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Creating an Endowment or Scholarship
Endowment funds for the benefit of WVU are held by the WVU Foundation, a 501(c)(3) organization whose purpose is to receive and manage private contributions for the benefit of the University.
Endowments can be designated by the donor to impact a specific program or area within the University (including West Virginia 4-H, the Mountaineer Athletic Club and Potomac State College), or remain unrestricted to meet the most critical needs of the University. Donors can name a new endowment, and many choose to honor a loved one, recognize a favorite professor or create the endowment in their own name. Gift minimums apply to certain projects.
Donors may use either outright gift or deferred gift vehicles to establish named endowed funds. Outright gifts of cash or stock can be made completing the endowment immediately, or through a pledge over a period of up to five years. Deferred or planned gifts such as bequests, income producing gifts, life insurance and retirement assets can also be used to establish an endowment in the future when the gift is received.
The WVU Foundation staff works with each donor, on an individual basis, to tailor both the type of asset used and in preparing the guidelines for the administration of each endowed fund.
The purpose of an endowment is to provide ongoing support for the current and future activities of WVU and its affiliates. It is, therefore, a perpetual, self-sustaining source of permanent funding for the benefit of WVU. Each year, a portion of the endowment's earnings are paid out, while the principal (or corpus) is retained for future growth. As a result, it is imperative that the endowment grow its investment assets at a real (inflation-adjusted) rate that is sufficient to support an annual spending stream and preserve the purchasing power of the endowment in perpetuity.
The two key ingredients that are required for the endowment to grow its assets are: 1) new gifts and 2) investment performance. In order to achieve the latter, it is necessary to aggressively manage the endowment's investment portfolio so that, over the long-term, it can generate net absolute returns in excess of the required spending payout, thereby creating intergenerational equity.
Endowment Investment Policy
Endowments are invested by pooling the funds together in a manner similar to a mutual fund. The pooled investment fund is managed by professional investment managers and is broadly diversified across asset classes/investment managers. The Foundation charges a 1.35% annual investment/management fee on endowment funds to defray the cost of Foundation operations. All investments are overseen by the Investment Committee of the WVU Foundation Board of Directors.
Endowment Spend Policy
Endowment funds are invested so that a gift today will fund a donor’s objective on
an ongoing basis. The Endowment Spend Policy seeks to provide a consistent payout
each year while assuring that over time the value of the endowment will maintain
its purchasing power. The objective is to provide an annual payout that keeps pace
with inflation while also maintaining the value of the original gift over time.
Annual payout is determined as follows:
- New endowments receive a flat 4% payout in the first year.
- Established endowments receive the same payout as last year plus inflation (but not less than 3.25% or more than the 4.25% of the current market value).
- Endowments with a market value below original gift value of 0-5% will provide spend at 75% of the upper band or 3.1875%.
- Endowments with a market value below original gift value of 5-20% will provide spend at 50% of the upper band or 2.125%
- Endowments with a market value below original gift value of more than 20% will not provide spend.
This Policy is reviewed annually by a special board committee and annual payout is subject to approval by the Board of Directors.
Establishing a named endowed scholarship is an ideal opportunity to permanently link a donor's name, or the name of someone the donor wishes to honor, with the traditions and future of WVU. Just as the name attached to an endowed scholarship will be held in perpetuity at the University, so also will a service be rendered to future students, and through them, to West Virginia and the nation.
WVU Foundation Endowment Minimums and Pledge Guidelines
|Scholarships||Foundation Scholar - $1,000,000|
|Bucklew Scholar - $500,000|
|College Award - $100,000|
|FAD Award-Department Level - $50,000|
|FAD Award-Unit Level - $25,000|
|Distinguished or Department Chair||$4,000,000|
|Department/Program||Opportunities begin at $5,000,000|
|Building||Contingent on Construction Cost and BOG Policies|
|College||Opportunities begin at $10,000,000
Contingent on BOG Policies
- A Letter Of Commitment will be used for pledges of $50,000+
- Donors who wish to make a pledge under $25,000 may do so through reoccurring credit/debit card, ACH through their financial institution or annual fund pledge form
- Pledge Status Reports will be mailed in May and November of each year for pledges >/= $50,000.
- Electronic reminders will be emailed in November of each year for pledges < $50,000.
Note: Individual college's and school's endowment minimums may differ due to special
financial consideration. Donors should consult the individual college's or school's
website for a listing of its endowment minimums.