An endowment is an investment in the future of the University of Georgia. When you use your charitable gift to establish an endowment, the gift is invested with two goals in mind: to provide spendable income for whatever specific purpose you have designated and to make the principal grow faster than inflation. The original principal (or gift) is never spent, and any investment return over allowed spending and fees is channeled back into the fund to keep it healthy and growing.
Simply put, annual giving helps support continual operations, while endowed giving creates the building
blocks for long-term growth. Many donors who create endowments also participate in annual giving.
Both types of giving are critical to the University's success, but an endowment is distinct and unique
in its impact on UGA.
Your endowment will be set up in a separate account within the UGA Foundation to carry out
the purpose specified in the gift agreement. Endowments are invested long-term in an investment pool
overseen by the Investment Committee of the Board of Trustees. At least quarterly, endowments receive
interest and market value adjustments based on the actual results of the investment pool, net of investment
management fees. More information is available in the
Policies & Procedures:
investment policy section.
What you choose for your endowment to support is
entirely up to you. You may designate your gift for any purpose (including unrestricted) that betters the University of
Georgia and that is acceptable to the University Administration and the Board of Trustees of the UGA Foundation.
Depending on what you intend your endowment to support, certain minimum
endowment requirements apply.
Whenever a gift is restricted by the donor to a
particular purpose for which there is not an existing endowment, a fund agreement is created. A fund agreement
ensures that the gift will always be used exactly as you intend. The agreement sets out your specific criteria
for how the University will utilize your gift and, if you desire, includes background on why this gift is important
to the University. Your Development contact will assist you with drafting and understanding the fund agreement.
A fund agreement also enables your endowment to be invested and the investment return to be used towards
the endowment's purpose. It also sets forth provisions for other requirements such as the support fee.
Your endowment will be invested with the objective of achieving
intergenerational equity while providing a reasonable spending
allocation to support the endowment's purpose. Intergenerational
equity for endowments is the concept of protecting future purchasing
power by growing your endowment at a rate that meets or exceeds
Once your endowment is fully funded and invested for at least one
fiscal year, an annual spending allocation will be calculated for
your fund. Waiting at least one fiscal year allows your endowment to
earn investment returns to support spending and increases the
probability of an annual increase in the amount available to spend
from your endowment. If there is no investment return in excess of
the original amount of the endowed gift, then no spending is
The annual spending allocation is based on a spending rate
that considers both the prior year spending amount and the endowment
value and is limited to available investment return. The spending
rate is determined annually by the Investment Committee in
consideration of maintaining the purchasing power of the annual
spending amount while maximizing endowment growth. Unused spending
allocations can be carried forward to the next fiscal year at a
maximum of 4% of the endowment value. Investment return in excess of
the spending allocation is retained within the endowment increasing
its size over time and, therefore, increasing the amount of support
generated for the donor's specified program.
More information is
available in the spending policy which may be found in the policies
and procedures under the resources tab. spending policy section.
Knowing the benefit the University receives year after year
as a result of your generous support is one of the keepsakes of the legacy you have created through your endowment. The University's
Office of Donor Relations stewards endowments by keeping you informed with annual reports highlighting the progress and growth
of your endowment.
You can also contact the University unit which your gift supports and they can provide you
with a current report on a real-time basis. Or, you can always contact the UGA Foundation
Office at (706)542-6677 and ask for the status of your endowment.
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