Columbia's Endowment

How does a gift to the endowment work?

Endowment gifts do not fund programs directly, but are instead invested to generate income that in turn provides annual support for the beneficiary programs in perpetuity. By providing a dedicated stream of income—in support of a scholarship fund or professorship, for example—an endowment gift ensures the stability of that scholarship fund or professorship. Endowing an existing program, fund, or professorship, rather than a new one, is doubly beneficial because it frees up money that Columbia can redirect to other areas of need. Donors can work with fundraisers to identify how to structure an endowment gift to best support beneficiaries of the donors' choosing.

How much spendable income does Columbia’s endowment generate each year?

At its current value of more than $7.1 billion (as of June 30, 2007), the endowment can generate upwards of $355 million in spendable income each year—a significant amount, but still a relatively small share of Columbia's annual budget. In FY2008, less than 13 percent of the University's $2.66 billion budget will be funded by investment income from the endowment, a proportion half or even one-third that funded by endowment income at wealthier peers such as Princeton, Harvard, and Yale.

With an endowment worth almost $7 billion, why does Columbia need more money?

Having exceeded $7.1 billion at the close of FY2007, Columbia’s endowment may sound like plenty. But keep in mind that only a small fraction of its value may be spent each year, generally in the form of income generated by investments. Remember also that between Columbia’s 16 schools, four campuses, almost 3,500 faculty, more than 10,000 staff members, and more than 24,500 students, the annual operating budget is $2.66 billion. Finally, as at most universities, much of Columbia’s endowment is restricted to specific purposes.

How does Columbia's endowment compare with that of our peers?

In recent years Columbia has risen to seventh in overall endowment among U.S. universities, but there remains a significant drop-off after the top five. Moreover, those few schools with significantly larger endowments are in fact our closest academic peers, the very ones with which we compete for students and faculty. They include Harvard ($34.6 billion at the close of FY2007), Yale ($22.5 billion), Stanford ($17.2 billion), and Princeton ($15.8 billion).

Tuition is so expensive. Doesn't it cover most expenses?

In a word, no. The actual cost of educating most Columbia students greatly exceeds tuition, so Columbia ends up subsidizing the overwhelming majority of students—even those who pay full freight. That said, because of the relative size of our endowment, we do rely much more heavily on tuition income than do our better-endowed peers, and, since tuition cannot go up infinitely, we have to compete with less. Our New York City location, too—while key to Columbia's identity—makes doing business expensive.

Why is Columbia’s endowment so much less than that of our peer institutions?

Through much of the 20th century, Columbia’s assets were concentrated in Manhattan real estate, mostly in the land beneath Rockefeller Center, which was sold in 1985. The annual return on this property—fixed by long-term leases—provided a less competitive return than the managed investment portfolios of our peers.

The University also historically relied upon a small circle of donors for fundraising needs rather than cultivating a broad base of alumni. The Columbia College Fund, for example, started in 1953, years after other college funds (cf. Yale 1890, Harvard 1925); the first University-wide capital campaign was not realized until the 1980s.

Endowment-building is obviously a long-term process, but a concerted effort to build Columbia’s endowment today will help solidify the University’s future.

Why doesn’t Columbia just spend more of the endowment?

Income generated by Columbia’s endowment can be either spent or reinvested, but the principal—the endowment itself—is never spent down. Each year, Columbia’s Trustees determine what share of this investment income to spend.

In budgeting for FY2007, the Trustees decided to spend an amount equivalent to 4.4 percent of the overall endowment’s market value. As a matter of policy, this sum usually does not exceed 5 percent of the endowment, a share consistent with the target range for our peer institutions and many other nonprofit organizations. (In FY2007, for example, the average payout by the 76 colleges and universities with endowments above $1 billion was also 4.4 percent.)

This rate of distribution, also called the spending rate or payout, is capped for a number of reasons:

  • To preserve Columbia’s purchasing power in the face of inflation
  • To allow Columbia to withstand a bad market period
  • To grow the overall endowment more quickly

How is the endowment invested?

The formation of the Columbia Investment Management Company (IMC) in 2002 reflected the University's strengthened commitment to improving the long-term investment management of the endowment with the highest professional standards.

The IMC pools most of Columbia's assets, including endowment gifts, into a single fund that enables it to take advantage of different investment styles and vehicles to provide a higher total return over time while maintaining an acceptable level of risk.

For the fiscal year ending June 30, 2007, the total net return on the managed assets component of Columbia's endowment, after manager fees, was 23.1 percent. (Compare this to a 25.2 percent return for the MSCI World Equity Index and 6.1 percent on the Lehman Aggregate Bond Index over the same period.) Performance the previous two years, FY2006 and FY 2005, was also strong, with net returns of 18.4 percent and 17.7 percent, respectively.

Remember, of course, that investment performance can and will vary from year to year, and that Columbia administrators cannot budget in perpetual expectation of such high returns. But that said, under the Columbia Investment Management Corporation, our endowment returns now compare quite favorably with those of our peers and other not-for-profit organizations. Indeed, Columbia's endowment returns over the past three years place it well in the top quartile of University investment performance.

Directing Gifts

How can I support my school or division?

Visit the Gift Guide to review and select highlighted gift opportunities in your school or program. You can also direct your gift to your school or program when you give online.

Can I restrict my gift to a specific purpose (make a restricted gift)?

Absolutely! Many alumni and friends designate their gifts for purposes or programs that are particularly meaningful to them. From the Giving to Columbia home page, you can view gift opportunities by cause as well as school or program. Visit the Gift Guide to consider gifts related to the strategic directions that the University has identified.

How will my gift be recognized? How will I be informed of how my gift is being used?

All donors receive a certificate in honor of their gift. Columbia also supports many programs that recognize individual donors.

Examples include:

Donors of gifts over $10,000 receive personalized letters from President Lee C. Bollinger.

Scholarship fund donors receive thank-you notes from scholarship recipients and often get the opportunity to meet them at an event.

Donors of endowed chairs in the Arts and Sciences departments receive detailed summaries of the chairholder’s activities.

Donors of $1 million or more can become University Benefactors, which entitles them to special communications from President Bollinger.

How do I make a gift in memory or honor of someone?

When using the online gift form, you have the opportunity to direct your gift to a school or purpose and to designate your gift in memory or honor of someone. Simply enter the honoree’s name as well as contact information so we can inform the appropriate parties of your gift.

What naming opportunities, such as scholarships, buildings, or professorships, are available to donors?

There are many naming opportunities available. Substantial gifts directed to capital projects may offer naming opportunities for new buildings, classrooms, lounges, libraries, auditoriums, lecture halls, offices, conference rooms, and more. Opportunities also exist for donors to name fellowships, professorships, and class and student scholarships. Many of these opportunities can be found by searching the Gift Guide.

The types of naming opportunities available will vary from school to school. Generally, these opportunities have minimum donation amounts in excess of $1 million. However, there are naming opportunities at lower gift levels, with some named scholarships available for a $5,000 or $10,000 gift.

What happens to my gift if it's unrestricted?

Annual fund gifts of all sizes, particularly unrestricted donations, are one way of providing critical support for Columbia’s schools and programs. These gifts enable the schools and programs to allocate funds to their greatest immediate needs. Annual funds provide essential year-to-year support for financial aid, student services, and academic programs—areas that directly affect the lives of undergraduate, graduate, and professional students. Sometimes even very large donations are in the form of unrestricted endowment—offering the University the flexibility to address its greatest needs.

What happens to my gift if it's spendable or for current use?

Establishing a current-use or spendable fund for a specific program or department allows Columbia the flexibility of using the full amount of your gift for immediate needs. Like an unrestricted gift, current-use and spendable gifts provide critical, immediate support for Columbia’s schools and programs as well as undergraduate, graduate, and professional students. Annual Fund gifts, one of the most important kinds of gifts to the University, are often spendable.

How to Give

I want to make a gift, but not online. What are my options? How can I give? Whom do I call? Where do I mail my check?

The secure online gift form allows you to make a gift in a variety of ways. If you do not want to use the gift form, please follow these instructions:

To make a gift by credit card, call us toll-free at 866-GIFT-SYS (1-866-443-8797).

You can mail a check made out to Columbia University. Please include a note with instructions for directing your gift to ensure that it is properly credited. Mail checks to the Gift Systems Department at the following address:

Columbia University Gift Systems
MC 4520
622 W. 113th Street
New York, NY 10025
phone 1-866-GIFTSYS
fax 212-851-1240
e-mail giftsys@columbia.edu

Columbia also accepts cash gifts by wire transfer. To make a gift to Columbia by wire please contact Columbia’s Gift Systems department at giftsys@columbia.edu or 1-866-GIFTSYS.

For gifts of securities, please contact the Treasury Services Office at (212) 854-9694.

You can set up an estate gift or a life income gift through our Office of Gift Planning by e-mailing gift.planning@columbia.edu or by calling (212) 851-7857 or (800) 338-3294.

For questions regarding gifts not included above, or for more information, please contact us.

Are there volunteer programs I can participate in?

Giving to Columbia involves more than funds: we welcome alumni and friends who want to invest in connecting and reconnecting with students, faculty, and graduates. Volunteer opportunities include mentoring students and new graduates, connecting with alumni associations in cities across the globe, and participating in community outreach. For information about specific opportunities, visit the Volunteers section of this site.

How do I make a gift by wire transfer?

To make a gift to Columbia by wire, please contact Columbia’s Gift Systems department at giftsys@columbia.edu or 1-866-GIFTSYS.

How can I find out if my company will match my gift to Columbia?

To find out if your company has a matching gift program, use our convenient search engine.

Online Giving Form

What methods of payment do you accept online?

At this time, the gift form only accepts credit card payments. To use other forms of payment (e.g., EFTs or pledges), contact our Office of Gift Systems at (866) GIFT-SYS or via e-mail at giftsys@columbia.edu.

What credit cards do you accept online?

Visa, MasterCard, Discover, Amex

Is there a limit to how much (or little) I can give online?

Generally speaking, you are limited only by the size of your credit line. Please note that some card issuers will reject very large or small online transactions for security reasons.

How do I direct an online gift to multiple purposes?

Add them one at a time, as you would use a shopping cart on e-commerce Web sites. For each gift you’ll need to specify a school or other division and a specific gift purpose. Your card will be charged only once.

I want to give to a fund that isn’t listed on the form. What now?

Select "other" under school and fund and fill in the details of your gift in the comments box. We will contact you if there are any questions about your intent.

Planned Giving

How can Columbia help me with planned gifts such as life income gifts and bequests?

For general information, please consult the Planned Giving section of this site. For help in making your planned gift, please contact:

Office of Gift Planning
Columbia University
622 West 113th Street
New York, NY 10025
(800) 338-3294
E-mail: gift.planning@columbia.edu

I would like to remember Columbia in my will. What language should I use in my will or trust?

When planning a bequest to Columbia University, think about how you want your gift to be used. Here are some of the ways you can designate your bequest:

Unrestricted Gifts

These are especially valuable to Columbia because they allow the University to fulfill its highest priorities at the time your bequest arrives.

Restricted Purpose

Restricted gifts can support important University initiatives such as undergraduate scholarships, graduate fellowships, faculty salaries, or research priorities. You can direct your bequest to support any school or program that is a part of the University.

Current Use or Endowment

Establishing a current-use fund for a specific program or department allows Columbia the flexibility of using the full amount of your gift.

Below, you will find examples of language you can use to designate your bequest. Be sure to consult your attorney for assistance in making a bequest.

Unrestricted Bequest

I give _____________to THE TRUSTEES OF COLUMBIA UNIVERSITY IN THE CITY OF NEW YORK for its general purposes.

Restricted Bequest

I give______________to THE TRUSTEES OF COLUMBIA UNIVERSITY IN THE CITY OF NEW YORK
…to provide scholarships for undergraduate students attending Columbia College/the Fu Foundation School of Engineering and Applied Science/the School of General Studies.
or
…to provide fellowships to graduate students studying in the School of _____________ or Department of ______________.

If there is a particular area of study or program that you would like to support, please discuss your intentions with the Office of Gift Planning so that we can provide the appropriate language.

Endowed Fund

I give______________ to THE TRUSTEES OF COLUMBIA UNIVERSITY IN THE CITY OF NEW YORK to create a separate endowment fund to be known as the______________ Fund. The Trustees shall make distributions from the fund each year, pursuant to Columbia’s then current endowment spending policy, to support________________.

To create an endowed fund in your will, please contact the Office of Gift Planning to discuss the wording of your bequest language. This will assure that Columbia will be able to use the gift as you intend.

If I include Columbia in my will, whom do I need to tell about it?

Once you complete your estate plan, please inform the Office of Gift Planning. We would like to thank you for your generosity by inviting you to join The 1754 Society, our honorary society for alumni and friends of Columbia who have included the University in their estate planning. Your membership involves no dues, obligations or solicitations, but it does allow us to thank you and recognize you for the plans you have made, and it may inspire generosity in others.

What are the tax advantages of life income gifts and bequests?

Though some tax advantages will depend upon your unique financial situation, here is a general overview:

Life Income Gifts

The charitable deduction for payment-generating gifts, such as a charitable gift annuity or a charitable remainder trust, is the fair market value of the gift asset minus the present value of the income interest you retain.

Bequests

A bequest is deductible for federal estate tax purposes, and there is no limit on the amount of the estate tax charitable deduction your estate can take. In addition, bequests generally are not subject to state inheritance or estate taxes. In a large estate, the savings can be more than half the value of the bequest.

Please consult your tax or financial advisor for more information.

Can I accomplish more with a planned gift than an outright gift?

Carefully planned gifts can offer significant estate-tax and income benefits, while at the same time allowing donors to make larger gifts to the University than would otherwise be possible. Even though the University will not be able to use these gifts immediately, as it would with outright gifts, planned gifts are critically important to our long-term financial strength and help ensure our ability to meet the opportunities and challenges the future will present us. Please consult the Planned Giving section of this site to review the various types of planned gifts you can make to the University.

Will I need a tax advisor when I set up a planned gift?

Though the Office of Gift Planning can help you set up your gift, most estate-plan gifts will require the assistance of a professional financial or tax advisor.

How will I know my gift will be used as I intend?

The University goes to great lengths to ensure that all gifts are used for intended purposes only. For more information, contact our Office of Gift Planning at (800) 338-3294 or via e-mail at gift.planning@columbia.edu.

Can Columbia University serve as the executor of my estate?

No. Our internal policies prevent us from performing such a function.

Can I transfer my IRA to set up a life income gift, and avoid income tax on the transfer?

New legislation gives donors aged 70½ and older an opportunity to direct lifetime distributions from their IRAs to us without incurring income tax liability on the withdrawal. The provision will be in effect for just the 2006 and 2007 tax years. Distributions can total $100,000 per year, and must be made outright—they cannot fund a life income gift. Just e-mail us and we’ll be happy to give you more information about this new charitable incentive.

Donors younger than 70½ can make a withdrawal from their IRA or other type of retirement plan, pay income tax on the withdrawal, and donate the proceeds to us. These gifts can be made outright or can fund a life income gift and will generate a charitable deduction for the donor.

If I create a bequest or life income gift, will you continue to ask me for annual contributions?

Yes, we will, because gifts and annual contributions address two distinct needs—the University’s long-term and immediate financial strength. But, of course, how and when you give to Columbia is always up to you.

Tax Questions

What is Columbia’s Tax ID number?

Columbia University’s Tax ID number is 13-5598093.

What are the tax benefits of making a gift to Columbia?

It depends on the form your gift takes.

Cash

Individuals may deduct charitable cash contributions up to 50 percent of their adjusted gross income. If all deductible gifts in the year you make your gift exceed the 50 percent limit, the excess amount may be carried over as a deduction for up to five years.

Appreciated Securities

For a gift of appreciated securities, you may deduct up to 30 percent of your adjusted gross income. If you have held your gift of securities for more than one year, your charitable deduction will be the full, fair-market value of the gift, with no capital gains liability on its appreciation.

Personal Property

Gifts of personal property, like art, books, and collectibles, are fully deductible so long as they are relevant to our mission. We can advise you on this point.

Bequests

Although they do not generate a lifetime income tax deduction, bequests are exempt from estate tax.

Life Insurance

As with bequests, life insurance distributions to Columbia are not income-tax deductible, but are exempt from estate taxes. However, a lifetime gift of a fully paid-up insurance policy to Columbia University generates a deduction for the value of the policy.

What are the tax benefits and/or liabilities for life income gifts?

The charitable deduction for a gift that makes payments to you, such as a charitable gift annuity or a charitable remainder trust, is the fair market value of the gift asset minus the present value of the income interest you retain.

What kind of gift offers the most significant tax advantage?

It will likely depend on your individual situation. It is advisable to discuss potential gifts with your tax or financial advisor to determine which type of gift will offer the greatest tax advantage. For more information on the potential tax advantages of specific gifts, please consult the “Ways to Give” section of this site.

If I live in Hong Kong, do I receive any tax benefits for making a gift to Columbia?

To help our friends and alumni from Hong Kong support the University and receive income tax benefits, we have established the Columbia University Hong Kong Fund which is registered under Section 88 of the Inland Revenue Ordinance. Hong Kong residents who make their gifts to this fund may deduct the donated amount from their total income, up to a maximum percent of their income (35% in 2009-10).

You may make gifts to the fund through a wire transfer of cash. For transfer details, please contact us at gift.planning@columbia.edu or by calling Lenia Chaves at (212) 851-7473.

For more information about the tax benefits, you can consult the Inland Revenue Department Web site: http://www.ird.gov.hk/eng/tax/ach.htm

Bob Chiu, a ’71 Columbia SEAS graduate in Hong Kong whom you may know, is a trustee for the trust, and he may be helpful in providing additional information. You can reach Bob at +852 2298 3298.

If I live in the UK, do I receive any tax benefits for making a gift to Columbia?

Yes! Your gift can qualify for UK Gift Aid and simultaneously qualify as a deduction against your US taxes.

To help our friends and alumni in the UK support the University while gaining tax benefits, we established the Columbia (UK) Fund Limited. A sterling gift to this fund from a donor who is subject to UK income tax is eligible for Gift Aid relief. This increases the donor’s philanthropic impact.

Let’s say you are a UK basic rate taxpayer and want to give £100 to the Columbia (UK) Fund Limited. It will be possible to do so at a cost to you of £80. If you are a UK higher rate taxpayer, the cost will be £60. This can be achieved by using the Gift Aid Scheme.

When you make a gift to the Columbia (UK) Fund Limited, you should complete a Gift Aid declaration form. The gift is then treated as though it was a gift of an amount from which income tax had been deducted at the basic rate. This means that Columbia can reclaim from the HM Revenue and Customs the basic rate income tax which is deemed to have been deducted from that gift. If you are a UK higher rate taxpayer, you can then reclaim 20% - 25% of the grossed-up value of the gift by including details on your tax return.

For those who pay taxes to both the UK and US:

Americans resident in the UK have particular income tax problems with respect to structuring tax efficient charitable gifts because they are subject to two systems of taxation. In the past Americans typically chose either to obtain tax relief in the US or UK and accepted that the overall benefit would be limited by the constraints of the other tax system.

The Columbia (UK) Fund Limited solves that problem. It is simultaneously governed by English and US law. Columbia owns all of the share capital of the Fund, and it has made an election to be treated as a “disregarded entity” for US tax purposes. The Columbia (UK) Fund Limited is registered as a charity with the Charity Commission and simultaneously qualifies as a foreign branch of the US exempt organization.

The effect of this election is that a gift to the Columbia (UK) Fund Limited is eligible for income tax benefits in both the US and UK. Gifts to the UK Fund can be made in sterling, euros, and US dollars. 

  • For UK tax purposes, the gift is to the English charity and is therefore eligible for Gift Aid relief.
  • For US tax purposes, the gift is treated as a gift to a US qualified exempt organization that will give rise to a US income tax deduction.

 

To Make a Gift


By Cheque

Please send a cheque made out to Columbia UK Fund Limited and payable in pounds sterling to:

Eileen Flood
Administrator
Columbia UK Fund
19 Norcott Road
London N16 7EJ

Be sure to include a Gift Aid Declaration Form and let us know which part of the University you want to support.

By Wire Transfer
Contact Columbia’s Office of Gift Planning: gift.planning@columbia.edu
001-212-851-7857.

For More Details
Please contact Lenia Chaves, Assistant Director, Office of Gift Planning, at lc15@columbia.edu

Types of Gifts and Assets

What kinds of gifts can I make to Columbia?

Generally speaking, during your lifetime you can make an outright gift of cash, securities, or other property (e.g., real estate, personal property).

Upon your death you can make a gift through your will or revocable trust, or through a distribution from a retirement plan or life insurance policy.

You also have the option of making a gift, such as a charitable gift annuity or charitable remainder trust, that returns lifetime payments to you, your spouse, or other individuals.

What assets can I use to make a gift?

Almost anything: cash, publicly traded securities, even the balance in your retirement account. Other assets can be very valuable but are more complicated to administer and must be reviewed by us before we can accept them as gifts: real estate, closely held stock, and artwork.

Where can I find instructions for making a gift of stock/securities?

Detailed instructions describing how to make a gift of appreciated stocks/securities can be found in the “Ways to Give” section of this site.

What are the benefits of giving securities to Columbia?

Giving appreciated stock or bonds is usually more advantageous than giving cash. If you give appreciated securities held longer than one year, you can deduct their full fair market value, regardless of what you originally paid for them. Though your total deduction is limited to 30 percent of your adjusted gross income in any year, you can take any unused deduction over five succeeding tax years. And, you pay no capital gains tax on the donated securities. Please consult your financial or tax advisors before making any material decisions based on this information.

How does Columbia value my gift of securities?

If the security is transferred electronically through DTC (Depository Trust Corporation):

The gift is valued at the average of the high and low prices on the date of gift, which is the day the security is received into our brokerage account.

If the physical certificate is sent by US Mail:

The gift is valued at the average of the high and low prices on the date of gift, which is the postmark. If the certificate and the stock power are sent on different dates, the later date will be used.

If the certificate is hand delivered:

The gift is valued at the average of the high and low prices on the date of gift, which is the date the University takes physical possession of either the certificate or the stock power, whichever is later.

For restricted or closely held stock:

The gift is valued through an appraisal based on the fair market value for the restricted shares on the date of gift, which is dependent on the form of delivery.

Please remember that Columbia University sends this valuation as a courtesy only and is not required by the IRS to do so.

How long will it take for me to receive my valuation letter?

Generally you can expect to receive your valuation letter from this office within two weeks of us receiving your gift.

However, during peak times of gift receipts (December, January, and June), this can take up to four to six weeks.

It should also be noted that if securities are sent electronically without previous notification to Columbia, it can take several months for a gift to be traced to its original donor. Please remember that your broker does not necessarily pass on to Columbia your instructions verbally or in writing; to make sure that your gift is credited properly, contact our Office of Gift Systems at (866) GIFT-SYS (1-866-443-8797) or via e-mail at giftsys@columbia.edu.

What do I do if I want to give gifts of restricted/closely held stock?

You will need to contact our Office of Gift Planning at:

Office of Gift Planning
Columbia University
622 West 113th Street
New York, NY 10025
(800) 338-3294
E-mail: gift.planning@columbia.edu

What if I would like to give mutual funds?

The University accepts some mutual funds for gift purposes. The procedure for transferring mutual funds is different for each fund—including different funds at the same company. You will need to contact the Treasury Services Office at (212) 854-9694 before beginning any transfer.

Is there a minimum value for a gift of securities?

Yes. The University recommends that gifts of securities be valued at $1,000 or more, whether sent by DTC or in certificate form.

When do I need to give a gift of securities to receive a tax deduction in a given year?

Gifts that are transferred via DTC (the Depository Trust Corporation) must be received in the University’s account by the final business day of the calendar year. Since many brokers are busy and/or vacationing at this time, we suggest you give delivery instructions to your broker early in December to meet a year-end cutoff for tax purposes. Gifts sent by US mail must be postmarked by December 31; all other gifts must be delivered by December 31.

I’d like to donate a painting. Will you determine its value for my income tax deduction?

Unfortunately, the IRS requires that donors of artwork and collectibles secure an independent appraisal of the items to establish fair market value. The appraisal has to be related to the gift, too—an insurance appraisal won’t suffice. We can assist you, however, in securing an independent appraisal; contact our Gift Planning Office at (800) 338-3294 or e-mail gift.planning@columbia.edu.

I’m interested in establishing a charitable gift annuity. What financial provisions do you make for the income payments?

Your charitable gift annuity is treated as a general obligation of Columbia, backed by all its assets. Columbia is in full compliance with provisions regarding a nonprofit's offering of gift annuities and maintains an unbroken record in making timely payments to our annuitants.