Endowment Guide


What is the support fee?

The support fee is currently charged quarterly at the annual rate of 1% of the endowment value.  This fee is used to support the operations of the UGA Foundation, which includes personnel and costs associated with managing the Foundation.  



What Is An Endowment?

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.



What Makes Endowed Giving Different From Annual Giving?

Simply put - annual giving helps support continual operations, while endowed giving creates 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 by the donor 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. 



What Can My Endowment Support?

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. Your Development contact can assist you with those minimums.



Why Is A Fund Agreement Needed?

Whenever a gift is restricted for a particular purpose by the donor 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.



How Will My Endowment Grow?

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 inflation.

 



How Is The Spending Allocation Determined?

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 allowed.

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. 

More information is available in the spending policy which may be found in the policies and procedures under the resources tab.



How Will I Know How My Endowment Is Doing?

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.