Debunking the Myths -
Frequently Asked Questions About Richmond's Endowment
What exactly is the endowment? Just a big pot of money?
The University of Richmond's $1.7 billion endowment is actually 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 it with the condition that the University preserve the original gift in its endowment in perpetuity and spend only the annual income.
What is the role of the endowment?
Endowment income supplements tuition and other revenues by supporting 27% of the University's annual operating budget. Richmond's endowment income is the equivalent of $15,400 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 administrators. 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.
- Roughly 5% 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.
Why is the University conservative with spending when the endowment's earnings are so high?
Annual spendable income from the endowment is prudently targeted to be about 5% of its principal each year. This investment 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 $15,400 higher per student per year. Annual endowment income amounts to about $50 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 than 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 me by the endowment.
How does our endowment compare with other schools?
The University's endowment is ranked 44th overall among 774 college and university endowments in the United States by the National Association of College and University Business Officers (NACUBO). Other institutions outrank the University in terms of endowment per full-time, undergraduate student. Richmond's $542,000 of endowment per student ranks lower than Dartmouth ($932,000), Princeton ($3.3 million) and Rice ($1.6 million), for instance.
What is Spider Management Company?
Spider Management Company is the University's investment management affiliate. It is governed by its board of directors, 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.