How an Endowment Works

Donor-funded endowments at the university work much like a mutual fund—each new fund is assigned shares or units in the university’s Common Investment Fund (CIF) at the previous quarter’s market value. When a fund is established for a specific purpose (such as scholarships, program assistance, etc.) the available income, distributed according to the spending policy, is directed to that purpose. The annual income distribution is allocated to each endowment account in the overall investment pool based on the number of shares assigned to the account as of July 1 of the given year.

Any earnings above the spending rate are retained in the investment account to steadily grow the endowment and support earning potential.

The endowment is carefully managed to ensure funds are available in perpetuity; only a small percentage (4.4 percent for fiscal year 2021) of the market value is spent each year, so that the endowment—and legacy of our donors—endures for the life of the university.

Here is an example on how the endowment and policy work together to make a difference:

Based on an average investment return of 6.8 percent, a $100,000 endowment established July 1, 2001, for scholarships, now has a market value of approximately $156,928 as of June 30, 2021, after having provided scholarships totaling $111,272 over the 20-year period.

For more information on MSU Endowment performance, please visit: https://givingto.msu.edu/endowments/performance.cfm

How You Can Make an Endowment Gift

There are many ways to establish an endowment, and the arrangements for every gift can be personalized to fit your specific needs. Gifts of cash and securities are traditional forms of support; however, planned gifts including bequests, charitable gift annuities and charitable remainder trusts may allow you to make significant contributions that may not otherwise be possible during your lifetime. All endowment gifts are 100% tax deductible.

For more information, please contact the Spartan Fund directly.