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 firstname.lastname@example.org or 800-826-6709.
The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results. Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.