What is an endowment?

An endowment is a gift to the University where, typically, only a portion of the interest accrued on the endowment is used to support a program or programs. Because the principal – i.e., the original gift – is invested and not spent directly, the interest income generated by the endowment will last into perpetuity and support distinctive programs, scholarships, research, professorships, buildings – as per the donor’s wishes – for generations to come. Excess income will be reinvested in the endowment fund helping grow the fund and protect it from inflationary pressures.
 

Why does the endowment matter?

The endowment lends fiscal stability to the University of Utah and provides critical resources which enable the university to offer competitive tuition, support high-quality academic programs, attract top faculty, and ensure that the brightest students have access to a the University of Utah education.
 

How large is the University of Utah’s endowment?

Refer to the Endowment Pool Update
 

What is the objective of the University of Utah’s endowment?

The Investment Office’s primary objective is to provide stable and increasing cash flow to fund operating budgets, thus providing future students and faculty with the same level of spending resources, adjusted for inflation, as current students and faculty.
 

Who sets endowment policy?

Endowment policy is set by the chief investment officer, State Law (UPMIFA), and the members of The Utah state Board of Regents, The University of Utah’s Board of Trustees and an Investment Advisory Committee.
 

How is the endowment managed?

Fiduciary oversight for the endowment is vested in state law, the Utah State Board of Regents, the University of Utah’s Board of Trustees, and an Investment Advisory Committee. The University’s Chief Investment Officer oversees the management of the investments and is accountable to these committees.

The goal for the management of endowment funds at an academic institution is to ensure that the endowment provides future students and faculty with the same level of spending resources, adjusted for inflation, as current students and faculty while also providing a stable and increasing cash flow to fund current operating budgets. In order to accomplish this, endowment funds of the University of Utah are invested under the total return concept of the Uniform Prudent Management of Institutional Funds Act (UPMIFA), whereby “net appreciation, realized and unrealized, in the fair value of the assets of an endowment fund” may be appropriated for expenditure. UPMIFA was adopted into state law under Utah Code 51-08 and it is the governing regulation for the University’s endowment funds. University Regulation Library Rule R3-050A: Endowment Pool Investment Guidelines.
 

Why give to the University of Utah’s endowment?

Endowments are particularly important because they lend stability and predictability to the University’s revenue stream. They also help neutralize reliance on other revenue sources such as tuition, research grants, philanthropy, or state funds, for example, which can vary from year to year.

Since the U’s endowments are invested prudently in a balanced and diversified portfolio, the University can be confident that interest income will be relatively consistent from year to year. This liberates the University to recruit outstanding students with the help of endowed scholarships, attract top researchers and professors with the help of endowed chairs, repair and maintain physical facilities through endowed maintenance funds, and launch innovative research or student programs through other specific endowments, and more.
 

Is there a minimum gift to establish an endowment?

At the University of Utah, an endowment fund can be set up with a gift totaling at least $25,000. The initial endowment can increase over time with additional gifts from the donor, prudent financial management, and reinvestment of a portion of the interest income.
 

Where can I learn about Endowment and Investment Accounting?

Visit the Endowment and Investment Accounting page to learn more.