A financial endowment is a transfer of money donated to an institution, with the stipulation that it will be invested and the principal remain intact in perpetuity

Only the income/interest distributions can be expended

This allows for the donation to have a much greater impact over a long period of time than if it were spent all at once

Types of Endowments

  1. Endowment
    • Eligible to be matched by state lottery funds
  2. Quasi-Endowment
    • Not eligible to be matched by state lottery funds
  • Endowments contain a Corpus which is the initial contribution/pledge amount made (does not include qtr. fees and earnings)
  • Appreciated Interest is transferred to a spendable account on July 1st of each year
    • Endowment must be active for 1 entire fiscal year in order to spend interest earned
    • Appreciation = Market Value – Corpus
  • Spending Allocations are affected by investment returns and spending rates
    • Spending allocations were calculated as 4.0% of the average market value of the endowment for the past three years at December 31st.
      • Market value – Endowed Balance (updated with qtr. earnings and fees)