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Endowment Type Definitions

Simply stated, an endowment is a special fund whereby the gift amount or principal is invested and a portion of the income earned on the principal is spent as directed by the endowment agreement. The gift amounts are held in perpetuity, or in other words forever.

True Endowment:
A true endowment consists of funds donated by a donor, with a signed endowment agreement directing the use of the income. Again, the principal is held in perpetuity.

Quasi Endowment:
This is when the University, rather than a donor, determines to retain, invest, and use earnings for a specific purpose.

Proposed Endowments:
Proposed endowments are individually tracked by Financial Services until sufficient funds are received to reach the minimum level to establish an endowment. Additionally, endowments that have been fully funded but are waiting for name approval or agreement signatures are also individually tracked as proposed endowments. These funds receive interest income each month based on the cash balance. When the minimum funding level is achieved and all necessary documents are complete, the endowment is created.

Underwater Endowment:
This is when the market value is less than the original principal, in other words, when fund 32 balances are negative. If an endowment is "underwater" at the time of calculation, it will not receive a spending allocation.


Endowment Training