What is Valpo’s endowment?
The endowment is a permanent, self-sustaining source of funding that supports the students, faculty and academic mission of the University. While frequently referred to as a single fund, the endowment is actually made up of many individual funds invested as a single entity. Each year, a percentage of the annual return is distributed in the form of spendable income to support each endowed fund’s designated purpose. Earnings in excess of the spendable income promote growth within the endowment.
Why is it important?
A strong endowment ensures Valpo’s long-term financial stability, reduces the dependence on student tuition dollars, and improves our institutional agility, making it possible to take advantage of new opportunities as they arise.
How is the endowment used?
The majority of the funds that make up Valpo’s endowment are restricted to specific programs, departments, or purposes as designated by donors. Spendable income from these funds only supports the fund’s designated purpose, such as scholarships or faculty development. Unrestricted endowment funds, which make up a smaller portion of the total endowment, combine the financial stability of an ongoing funding source with the flexibility to use the funds to meet pressing needs.
What does it take to establish an endowment?
$50,000 is the minimum funding level to establish an endowed fund. A gift agreement that complies with the donor’s intent and University policies is developed and signed by both parties. The agreement includes the name and purpose of the fund, amount of the gift, and Valpo’s procedures for managing endowment funds.
How long before the endowment gift provides funding for the specified program?
The funds must be invested in the pooled endowment for a minimum of 12 months before they generate spendable income. The rate of spending on endowed funds determines the amount of spendable income available to the designated area.
How is the rate of spending determined?
The rate of spending on endowed funds is approved annually by the University’s Board of Directors at the time the annual budget is adopted. The amount available is based on a weighted average of prior spending, adjusted for inflation, and current market value of the endowment.
Who manages the endowment?
The Capital Planning and Investment Committee of the Board of Directors, with the support of the Valpo’s senior financial management team and the University’s independent investment advisors, manage the endowment.
