Endowed gifts allow your gift to remain intact forever while generating income for the program of your choosing.
Endowment gifts are critical to the LSU Health Sciences Center’s future growth and ability to achieve excellence. Endowed gifts are different from other gifts – the original gift is never spent, but instead permanently invested and the earnings are used to support the goals of the LSU Health Sciences Center.
Donors choose to establish an endowment for many reasons. First, it allows a donor to accomplish philanthropic goals that further the mission of the LSU Health Sciences Center. Donors have the comfort of knowing that the fund is in place permanently. Lastly, because endowments are established in perpetuity, a donor can honor a loved one in a meaningful way or memorialize a loved one through this special legacy gift.
Endowment gifts may be created through one gift or many gifts over time. They may be outright cash or gifts of stock or bequests. Like all gifts, endowed gifts are tax deductible as allowed by law and may be used for many purposes, including creating:
Endowed gifts are invested permanently and for the future. Each fiscal year, a percentage (usually four to five percent) of the endowment value can be used for the designated purpose of the gift. Any additional earnings are reinvested into the endowment. Endowed gifts require one full fiscal year to generate earnings. Because of the time needed to generate earnings many donors prefer to divide their gift, allocating the majority to the endowment and using a small percentage to provide funds for immediate use.
Example: John Smith creates a $500,000 endowment called “The Smith Family Legacy for Excellence in Medicine.” The endowed fund averaged 7% in investment earnings, providing the Department of Medicine with a much needed $25,000 to use for recruiting expenses, to send students and fellows to national conferences and to increase library resource offerings. The additional 2% (or $10,000) is reinvested into the endowment, increasing it to $510,000, meaning the next year (with similar market performance) the Department would have $25,500 to spend. Each year, the gift continues to grow, ensuring continued excellence in perpetuity.
* In special circumstances, endowments created for scholarships, professorships or chairs may be matched with public funds through the Louisiana Board of Regents. If you are interested in the Foundation office pursuing these additional funds, please ask to speak with our BoRSF Endowment Program Consultant.