.
Bob and Mary are actively giving back both now and forever through Momentum Waikato, with generosity that will likely see them give away most of what they have accumulated over their lifetime. They’re giving some of it directly to projects and causes now whilst they’re still around, and they’re planning to give away more when they finally leave this world.
That’s a pattern we see often. For some the amount they have to give may be a few thousand dollars, for others it’s many thousands of dollars, and for just a few, it’s a seven-figure sum. The quantum matters less than what the sum of the parts invested together can achieve over time.
This is what I mean when I say our donors ‘get it’ – the spirit of generosity is realised collectively in perpetuity, so that from little things, big things grow.
The seeds of Bob and Mary’s generosity were sown long before they had any wealth at all. They grew up in a community where others gave back as a matter of course, maybe as time as a local coach or a riding instructor, maybe as a local volunteer for St Johns or helping out the local school fair.
Their ‘it’s what we do around here’ ethos was modelled for them early in life by others, and in time their turn to do the same arose, by giving back to their community through volunteering. As their ability to donate grew, so too did their support for one-off campaigns and fundraising appeals, as the school their kids went to needed help or a local charity got what they could give.
Now they’re wanting to do more, to have a greater, longer-term impact. Like many folks we’re working with at Momentum Waikato, they’re looking at ways they can make their generosity go further, now and forever.
We presently invest over $30 million in managed funds, with 29 place and purpose-based endowment funds and more about to be announced in coming months. We aim to grow the pooled regional endowment funds in our care to more than $100 million as quickly as donor generosity can support.
These philanthropic investment funds are the product of the combined efforts of many generous people who have engaged in one of three common acts of giving - a bequest, a trust transfer or a donation (one-off or ongoing).
Through donations into endowment funds that are smartly invested, we provide a vehicle for generous people to give back now and forever to great causes and projects in our region.
We actively encourage people to ‘go for gold’, the bottom loop in the Infinity Loop above, rather than just circulating around the top loop with a ‘one and done’ donation. Establishing a legacy fund in your name or donating to a regional endowment fund means there is an ongoing community benefit, to a cause that matters to you, forever.
So, how does this endowment model work? A fund established with $1,000,000 invested today would likely distribute $2.62 million of funding back into the community over 50 years, whilst at the same time growing the fund’s capital from $1 million to $1.74 million, thereby future proofing the donor’s 'Giving Forever'.
That’s all based on the six percent returns and four percent distributions that are typical of our investment funds. We smartly invest in diversified ways to maximise returns, with low to moderate risk as per our Statement of Investment Priorities and Objectives (SIPO), using expert investment advice from trusted professionals.
Of course, not everyone has $1 million, so you can donate today in smaller amounts to any of our existing public-facing endowment funds.
We have some donors that form a giving circle to establish a fund, and then decide on their grants together once a year.
Or for those who are cash poor but have an asset such as a house or a farm, we work with you to establish a bequest in your Will, so your giving will leave a legacy.
One such fund at Momentum started with its founder making multiple donations over three years that added up to $500,000 in 2018. By 2024 the fund had distributed $127,215, while its balance has grown to $570,450.
What’s even more impressive is that by 2044 its capital will have grown to $886,414, while distributing over $600,000 to the fund donor’s preferred causes.
If you’re curious and want to find out more about how you can plant a seed to give back forever, we would welcome the opportunity to discuss the details of establishing an endowment fund with you.
