MAKING AN EXPENDABLE GIFT
What is an expendable gift?
The word “expendable” describes a gift to the University of Michigan Medical School, or another department, program or unit of the U-M Health System, that can be used immediately in its entirety as designated by the benefactor. This contrasts with an endowment gift, which creates a fund in perpetuity from which distributions are made annually, usually in an amount that is approximately five percent of the gift.
What is the advantage of an expendable gift?
An expendable gift provides the benefactor with the opportunity to have an immediate and considerable impact on the work of a particular teacher, researcher, clinician or student, on a particular program or area of research. An expendable gift can be targeted very precisely to the benefactor’s particular area of interest. An expendable gift can be made whether or not the benefactor has the capability to make an endowment gift large enough to generate a significant annual distribution. A $5,000 annual scholarship gift, for instance, offers the same benefit to a medical student as a $100,000 endowed gift. (The difference, of course, is that the endowed gift grows over time, and provides larger distributions over time as the corpus of the fund grows.)
To what uses can expendable gifts be put?
Expendable gifts provide valuable capital for the creation of start-up funds for new programs or projects. Up-front funding often acts as a powerful primer, providing the needed impetus to get a wonderfully creative idea launched. Expendable gifts, in this instance, often act as "venture capital” of a sort, providing the capital to get a program or project underway and prove its credibility and value. The demonstrated success of the venture then creates solid leverage for future gifts to support the program or project.
An expendable gift can also be used to meet life-saving needs, such as the transport of a very sick child to Ann Arbor by medical helicopter and to meet important health education needs in areas such as the importance of childhood immunizations and the value of regular preventive examinations for various cancers such as breast and prostate. Clinical trials for both children and adults that may lead to important new drug therapies or preventive measures can also be supported with expendable gifts. There is almost no limit to the variety of ways an expendable gift can make an immediate valuable difference to medical research, medical education or clinical care.
How can I make an expendable gift?
Expendable gifts can be made with cash or marketable securities. An expendable gift can also be made by bequest.
How are expendable gifts recognized?
An expendable gift, like an endowment gift, qualifies the donor to be recognized at all of the University’s recognition levels, depending upon the size of the gift.