FYI—Endowments


For those interested in how the fundraising side of things work, here is a little primer on endowments at universities. (Cross posted from engage.shc.psu.edu.)

With the generous gift commitment from Mr. and Mrs. Schreyer many folks have been asking me how it all works. I will begin by saying that the gift is payable over several years and we do not have all of that money in cash to spend! The body of the gift is well invested and only a portion is then used. This ensures that the gift will last in perpetuity. From the PSU Office of Development’s website: Reasons For Giving–Endowments

Endowed gifts are held by the University in perpetuity. The initial gift is invested, and a portion (typically about 5%) of the fund’s market value is awarded annually for the purpose designated by the benefactor. Thus, the benefactor who makes an endowment gift today can feel confident it will continue to support its intended purpose far into the future.

In other words, if we receive a gift of $1M the College will have $50k/year to spend in accordance with the donor’s wishes. So while we have been the grateful recipients of the incredible generosity of the Schreyers and many others there is much more growth yet to come. For example, in order to offer a $25,000 scholarship (one that would cover in-state tuition, room, board, and fees) we would need a gift of $500k. Many of our students still have a great amount of financial need and so we will continue to raise funds for the Schreyer Honors College.

 

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