Gifts and Endowments

A gift is a voluntary transfer of things of value, usually in the form of cash, checks, securities, real property, or personal property. Gifts may come from individuals, corporations, foundations, and other sources. The University of Pennsylvania can use gifts for unrestricted and restricted purposes, as designated by the donor. The University makes no commitment of resources or services in return for gifts, other than agreeing to put the gift to use as the donor designates.

An endowment is a permanent fund of property or money bestowed upon the University, the income of which is used to serve the specific purpose for which the gift was intended.  More simply, an endowment is a gift fund where the original gift is invested for the purpose of generating income to provide financial support today and in the future.

 

Unrestricted Gifts are resources received from a donor where there are no restrictions or conditions on how the resources may be used.

Restricted Gifts refer to resources received from a donor where the donor has placed limitations or conditions on how or when the resources can be used.

Gifts may be used for Operations (e.g., salary expenses, publish a newsletter), Capital (e.g., gift to build a building), or Endowment (e.g., gift to establish a professorship).

In the case of an operating or capital gift, a gift fund (BEN Financials fund number 6xxxxx; 65xxxx for a capital gift) will be established.

Three Main Categories of Endowed Gift Funds

True Endowment: Gifts where the donor has stipulated that the principal is to be maintained inviolate and in perpetuity and that the principal is to be invested for the purpose of producing present and future income.

Term Endowment: A gift where the donor has designated the gift as an endowment, but has given the University the right to invade the principal either upon passage of time or the occurrence of an event

Funds Functioning as Endowment/Quasi-Endowment: Gifts the Trustees of the University of Pennsylvania, rather than donors, have determined are to be invested as an endowment.  Since these funds are internally designated rather than externally restricted, the Trustees have the right to decide at any time to expend the principal.

Stewardship

It is the responsibility of the school, center, or department to ensure that those funds are used according to purpose and in a timely manner.  If you have any questions about the restrictions to a specific endowment fund (4XXXXX) assigned to your org, please contact your Business Administrator.

If your department is interested in soliciting additional endowed gifts from a donor, you should contact the Development and Alumni Relations department to coordinate the effort. You may find that they have already begun discussion with donor.