ENDOWMENT - Education Endowment Fund

"ENDOWMENT - Education Endowment Fund " submitted by SchoolGrantsfor Editorial Team and last updated on Monday 9th January 2012

Endowments are funds that are given to schools from private sources: alumni, corporations, and other foundations. Private schools have a lot more of these types of funds available. State colleges have to rely almost entirely on Federal and State funds. Funds owned by an institution and invested to produce income to support the operation of the institution. Many educational institutions use a portion of their endowment income for financial aid. A school with a larger ratio of endowment per student is more likely to give larger financial aid packages.

Most colleges and universities, both public and public, have endowments that provide income to supplement other sources of operating revenue, such as tuition, donations, government grants and taxpayer funded assistance. Additionally, many private secondary schools, and even some elite private primary schools, also may have significant endowments.

Colleges use endowments to finance a range of priorities, including chaired professorships, capital improvements, and financial aid. The schools try to limit endowment spending to maintain a buffer to weather financial downturns and to ensure long-term stability.

The establishment of an education endowment fund ensures the sustainability of our education programs for the children and youth who need and want to make a better life for themselves through higher education.

Under growing pressure from Congress, the country's wealthiest colleges and universities are sharply resisting calls to spend more of their soaring endowments to expand financial aid and curb tuition hikes that critics say are putting college beyond the reach of ordinary families.

Although Congress has yet to approve any new rules on the topic, the debate on Capitol Hill about wealthy colleges and their endowments is prompting elite institutions to adopt friendlier policies toward lower-income students, a Washington, D.C., audience reported.

The wealthiest colleges can tap their endowments to give substantial financial aid to families earning $180,000 or more. They can lure star professors with high salaries and hard-to-get apartments. They are starting sophisticated new research laboratories, expanding their campuses and putting up architecturally notable buildings.

Other campuses are fighting to retain faculty, and some, with less cachet, are charging tuition that rival Harvard’s and scrambling to explain why their financial aid cannot match the most prosperous of the Ivy League.

Your gift will make a difference.
As an example, the income from an endowed gift of $100,000 will:

Endowment Headaches
Such a no-loan or limited-loan pledge came from these schools ever-growing endowments. From 2004-2008, the four-year rate of return on investments was 15.3%, 9.3%, 10.8%, and 17.2% respectively. With such investment successes and additional funds flowing in from alumni donors, it is easy to see why schools could begin to consider the loan pledge.

But then came the economic downturn and with it a crushing blow to these investments. First, 2008 saw a three percent average drop in the endowments for all schools. But that drop seemed almost inconsequential when contrasted with 2009 where colleges and universities saw an astonishing average endowment decline of 18.7%.

It was the worst average year for endowments over the nearly 40-year period the data has been tracked. It was also 50% higher than the previous worst year, an 11.4% decline in 1974.

The impact was even worse for those institutions with endowments topping $1 billion. On average the decrease stood at 20.5%, but for the three of the largest, Harvard, Yale, and Stanford, the decrease topped 25%.

Amid statewide budget cuts and rising education costs, a UC Berkeley student group is making the largest donation of its kind to the campus School of Optometry and, because of a campus gift-giving campaign, the $250,000 gift will be doubled.

This action by the UC Optometry Student Association is believed to be the largest donation made by current students to their campus in the history of the UC system, according to Lawrence Thal, the school's assistant dean for external relations and development.

The money - taken from the association's discretionary fund - was raised through years of student-led fund raising and will be put into the optometry school's endowment. The money will begin to go toward student aid for the incoming class of 2011.

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