What is an endowment?
Just like a savings account, endowment funds generate income from the principal investment. Endowments create the foundation upon which universities build lasting financial strength and ensure academic quality. Once in place, endowments provide permanent support for teaching and research, student aid, and an abundance of other academic programs and activities.
These dollars can support scholarships, equipment and software upgrades, student research, and more. Distribution of funds will be subject to a specific set of guidelines formulated by The Ohio University Foundation in conjunction with you, the donor. You can create an endowment that will bear your name or the name of someone you wish to honor.
Because the financial requirements for various endowment and naming opportunities differ, donors are encouraged to discuss their ideas with a staff member from the Office of Development.
For more information please contact us via phone 800.592.3863, email or by using our web form.
How are endowment gifts managed?
Gifts to The Ohio University Foundation are managed in accordance with the Uniform Prudent Management of Institutional Funds Act ("UPMIFA") adopted by the State of Ohio on June 1, 2009. UPMIFA provides guidance to charitable organizations for the management and investment of endowment funds. Spending authority for endowment accounts not underwater will be the product of a 4 percent spending rate and a 36-month moving average of fair market value. These accounts will also be subject to a 2 percent administration fee. Should market performance result in an unsustainable change in available spending, the Investment Committee of The Ohio University Foundation Board of Trustees will address altering the spending rate accordingly. In the event that endowed accounts are underwater, spending will be restricted to an amount equal to 1 percent of the 36-month moving average of fair market value. These accounts will not be assessed the administration fee.
What is the difference between an endowment and a restricted gift?
An endowment is kind of like a bank CD; after it's been invested for a certain period of time (typically a full fiscal year), it generates returns that can be used in accordance with the account guidelines. The interest earned is the only portion that is ever spent. For example, if the John Doe Scholarship Endowment has positive returns in a given year, the university will use the interest it generates to award the scholarship in the following fiscal year. The benefit to this type of gift is that it continues in perpetuity; the drawback is that it takes a lot more money to have a big annual impact.
A restricted gift, on the other hand, is designed to be used as soon as the unit needs it. As a donor, you can limit where the gift goes (a school, college, department, or scholarship, for example). The benefit to this type of gift is that it provides funding immediately for the cause you want to support. The drawback is that after the money is used, it is gone. So, for example, if you want to make a gift to create a scholarship, you would have to fund it annually if you'd like it to continue to be awarded.