Blueprint of an Endowment: Current Year Gifts vs. Endowed Gifts

When investing in TASIS Dorado, your generosity serves as a life-long gift that makes a difference well beyond the classroom. Your gift helps ensure TASIS Dorado remains a world-class school that transforms lives

Our School depends on the generosity of our community to help us advance our mission, strengthen our program, develop new opportunities, and enhance the overall TD experience. Still, we recognize the many factors that need to be considered when making the decision to give a gift to our School.

When determining where to direct a gift to TASIS Dorado, please consider a gift to our endowment. A gift to the endowment is a core investment in not only building our School's future but also reinforces a commitment to TASIS Dorado. Please allow these important questions to help guide you to your answer.

Q. What is an Endowment?

An endowment is a private-independent school's "savings account" and acts as a permanent, self-sustaining funding source. It provides additional annual resources to maintain and improve the quality of education that the School offers its students. For most schools, an endowment is not yet a difference-maker. Instead, an endowment should be considered in the context of "legacy," meaning an investment that will have the most impact on future generations of students rather than the present generation.

Endowments receive gifts of money that are invested. Each year, a portion of the fund's value is paid out to support the fund's purpose, and any earnings above this distribution are used to build the fund's market value. In this way, an endowed fund can grow and provide support for its designated purpose for an extended period of time. When establishing an endowment fund or giving to an existing endowment fund, donors create a permanent legacy of support for TASIS Dorado.

To ensure financial sustainability, the School makes certain that income earned from an endowment is spent wisely and equitably. In doing so, the institution ensures endowments maintain real value over the years, so future generations benefit as much or more than current and past generations.

Q: What is an Endowed Gift?

An endowed gift is money given by a donor to be invested in perpetuity, with the interest income available to spend on activities consistent with donor intent. Unlike a current year gift, or expendable gift, the endowment principal, or initial gift, is not spent.

A gift to an endowment is a donation of money or property to a nonprofit organization that is invested. The institution uses the resulting interest income for various purposes and is used to grow the endowment further. Endowments are designed to keep the initial donation amount intact while using the investment income for specifically targeted efforts. Donors can specify how the gift is to be used or leave that decision to the institution. 

Gifts to the endowment are held permanently by the School and are invested according to policies established by the TASIS Dorado Board of Director's Finance & Investment Committee. The School spends funds from the investment in accordance with the donor's wishes and the School's Endowment Spending policy.

Q. What is a Current Year Gift?

A current year gift - also known as an expendable gift - is money given by a donor that is to be completely spent in the immediate present on activities consistent with the donor's intent. It is not invested in an endowment for long-term use but will be used to meet a pressing priority, typically in the same fiscal year that it is received. This type of gift can be for unrestricted or restricted use and will significantly impact the year it is received.

Current year gifts see immediate impact and provide TASIS Dorado with the flexibility to approve innovative ideas, new programs, dynamic initiatives, and unexpected challenges while ensuring continued growth as a leading private institution in Puerto Rico. 

Supporters making a current year gift enable TASIS Dorado to develop sustainable programs with lasting impact. Gifts may be directed to the TASIS Dorado Fund, scholarship, financial aid, "Excellence in Teaching Fund," professional development, programmatic innovation, facility improvement, and equipment upgrades, among other special projects.

The distinct aspect of current year gifts is that they have a full and immediate impact, often within the current fiscal year.

Q: What are the impacts of an endowed gift vs. a current year gift?

If a donor were to give $100,000 to a scholarship endowment fund, the entire gift would be invested alongside TASIS Dorado's endowment. Each year, the distribution of funds (typically between 3-5%) would support merit-based scholarships. Any excess investment returns are reinvested in the fund allowing the fund, and the distributions, to grow over time. The gift then provides ongoing, increasing support for an extended period of time. Endowment fund donors are also provided with annual reporting regarding the market value and distribution from the endowment fund.

Alternatively, if a donor were to give a $100,000 current year gift to support scholarships, that money helps fill any gaps and is used entirely in the year received. It's important to remember that current year gifts are essential and make a significant impact on the year they are received.

Q: Can I establish an endowment during my lifetime?

Indeed! When creating a restricted endowment, donors and the School must reach a written agreement concerning the use of the funds. While the School prefers gifts of unrestricted endowment, assuring the greatest flexibility, donors may restrict their endowments for purposes in accordance with the School's mission, vision, values, and strategic plan. The minimum gift required for establishing a separate restricted endowment is $50,000. To get started, please contact the Advancement Office to explore options for establishing a restricted endowment fund.

Q: How do I know which type of gift is right for me?

Making a charitable gift is a very personal decision. TASIS Dorado needs both endowed and current year, or expendable, gifts to support its mission now and in the future. Determining one's impact may lead towards one gift type versus the other. The Advancement Office is happy to help explore donor options.

Definitions and descriptions of endowment, current year gifts, and other details based on content gathered from ISM (Independent School Management, Inc.) and other higher education sources.
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