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What exactly does a University's endowment mean?

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  • What exactly does a University's endowment mean?


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Answer #1 | 29/12 2013 00:56
Endowments are made in multiple forms: In one-time gifts of fund or investment shares, in multiple year commitments of funds, or as beneficiary of life insurance or an estate/will bequeath. The $32+ billion endowment funds currently on account are made up of all of these, plus the interest accrued. Annual gifts totalled $273million in 2012. The endowment’s value is reduced by distributions to support Harvard’s operating budget, and other distributions for one-time purposes (“decapitalizations”). The operating distributions totaled $1.4 billion in fiscal 2012, and likely increased by 4 percent to 5 percent during the most recent year; recapitalizations, which can vary widely from year to year, were $308 million in fiscal 2012. These endowment monies also are available to support future capital and building upkeep and repairs, new builds/facilities, new equipment, etc. Without these funds, Harvard would not be able to offer the volume of Needs Based scholarships that they currently do (81% of students receive aid of approx $35,000 per year).

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