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An endowment is one of the most powerful ways you can support ASU.
Annual income generated by an endowment provides a continuous, reliable resource stream for the future. Endowed funds guarantee that ASU will be able to provide core support for its mission, particularly as federal and state support for higher education falls. They give ASU administrators the ability to make and pursue long-range, strategic plans in the areas of:
Scholarships and graduate fellowships.
Faculty chairs, professorships and research fellowships.
Research programs, centers, and institutes.
Colleges, school, and academic departments.
Because these gifts guarantee enduring support, an endowment opportunity may allow you, as donor, to name the faculty position, scholarship or program you create for yourself or in honor of a special person.
ASU Foundation Endowment Fund donors are able to watch their gifts inspire and encourage, creating excellence today with the assurance that their investments will fortify the university and its posterity, touching countless lives for generations to come.
You can create an endowed fund at ASU through the gift of an asset that is invested and managed by the ASU Foundation.
An endowment is a permanent gift that is invested for the long term to provide sustainable financial support for the university. The gifted funds yield investment returns based on global market conditions and provide an annual payout, which is determined by the investment committee, to support the donor’s designated use.
An endowment is essential to the financial stability of any university, public or private, large or small. Funding from the state may be counted on for base budget allocations, but it doesn’t allow for programs that go beyond the basic, propelling a university from good to great by supporting programs worthy of national and international attention and state funding has been decreasing over recent years.
An endowment allows ASU to:
You. As an endowment donor, you can designate an ASU school, college, institute, scholarship or program to benefit from your generosity. That beneficiary will spend the annual payout in a manner consistent with your intent when you establish your gift.
You have flexibility in how you establish your endowment: with an outright gift, a pledge or an advised bequest. But depending on the purpose of the endowment, ASU has established guidelines for minimum gift amounts that will ensure the annual investment payout is sufficient to support the intended programs. A general endowment can be established with a minimum gift of $25,000. Scholarships, fellowships, faculty professorships and chairs, and other program-specific endowments have higher minimum gift requirements.
Absolutely. You or others may continue to support your endowment through additional contributions.
In 2004, the ASU endowment was $250 million. As of 2017 it is $665 million. All you need to do to realize the value of every individual gift to the endowment is look at ASU’s astonishing growth and evolution. Without endowment gifts, ASU would not be what it is today and that same permanent, sustainable support is what will create the ASU of tomorrow.
The board of directors empowers an investment committee — board members, along with representatives from the university, the Alumni Association and the financial community — to oversee the endowment. The committee works through an outsourced chief investment officer arrangement offered by BlackRock, Inc to manage the investment portfolio. The OCIO model is preferred by many institutional investors, offering shorter reaction time to market volatility, and expertise in global and complex markets. Endowment gifts such as yours are combined and invested as a single fund, increasing investment opportunities and minimizing market access fees.
Endowment returns for fiscal year 2017 were 12.8 percent. It’s important to remember, however, that an endowment’s growth is a long-term investment, and to consider extended performance as well. Over 10 years the endowment yielded an average annual compound investment return of 4.2 percent.
An endowment is established through a formal gift agreement executed between the donor and the ASU Foundation. This agreement documents the donor’s spirit and intent in establishing the fund, the purpose of the endowment, administrative instructions, and specific criteria or other instructions to the ASU beneficiary. If the donor is funding the endowment with an estate gift, the donor may also sign a statement of testamentary provision.
After your gift is fully funded and the paperwork is complete, your fund enters the foundation’s routine allocation cycle. A payout is calculated after the close of each calendar year and provided at the beginning of each fiscal year, July 1, to the beneficiary you chose. If your gift meets the payout threshold during the calendar year, payout begins the following July 1.
For new endowments established during a calendar year, the initial payout is approximately 3.75 percent of the gift value. After that, the foundation uses a constant-growth spending policy that increases the payout annually, consistent with the current-year inflation rate, subject to a cap and floor — 4.25 percent and 3.25 percent — of the 12-quarter average market value. Ensuring the payout is within the cap and floor provides a stable and predictable payout ASU beneficiaries can count on for budgeting and long-range planning.
University foundations across the U.S. apportion a small percentage of an endowment gift as a fee for managing the gift and the endowment. At ASU, an annual institutional advancement fee of 1.5 percent of the 12-quarter average market provides discretionary support for the university and the foundation.
The Foundation does not charge an intake fee on gifts given to the endowment, however, all gifts to ASU and its affiliates, endowment and otherwise, are subject to the ASU policy that allows 95% of a gift to be restricted to a particular purpose at ASU and the remaining 5% is unrestricted for use to advance the University. This means that 95% of an endowment gift will be placed in the endowment fund to grow and be used per the donors' restrictions.