Understanding Duke Endowments 101
As we prepare to launch Duke’s centennial celebration in January 2024, it’s an apt time to reflect upon the resources that have sustained the university throughout its first century—and will continue to do so as we enter its next 100 years. Without question, endowed funding is one critical component of Duke’s enduring success.
An endowment is a named, permanent fund that provides perpetual support for Duke University’s people, programs, and activities. Despite its shorthand, Duke University’s Endowment—not to be confused with The Duke Endowment, an independent private foundation based in Charlotte, NC—actually refers to a pool of more than six thousand individual endowment funds (and counting!) and the contributions that have been made to them since Duke’s founding.
But what is an endowment fund?
Endowment funds at Duke are established through a written endowment agreement signed by the donor(s) and the university. Most of these funds are designated for specific purposes chosen by the donor(s) and set forth in the endowment agreement— supporting things like financial aid scholarships, student activities and experiences, professorships, faculty research, athletics, and departmental operations. Each fund’s designation is binding on Duke and cannot be changed unilaterally. In other words, the endowment pool is not at all akin to a checking account of discretionary funds that the university may spend at whim. To the contrary, Duke has a legal and fiduciary duty to manage and administer endowed funds in ways that are consistent with donor intent.
Assets in an endowment fund are invested and, each year, a percentage of the fund is distributed to support the specific purpose(s) for which the fund was established. Duke’s endowment assets are managed by DUMAC Inc., a separate nonprofit support corporation organized and controlled by Duke University. DUMAC, in consultation with Duke’s Board of Trustees, implements spending and investment policies formulated to ensure a consistent, sustainable stream of endowment revenue over the long-term.
New endowments must meet minimum funding levels set by the Board of Trustees. These requirements help ensure that each fund generates annual distributions sufficient to serve its designated purpose(s).
How do I make an endowment gift at Duke?
Endowments may be funded in several ways. A donor may fund an endowment with a current gift or pledge. In that case, the donor has five years to meet the applicable minimum funding level, beginning from the date the endowment agreement is signed.
An endowment may also be funded with a planned gift—a gift to be received by Duke in the future, such as a gift made through a will, retirement account, or trust instrument. With this approach, the endowment fund will be subject to the minimum funding level in effect at the time the gift is received, which may be higher than current levels. Many donors find that, although they may not be able to create their own endowed fund during their lifetime, they can accomplish this lasting impact with a gift through their estate plans, or through some combination of lifetime and deferred giving.
For more information about endowment giving at Duke or other ways to include Duke in your long-term plans, contact the Office of Gift Planning at (919) 681-0464 or giftplanning@duke.edu. Our charitable planning professionals are available to work with you and your advisors.
This information is provided with the understanding that neither Duke University nor the authors are providing legal, accounting, or other professional advice or counsel. Please consult your personal counsel about the financial, tax, and legal implications of any gift.
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