What is an endowment?
An endowment is a permanent investment in the future of Wayne State College. Endowment funds are invested, rather than used as cash for immediate needs. The amount given by the donor (the “principal”) is never spent. A portion of the earnings from the endowment fund is distributed annually for the donor’s intended purpose (i.e. scholarships). The undistributed earnings stay in the fund, thus growing the endowment and allowing for larger distributions in the future. Wayne State Foundation has over 300 donor-designated endowment funds that support Wayne State College. Most of the endowments are for scholarships, but other funds support specific college departments and even the beautification of campus. At the time the donor makes a gift, the Foundation prepares an agreement that documents the donor's intended use of the endowment and the Foundation’s administration of the fund.
Who invests the endowment funds?
The Wayne State Foundation Executive Committee sets an investment policy for the endowment investment pool and chooses investment managers to invest the funds. The investment managers’ investment performance is consistently reviewed by the Foundation’s Audit and Finance Committee. The Foundation’s current investment manager is Commonfund, a non-profit investment company specializing in serving the needs of colleges and universities.
How is the principal invested?
The endowment funds are diversified between fixed income and equity holdings. The asset allocation is determined by the Wayne State Foundation Executive Committee.
How much is made available for distributions?
The Wayne State Foundation Executive Committee establishes policies to determine the amount of the endowment that is to be made available to be awarded from endowment earnings. The current policy sets the payout target rate at up to 4% of the average market value of the endowment fund over the prior three fiscal years.
What is the minimum funding level for an endowment?
The minimum funding level for a named endowed scholarship or program endowment is currently $25,000. Donors can choose to spread their contributions over a period of up to five years.
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