The University of Michigan has received special permission from the Internal Revenue Service to invest charitable remainder trust (CRT) assets alongside its endowment funds within its highly diversified, long-term portfolio. Now Michigan donors will have an opportunity to increase the power of their philanthropy, while enhancing personal returns from their planned gift to the University.
Through this initiative, the U-M introduces a new investment option for CRTs, the Michigan Endowment Return Strategy. Investment access to a wide range of asset classes within the endowment portfolio and the University's proven management expertise will offer significant growth potential for CRTs, benefiting the donor and the University.
- The U-M is among the first public universities to receive this special IRS ruling and joins such prestigious private institutions as Harvard, Stanford, Notre Dame, and the Massachusetts Institute of Technology in being able to invest charitable trusts with its endowment funds.
- Michigan has one of the top performing endowments among the nation's colleges and universities, achieving a 14 percent annualized rate of return over the last decade.
Here's how a CRT works:
- A CRT is established by a donor and may be administered by the University. The donor or designated beneficiary receives a regular distribution based on a percentage of the trust's principal for a certain period of time, usually the life of the beneficiary. After the trust ends, its assets go to Michigan to be used according to the donor's wishes. Learn more about Charitable Remainder Trusts.
Click here for Q and A's about MERS
To learn more about how a charitable remainder trust and MERS may work for you, please contact the office of gift planning, at 866-233-6661 or by email at giving2@umich.edu.
"I am favorably impressed with the University's track record in managing charitable remainder trusts. I am pleased that the new Michigan Endowment Return Strategy will enhance both the payout to my son and the gift to the School of Social Work," said Dr. James Curtis, a recent CRT donor (see related story).
"This ruling places Michigan at the forefront of maximizing the benefit of donors' generosity," said Shari Fox, U-M's assistant vice president and director of gift planning. "This new opportunity promises to enhance donor returns and increase the impact of their philanthropy to the University."
