An endowment fund is a permanent, self-sustaining source of funding. Under donor restrictions, the University is unable to spend the principal (original gift) of the endowment but it can spend the “income” that is generated through the investment of the gift in earnings.
Donors may restrict the purposes for which endowment “income” can be spent. The purpose could be to support a professorship, to fund lectureships or scholarships, or for general use at the discretion of the University. The terms of an endowment are documented in a formal endowment agreement that is executed by both the donor and the University. University Advancement is the holder of these agreements. The University has a legal, as well as an ethical, obligation to a donor to continually administer the endowment and all distributions in accordance with the terms of the agreement.
The sum of each endowment fund creates a form of permanent capital for the university. This provides funding to support the mission of the university and lends fiscal stability. The endowed funds are invested. The funds are invested by “buying shares” in UNCG’s Investment Fund. The University’s Investment Fund (UIF) is administered by an external investment firm. The investment pool is a diversified fund comprised of equities, fixed income, commodities, various specialized investments and cash designed to ensure that future growth is sufficient to offset normal inflation plus reasonable spending. The University’s Investment Fund is managed by the University Investment Fund Board. The Board attempts to provide a relatively predictable, stable, and constant (in real terms) spending stream to support budgetary needs.