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Endowment FAQ

What is the endowment?

The University of Richmond's endowment is a collection of more than 1,200 individual endowments, including scholarship funds, professorships, lectureships, library and book funds, and other endowed funds that have varying degrees of restrictions. Donors have given money and continue to give with the condition that the University preserves the original gift in its endowment in perpetuity and spends only the earnings to the extent that it keeps the corpus of the endowment intact over time.

What is the role of the endowment?

Endowment income supplements tuition and other revenues by supporting approximately 30% of the University's annual operating budget. Richmond's endowment income is the equivalent of $17,900 per full-time student. Substantial endowment support per full-time student is a characteristic of strong, stable institutions.

The University's endowment helps attract and retain top students, faculty and staff. It also allows them to pursue unique and critical initiatives, enhancing the University's status as a leader in higher education. Endowment income enriches the educational, cultural and social experiences of the campus and greater Richmond communities by supporting financial aid for students, professorships and fellowships, research opportunities, internships, academic and cultural programming, and many other initiatives.

What is the difference between the endowment and annual giving?

Annual giving helps ensure that the University is strong each year, while the endowment builds a strong foundation for coming years.

Annual Giving

  • Annual giving supports the operating budget and, thereby, benefits current students each year.
  • Gifts and pledges made to the Annual Fund are for one fiscal year (July 1-June 30).

Endowment

  • Endowment giving benefits current and future students. The original gift is invested in the pooled endowment fund.
  • Roughly 4% of each endowed fund's market value is paid out each year for its designated use.
  • That income supports the operating budget, taking pressure off tuition and annual giving to fund the entire cost of a University of Richmond education.
  • Pledges to the endowment can be paid over a period of years.
What is the University's spending policy?

Annual spendable income from the endowment is prudently targeted each year to be between 4% and 6% of a three year moving average of its market value with a one year lag. This spending policy ensures that the corpus of each endowed fund retains its purchasing power on an inflation adjusted basis. The endowment does not fund construction projects on campus.

Why aren't endowment fund distributions used to lower tuition?

They do lower tuition. Without the endowment, tuition would be $17,900 higher per student per year. Annual endowment income amounts to about $60 million and pays for portions of faculty salaries, scholarships and other expenditures.

With its strong endowment, why does the University need my annual gift?

Annual giving is vital support for the operating budget of the University each year. Education is not finite; there is always more that can and should be done. Annual giving allows the University to provide increased access to the latest technologies, additional research opportunities, outstanding programs, and excellent facilities for students. These are just a few of the ongoing, annual needs that are not met by the endowment.

What is Spider Management Company?

Spider Management Company, LLC is the University's investment management affiliate. It is governed by its Board of Managers, the majority of whom are Trustees of the University. Sound investment management will maintain the endowment's value to the University, and a constant infusion of new gifts will increase its value.