Giving Opportunities >
What is an endowment?
An endowment is a permanent fund that is held in perpetuity by the Shippensburg University Foundation and managed for the benefit of Shippensburg University, its students, faculty and programs. Endowment funds have a permanent life and are pooled together and then invested. Only earnings on the investment are spent, preserving the principal. These earnings are disbursed only for the purpose designated by the benefactor.
The importance of an endowment
The SU Foundation is committed to growing its endowment to achieve intergenerational equity maintaining long-term financial stability in order to enhance academic excellence.
The importance of a strong endowment cannot be overstated for the following reasons:
- As the percentage of state financial support has declined to just 38.5% of SU’s annual operating budget, endowment income has become pivotal to the quality and stability of the University
- Even though the SU Foundation has one of the best records in the Pennsylvania System of Higher Education, it still has a far small endowment than most private universities of its size and age
- A desirable endowment is equal to an institution’s annual operating budget. In 2007-2008, Shippensburg University’s operating budget was $87.9 million versus an endowment of $27.2 million
How is an endowed fund invested at Shippensburg University Foundation?
The Investment Committee, following the policy set by the SU Foundation Board of Directors, oversees investment activities, monitors performance of professional money managers, and ensures the prudent control of the investment of funds. The committee is also responsible for recommending investment objectives and policies and for implementing such policies. Each year, the Investment Committee recommends a spending rate to the Board of Directors which determines the annual payout to the income portion of each endowed account. The amount of the payout is based on the trailing three year rolling average of the market value of the endowment each June 30. Any excess income, net of management fees, is added back to the principal to create intergenerational equity that strives to maintain the purchasing power of each endowed fund. This practice, depending upon market conditions, is designed to steadily grow the fund therefore the generosity of today’s benefactors can have a positive impact on the university not only for this generation but for those generations to come.
The SU Foundation Board of Directors seeks superior investment returns, while guarding against principal erosion, utilizing best practices in asset allocation and engaging quality professional money managers. Assets are managed by several external investment managers who provide greater diversification of investment philosophy, judgment, investment opportunity and risk exposure while also providing a broader basis on which to compare and judge investment performance.
What is the minimum amount necessary to establish an endowment?
• The minimum amount to establish a new endowment with Shippensburg University for the benefit of
Shippensburg University is currently $25,000.
• This amount can be paid with an outright gift or in annual payments, typically with a five year or
ten year plan.
• Once the fund reaches the $25,000, it will pay out according to the purpose of the fund.
• Until $25,000 is reached, any interest earned is reinvested into the fund.