Doug's Blog

The SEP and sustainable business models

Endowments have been something that I’ve thought a lot about over time. This recent article on Quartz started me thinking about them again: “This free online encyclopedia has achieved what Wikipedia can only dream of.”

Essentially SEP is a project to amass a resource that is authoritative in a way that Wikipedia cannot be. What is most interesting to me is that they used an endowment as a business model to keep the project self sustaining. It’s certainly not a model for high growth projects, but for something like this it ensure that fundraising can be a short term one time effort that lasts for generations. Most interestingly to me was that if the project were ever shut down the funds will be returned to the original donors with interest.

I really think that more charities should consider raising endowment funds, and some businesses would do well to bank funds and operate on the returns of the banked funds for expansion instead.

September 28, 2015