What Is a Donor-Advised Fund?
A donor-advised fund, which is like a charitable savings account, is an easy, cost-effective way to support Northwestern and other causes and organizations important in your life. If you have an existing donor-advised fund, you may direct it to transfer cash or other assets to non-profit organizations including Northwestern.

What Are the Northwestern University Compass Funds?
The Compass Funds are donor-advised funds established through Northwestern University. Northwestern alumni, parents, and friends can establish a Compass Fund and recommend the funds to Northwestern and other nonprofit organizations of their choosing over time.

How Do the Compass Funds Work?
Any member of the Northwestern community (including individuals, trusts, corporations, estates, and private foundations) can establish a Compass Fund at the University. Donors advise Northwestern to distribute funds from their Compass Funds to the University and other US 501(c)(3) organizations. At least 50 percent of all distributions must be to Northwestern. The University maintains and invests the funds and provides record-keeping, tax-reporting, and fund balance and activity information.

What Are the Advantages of Establishing a Compass Fund?

  • Tax advantages: Donors may receive an income tax deduction as allowed by law in the year the donor transfers the funds into their Compass Fund. Donors do not need to wait until the funds are distributed to use a permitted deduction.
  • Competitive fees: There is no cost to establish a Compass Fund. The management fees are competitive with other funds.
  • High-quality investment options: Northwestern partners with Kaspick & Company to manage its Compass Funds. Established in 1989, Kaspick has more than $5.8 billion under management and offers high-quality investment options to its higher education clients like Northwestern.
  • Ability to assign alternate advisers: A donor may appoint a family member to make disbursement decisions on his or her behalf during the donor’s lifetime. A donor may also appoint a successor adviser for a period of up to 25 years after the donor’s lifetime.
  • Ease and flexibility: Northwestern Compass Funds provide an easy and flexible way to benefit Northwestern and other favorite charities from one account.

What Are the Requirements and Fees?

  • Minimum initial contribution: $250,000
  • Distribution requirement: At least 50 percent of all distributions must be to Northwestern.
  • Minimum distribution: A single distribution to any one organization must be at least $1,000.
  • Termination: The fund terminates at the death of the donor or—if the donor has a successor adviser—upon the death of the adviser, up to 25 years after the death of the donor.
  • Fees: A combined annual investment and management fee of 0.775 percent is charged to each account.

For more information or to establish a Compass Fund at Northwestern, please contact Northwestern Gift Planning at giftplanning@northwestern.edu or 800-826-6709.

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A charitable bequest is one or two sentences in your will or living trust that leave to Northwestern a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I, [name], of [city, state, ZIP], give, devise and bequeath to Northwestern [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to Northwestern or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate, or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the gift tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and receive an immediate federal income tax charitable deduction. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to Northwestern as a lump sum.

You fund this trust with cash or appreciated assets—and receive an immediate federal income tax charitable deduction. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to Northwestern as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and Northwestern where you agree to make a gift to Northwestern and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.

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