Donating 101
A N N UA L G I V I N G
What it is: Money for the School's current-year operating expenses. Annual gifts
supplement the operating budget and allows the School the ability to do more than what
tuition covers. Such gifts are usually unrestricted (meaning that donors allow the School to
spend them on whatever it deems necessary) and almost never spent on items outside the
operating budget.
Its practical equivalent: A checking account that helps the School accomplish its daily work.
What it buys: Teacher salaries and benefits, but also experiential learning programs,
teaching tools, educational technology and equipment, and continuing education for staff.
Why the annual fund goal goes up each year: Because operating costs go up and the
annual fund must help support the budget.
C A P I TA L G I V I N G
What it is: Major gifts to meet building and endowment needs the School cannot pay for
out of tuition funds.
What it buys: Usually brick-and-mortar building projects—new facilities or major
renovations—but sometimes endowment as well.
When you'll be asked for a capital gift: Schools tend to conduct capital campaigns once
or twice a decade. Because the needed gifts are large, you can usually pay your pledge over
three to five years.
Why the School asks for an annual gift even while you're making a capital gift: For
the same reason you have to pay your mortgage while you're putting an addition on your
house. e school must continue to meet its operating costs even as it's making major
acquisitions and improvements.
E N D OW M E N T G I V I N G
What it is: Major gifts to a fund that takes the pressure off the operating budget. Endowment
principal remains intact as the School spends a percentage of the interest income.
Its practical equivalent: A savings account. Most schools have a policy about how much
endowment income they'll spend each year so they don't invade the principal.
What endowment giving buys: e security to invest in faculty compensation or new
faculty positions (often called endowed chairs), funds for professional development,
enriched academic programs and resources, and financial aid.
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