FAQ: What’s the difference between giving to an “endowment” and making an “expendable” gift?
Will your gift be endowed or expendable?
It’s one of the most important questions you’ll be asked if you’re considering an estate gift to Duke. Understanding the differences between these types of gifts will help you determine the impact you want to have on the people and places at Duke that are most important to you.
Q: What is an endowed gift?
An endowed gift is a permanent, self-sustaining source of funding. Endowment assets are invested. Each year, a portion of the value of the fund is paid out to support the fund’s purpose, and any earnings in excess of this distribution are used to build the fund’s market value. In this way, an endowed fund can grow and provide support for its designated purpose in perpetuity. When you establish an endowment fund, or give to an endowment fund that already exists, you create a permanent legacy of support for Duke.
Please note: You may make a gift to an already established endowment fund in any amount, but to create a new endowed fund you must meet the minimum funding levels established by the Board of Trustees. Please see the Endowment FAQ for more information.
Q: What is an expendable gift?
An expendable gift is money given by a donor that is to be spent, in its entirety, right away. It is not usually invested for the long term but will be used to meet a pressing priority, possibly in the same fiscal year that Duke receives it. Expendable gifts can be for unrestricted or restricted use and have a large impact in the year that they are received.
Q: What are the impacts of endowment and expendable gifts to Duke?
If you were to give $100,000 to establish a scholarship endowment fund, the entire gift would be invested alongside the Duke Endowment. Each year, a distribution (usually between 3-5%) would support need-based scholarships. Any excess investment returns are reinvested in the fund allowing the fund, and the distributions, to grow over time. The gift then provides ongoing, growing support in perpetuity. Endowment fund donors are also provided with reporting each year about the market value and distribution from their endowment fund.
Alternatively, if you established a $100,000 expendable fund to support scholarships, that money would be used entirely in the year that it is received and will help fill the gap in what endowment fund distributions provide. Currently, endowed funds only provide 21% of our financial aid commitment each year, so expendable gifts are essential and make a significant impact in the year that they are received.
Q: Can I establish an endowment or make an expendable gift during my lifetime?
Indeed! A Duke development officer, including those in the Office of Gift Planning, can help you explore the options for establishing an endowment fund during your lifetime. You can also make an expendable gift at any time. The most common type of expendable gift made to Duke is through the Duke Annual Fund. Annual Fund gifts provide essential support – and an immediate impact – in every corner of campus.
Q: How do I know which type of gift is right for me?
Making a charitable gift is a very personal decision. Duke needs both endowed and expendable gifts to support its mission now and in the future. Determining the impact you hope to have may lead you toward one gift type versus the other. The Office of Gift Planning would be happy to have a conversation with you to help explore your options.
For all the ways that you support Duke, thank you! Please contact us if we can be of assistance in any way.
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