Current use and endowed gifts—what’s the difference?

Current use gifts: See immediate impact

Current use gifts—directly expendable funds—allow Georgetown to say “yes” to good ideas now and ensure continued growth as a leading global university.

Current use funding complements the endowment and can be especially beneficial for start-up or other innovative programs, faculty research projects, and hands-on learning opportunities. Kick-starting initiatives with the human and financial capital to build momentum and measure success enables Georgetown to develop sustainable programs with lasting campus engagement.

Donors making a current use gift may direct it to the Georgetown Fund in support of undergraduate scholarships, the Athletics Excellence Fund, the Medical Center Annual Fund, the Law Annual Fund, Mission and Ministry, or another area of interest.

The distinct aspect of current use gifts is that they have full and immediate impact.

“Ask Georgetown deans and directors what current-use funds allow them to be, and you’ll hear the same words again and again: nimble, agile, responsive, and innovative.”

–R. Bartley Moore (F’87), Vice President for Advancement

What is the Georgetown Fund?

The Georgetown Fund is the beneficiary of unrestricted gifts through our Annual Giving program. If you do not designate otherwise, your current use gifts will automatically be assigned to the Georgetown Fund.

Georgetown directs 100% of Georgetown Fund gifts to 1789 Scholarships for undergraduate students. These scholarships are critical to fulfilling the university’s single highest philanthropic priority: ensuring access and affordability for all admitted undergraduate students.

Nearly 40 years ago, Georgetown made a transformational decision to admit students on a need-blind basis and to meet the full demonstrated financial need of all admitted undergraduates from the United States. This commitment—a direct outgrowth of the centuries-old Jesuit tradition of providing access to higher education—propelled Georgetown into the competitive ranks of the nation’s leading universities.

Increasing the number of scholarships funded through philanthropy helps fulfill the university's commitment to bring the best students to campus, regardless of their ability to pay, while enabling Georgetown to seize additional opportunities to keep the school competitive.

Endowed funds: Provide permanent support

Pie chart of endowment funds by purpose

Endowment income is the principle source of dedicated, long-term financial support for the university. It lends fiscal stability and enables the university to make dependable, long-term investments in high-quality academic programs and top faculty, as well as to ensure that the brightest students have access to a Georgetown education.

In growing the endowment—key to our ability to compete against other elite educational institutions—endowment gifts also increase the potential for larger investment returns through the power of compound interest.

Endowment FAQs 

When you create an endowment at the university—for instance to establish a scholarship or professorship—the money you contribute is invested in perpetuity and managed as a permanent financial asset to support your philanthropic objective. Each year, a portion of the fund is paid out—proportionate (over a period of years) to our investment earnings and currently about 5%—and used for the purposes the donor and the university agreed upon when the gift was made.

Georgetown has set different minimum funding levels for different types of endowments.

General

  • $100,000 will establish an unrestricted endowment for a particular school or division.
  • $100,000 will establish an endowment restricted to a specific purpose.

Financial Aid

  • $100,000 will create an endowed scholarship fund that supports U.S. students year after year.
  • $1 million will create an endowed scholarship fund that supports international students (preference may be given to a designated region).
  • $100,000 will fund a graduate fellowship.

Faculty

  • $8 million will fund a named university professorship (appointment approved and bestowed by the university president).
  • $5 million (or more) will fund the creation of a new named chair supporting a new position in a strategic growth area (approved by dean and provost/EVP).
  • $3 million will establish a named chair supporting an existing position; donor may designate the school and department or discipline.
  • $1 million will establish a named professorship for an existing position; donor may designate the school and initial department or discipline.
  • $1 million will establish a named term professorship for an existing position; donor may designate the school (and in the College, may also specify sciences or arts). Current use option is available to establish a single, 5-year term professorship at $250,000+.

Athletics

Merit-based scholarships

  • $100,000 will create an endowment that supports athletics scholarships (donor may designate the sport).
  • $1 million will create an endowment that supports men's basketball scholarships.

Coaching/programs

  • $100,000 will create an endowment that supports programs or coaches; donor may designate the sport.
  • $3 million will establish a named chair supporting an existing coaching position; donor may designate the sport ($5 million for men's basketball).
  • $5 million will fund the creation of a new named chair supporting a new position or area of strategic growth (approved by AD).

Georgetown’s investment office is responsible for investing the university’s pooled endowment (the means by which the vast majority of individual endowed funds are managed), adding value through asset allocation and the selection of investment managers and vehicles.

Much the way individual investors pool their assets in a mutual fund, each of the individual funds that compose the university’s endowment owns units in Georgetown’s pooled endowment.

The university’s investment and spending policies are designed to provide a stable flow of support for annual operations while preserving the future purchasing power of the endowment through asset growth and aligning with the institution’s values. The university’s Board of Directors sets policies and has final fiduciary responsibility for the endowment.

Did you know?

Georgetown’s spending rate policy reflects a trailing 5-year moving average of the endowment's market value two years in arrears and is approved by the Board of Directors. To learn more about the university’s endowment policies, visit the Investment Office website.

Georgetown a leader in 10-year endowment growth (FY 2007-2017)
Among U.S. News & World Report Top 20 Universities

Institution Growth
Penn 84%
Northwestern 60%
Georgetown 57%
Notre Dame 56%
Princeton 51%
MIT 50%
Stanford 44%
Washington (St. Louis) 41%
Columbia 40%
Cal Tech 40%
Johns Hopkins 37%
Duke 34%
Dartmount 32%
Cornell 25%
Rice 24%
Chicago 21%
Yale 21%
Vanderbilt 19%
Brown 17%
Harvard 4%
Source: U.S. News & World Report, NACUBO

No. The tax bill passed in December 2017 imposes a 1.4% excise tax on the net investment income of only certain institutions. The tax applies to private universities with at least 500 students if the aggregate fair market value of the university’s assets (other than those assets used directly in carrying out the university’s exempt purposes) is at least $500,000 per student. Georgetown does not meet these criteria, and we remain committed, as always, to growing our endowment.

Endowment funds may either be categorized as unrestricted or restricted:

  • Unrestricted endowments may be used for any purpose and usually go toward operating expenses or a particular project of the university’s choosing. Unrestricted gifts allow Georgetown to direct your support where it’s needed most—valuable flexibility to keep us nimble in embracing future opportunities.
  • Restricted endowments are funds established for a more specific purpose, designated by the donor, such as a department or scholarship. The restrictions are documented in a gift agreement and are binding on the university

You can name an endowment for yourself, your family, your friend, or your favorite professor—whatever is meaningful to you.

Once your endowment reaches a minimum designated level and starts generating spendable income, Georgetown will begin sending you annual reports detailing the value and use of your endowment fund.

Financial aid endowment donors learn about their scholarship and fellowship recipients, and professorship donors are updated on the activities of their faculty members.

When you establish an endowment, you begin a new relationship with Georgetown, one that becomes a lasting part of your family’s story.

Hybrid gifts: A powerful combination

Some donors establishing endowments choose to commit a portion of their gift—or an additional annual gift—for current use, funding that can be distributed immediately in support of their goals as they are making pledge payments to build up an endowed fund.

The example below shows how a hybrid commitment of $125,000, payable over five years, could establish a scholarship fund and begin providing direct scholarship support immediately—unlike a straight $100,000 endowment gift, where the named scholarship would be awarded after the pledge is fulfilled.

Straight endowment example

  YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
ENDOWMENT PAYMENT $20,000 $20,000 $20,000 $20,000 $20,000
TOTAL ENDOWMENT PAYMENTS $20,000 $40,000 $60,000 $80,000 $100,000
ANNUAL ENDOWMENT INCOME $1,000 $2,000 $3,000 $4,000 $5,000
SCHOLARSHIP ACTIVITY Endowment income pooled in general scholarship fund. Named scholarship awarded in perpetuity once endowment fully funded.
TOTAL PAYMENTS         $100,000

Hybrid example

  YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
ENDOWMENT PAYMENT $20,000 $20,000 $20,000 $20,000 $20,000
CURRENT USE PAYMENT $5,000 $5,000 $5,000 $5,000 $5,000
TOTAL ENDOWMENT PAYMENTS $20,000 $40,000 $60,000 $80,000 $100,000
ANNUAL ENDOWMENT INCOME $1,000 $2,000 $3,000 $4,000 $5,000
SCHOLARSHIP ACTIVITY Named scholarship awarded immediately with current use funds while endowment grows to $100,000 threshold.
TOTAL PAYMENTS         $125,000

This is not intended as, and should not be considered as, legal, tax, financial, or other professional advice. Georgetown strongly encourages you to seek independent professional advice to find the right giving strategy for your goals and circumstances.