Endowments

An endowment is an aggregation of assets invested by a college or university to support its educational, teaching, and research mission in perpetuity¹. The reliable long-term support from an endowment enables institutions to increase student financial aid, make commitments to faculty, initiate pioneering research, develop stronger teaching programs, invest in new technologies, and maintain their libraries, laboratories, and other physical assets⁵. Charitable donations are the primary source of funds for endowments, which typically grow over time through a combination of donations and investment returns². Together, this enables an institution to make commitments far into the future, while assuring donors that their gifts will serve their intended purposes for as long as the institution continues to exist. Larger endowment spending helps mitigate tuition levels that would be necessary if tuition alone paid the true cost of educating a student³. Endowed funds designated for programmatic purposes provide an institution with flexibility to innovate and differentiate themselves from peer institutions through research, special initiatives, and operating support from stable, permanent resources.

• A minimum contribution of $25,000, which may be paid in increments over a period of up to five years
• Additional contributions can be made to the funds at any time, thereby increasing the principal and the revenue available to students.

• Student Financial Aid: Such institutional grant aid significantly reduces the actual amount students pay in tuition and reduces student loan debt.
• Teaching: Faculty chairs or professorships are often awarded to leading scientists and scholars who are contributing significantly to teaching and research in their respective disciplines.
• Research and Innovation: Endowment funds often support scientific and scholarly research. Universities are increasingly relying on their own resources to assist new faculty in developing their research programs because federal funds have lagged.
• Public Service: Investment income from these endowments funds endeavors for public service, which match the talents, research, and expertise of faculty and students with challenges and service opportunities in the area or state in which the institution is located.

1. “Understanding College and University Endowments” White paper by the American Council on Education (PDF)
2. Facts About College and University Endowments (PDF)
3. Facts About College and University Endowments (PDF)
4. Facts About College and University Endowments (PDF)
5. “Understanding College and University Endowments” White paper by the American Council on Education (PDF)