Today, UCLA is one of the country's preeminent research universities. As state assistance shrinks and the costs of higher education rise, private support becomes critical to the University's growth and ability to maintain its standards of excellence. The generosity of alumni and friends has nourished UCLA during its first century and made possible extraordinary achievements in teaching, research and public service.

Many of these alumni and friends realize that UCLA's strength in the future depends on building a foundation through endowment today. Following are the answers to some of the questions frequently asked by those who are considering an endowed gift to The UCLA Foundation.

What is an Endowed Gift?
An endowed gift is a gift that The UCLA Foundation holds in perpetuity. The gift is invested, and only a portion of its average annual investment return is used for purposes specified by the donor. To guard against the eroding consequences of inflation, the remaining investment return is added to the principal. The goal is to ensure that the principal maintains its value over time. Thus, a donor who creates an endowed gift today can be confident that it will grow and continue to support UCLA in the years to come.

Can an Endowed Gift be Directed to a Specific Area?
As with any gift to UCLA, an endowed gift offers alumni and friends the opportunity to have their names, or the name of a loved one, linked to an area of the University in which they have a special interest. Each donor's gift is a unique expression of the causes and concerns that matter most in his or her life. Some donors create unrestricted endowments, recognizing that the needs and challenges of the future will differ from those of today. Unrestricted gifts are used for the highest priority needs on campus, and provide flexibility as these needs change.

Other donors choose to direct their gifts to programs of special concern to them, knowing that these additional funds provide an opportunity for those programs to grow and excel. Some donors choose to endow a professorship in the academic discipline that inspired them as students. Many donors create undergraduate scholarships or graduate fellowships to aid deserving students. Others choose to support medical research, in areas of particular importance to them.

How are Endowments Managed?
The UCLA endowment consists of two funding pools separately managed by The Regents of the University of California, and The UCLA Foundation. The Regents and the Foundation strive to preserve both capital and the purchasing power of each of the University's endowments. Their approaches vary, however in terms of investment strategy, spending policy, performance benchmarks, and reporting. Despite a sluggish economic and business environment, and thanks primarily to successful portfolio management and generous benefactors, UCLA's endowment continues to grow.

Among other important efforts, endowments support the teaching and research of individual faculty members, departmental and interdisciplinary research, students, and the University's libraries. Endowments are critical to the University's goal of meeting the needs of specific departments and programs, as well as the needs of the overall campus.

To ensure that the income an endowment earns is sufficient to achieve a donor's intent, both now and in the future, the University has established minimum support levels for various types of endowments. The minimum amount required to establish an endowment may change from time to time to reflect our changing economy.

What are the Types of Endowments?
The following categories are examples of the various types of endowments a donor may create:

Faculty Chairs - Endowed Professorships
An endowed faculty chair provides the resources to fund a distinguished faculty member's work, reward academic achievement, and enable the professor to pursue new areas of research or innovative teaching methods. Endowed chairs are often the reason UCLA is able to attract and retain the finest scholars. Being appointed to a professorship is one of the highest honors an academician may receive, and those so honored are recognized around the world as leaders in their fields.

A gift of an endowed chair links a donor's name in perpetuity to the accomplishments of the succession of scholars whose works the gift ultimately will support.

Faculty Research Funds
Endowed research funds are essential to the fulfillment of UCLA's academic mission. UCLA is committed to the support of innovative research that will affect the broader community. Income from endowed gifts supports the work of many of the University's most distinguished senior scholars, as well as outstanding junior faculty members and promising graduate students.

Graduate Student Fellowships
Graduate students assist faculty members and play an important role in shaping current and future research at UCLA. The University competes with other top institutions to attract the best advanced degree candidates. Critical shortages of Ph.D. candidates, in many disciplines, are predicted for future years. Donors who endow a graduate student fellowship today help ensure that in the years to come, UCLA will have the resources to attract and retain such outstanding scholars.

Undergraduate Scholarships
Scholarships allow UCLA to meet one of its highest obligations: to attract and provide educational opportunities for numerous students. Endowed scholarships are an ongoing reminder of the important role generous donors play in the lives of successive generations of UCLA students. Talented and deserving students, who otherwise might not be able to attend UCLA, often find that a scholarship can make all the difference.

A scholarship can be established in honor or memory of someone important in a donor's life. Donors also can decide how their scholarship is to be awarded; on the basis of financial need, merit or both.

Endowed Lecture Series
An endowed lecture series enables UCLA to bring distinguished speakers to campus, giving students and faculty the opportunity to interact with important leaders, scholars and professionals in various fields. Guest lecturers not only bring a new dimension to the academic environment, but also frequently provide stimulus for innovations in research and education.

Endowed Discretionary Funds (Dean's Fund and Chancellor's Fund)
Endowed discretionary funds allow UCLA to respond to unexpected opportunities and provides overall flexibility to the University's programs. Whether specified for use under the direction of the Provost, Dean, or Chancellor, such funds ensure that UCLA will meet the challenges of today and tomorrow.

Endowed Library Funds
Access to knowledge is a vital component of the University's mission. A strong library system provides the foundation for current and future scholarship at UCLA. Endowed discretionary funds for its libraries allows the University to keep pace with its faculty's innovative curriculum and research activities, and gives it the flexibility to make special acquisitions. Endowed preservation funds enable UCLA to save from deterioration the writings, visual images, and recordings of our times for tomorrow's historians and researchers.

What Types of Assets Can be Used to Fund an Endowed Gift?
A gift of cash is the easiest and most direct way to create and endowment with The UCLA Foundation. Endowments also can be established with gifts of appreciated securities that are publicly traded (including mutual funds) and, in many cases, stock from closely-held corporations. Donors have funded their endowments with gifts of real estate. It even is possible for a donor to create an endowment through a future gift from his or her estate.

Are There Any Tax Savings from an Endowed Gift?
A gift to create an endowment offers benefits to the donor in the form of advantageous tax treatment under both state and federal laws. Depending on the type of asset given, and the type of gift arrangement selected, it is possible for a donor to enjoy savings on income taxes (including capital gain) and even transfer taxes. The income tax savings can be immediate.

What are Some of UCLA's Special Gift Arrangements?
In addition to creating endowed funds through outright gifts, The UCLA Foundation offers a full range of planned gift opportunities. These opportunities include bequests, charitable remainder trusts, charitable gift annuities, The UCLA Foundation Pooled Income Fund, remainder interests, and charitable lead trusts. These gift plans allow donors to enjoy tax savings while turning appreciated assets into income for themselves or others.

The appropriate arrangement for each donor varies according to the donor's age, the type of assets being used to fund the endowment, and the donor's own financial needs and goals. Planned giving professionals are available to discuss the many methods and benefits of creating an endowment at UCLA, and to help donors and their advisors select the gift arrangements that best suit their needs. h

Are There Advantages to Funding an Endowed Gift With Appreciated Securities?
Some donors have marketable securities that have grown substantially in value and are subject to capital gain taxes if sold. The tax laws make it possible to create any endowment with a gift of appreciated securities at a remarkably low after-tax cost. Such a gift generally qualifies the donor for an income tax charitable deduction equal to the value of the securities given. The donor may also avoid the long-term capital gain tax on the unrealized capital gain.

Can an Endowment be Part of a Will or Other Estate Plan?
Donors can establish endowments through their Wills or living trusts. A donor might choose to create an endowment by making UCLA the beneficiary of the final distribution from his or her retirement plan. Doing so can help the donor minimize or avoid the extreme taxes often imposed on such assets. A UCLA planned giving professional can provide donors and their advisors with the appropriate bequest language.

Can an Endowed Gift be Funded Over a Period of Time?
Endowed gifts to The UCLA Foundation can be pledged over a period of up to five years. Some individuals have established endowments using planned gift arrangements. In fact, many have found that they are able to create a more significant endowment and, in some cases, augment their current income, when they take advantage of one of The UCLA Foundation's special gift plans.

Can Real Estate Be Used to Fund a Gift?
A gift of a personal residence, farm, vacation home, or other real estate can be used to fund a future endowment. Such a gift also allows the donor to enjoy significant tax benefits. With a gift of real estate, donors may receive an immediate income tax charitable deduction and may avoid the long-term capital gain on the unrealized capital gain.

How Can I Obtain More Information?
To explore the opportunities and rewards of creating an endowment at UCLA, please contact the Office of Planned and Major Gifts. The staff is experienced in planning gifts that meet each donor's individual needs and interests. They can provide detailed information about The UCLA Foundation's endowment guidelines, life-income gift arrangements, funding options, and endowments to specific areas or programs.

The information on this site is presented in summary form. ALL DONORS MUST CONSULT WITH AND RELY EXCLUSIVELY ON THEIR OWN ATTORNEYS OR OTHER FINANCIAL ADVISORS FOR TAX AND LEGAL ADVICE.