Harvard University serves as trustee for more than 800 charitable trusts with a combined market value of approximately $1 billion. Harvard’s charitable gift annuities and pooled income funds are valued at more than $342 million and involve over 2,000 income beneficiaries.
Harvard Management Company's Trusts and Gifts Department supports Harvard University, its development staff, and its donors by managing and administering life income gifts. HMC provides a range of investment choices and trust vehicles to meet the needs of a diverse set of donors and has significant expertise in handling complex assets and estate gifts for the benefit of the University. The HMC staff works closely with HBS's gift planning office to help ensure that your gift arrangements operate smoothly and that you receive timely payments and tax information.
Harvard offers two investment choices for its charitable remainder trusts: the Endowment Option and the Tax-Efficient Option.
If you choose the Endowment Option, HMC will invest your trust alongside the Harvard endowment, which includes traditional equity and fixed-income instruments, real estate, private equity, hedge funds, and commodities. Under this investment arrangement, the payments that you receive from your trust will be taxed at ordinary income tax rates. Over the ten-year period ending December 31, 2015, a sample 5 percent trust invested in the Endowment Option produced an average annual investment return of 6 percent.
Read Harvard Management Company’s Endowment Report for FY 2016.
If you choose the Tax-Efficient Option, Harvard will invest your trust in a carefully selected group of indexed mutual funds designed to generate mostly long-term capital gain, dividend, and, at times, tax-exempt income. The asset allocation for these trusts is approximately 60 percent in equity and 40 percent in fixed income and cash, with the goal of long-term growth of principal. Over the ten-year period ending December 31, 2015, a sample 5 percent trust invested in the Tax-Efficient Option produced an average annual investment return of 5.1 percent.
Of course, investment performance is not guaranteed. Trust values may decline, resulting in lower payments for trust beneficiaries.