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, Potomac State College and WVU Institute of Technology), 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 Management

The WVU Foundation Board of Directors oversees the endowment and establishes policies to ensure the efficient management of endowed funds.  Endowments can be designated by the donor to impact a specific program or to meet the most critical needs of the University and its affiliates.

Investment Policy

Endowments are invested by pooling the funds together like a mutual fund. The investment pool is managed by professional investment managers, is broadly diversified across asset classes/investment managers with oversight provided from the Board Investment Committee. WVUF charges an annual investment/management fee of 1.35% on endowment funds to defray the cost of WVUF operations.

Endowment Spend Policy

Endowment funds are invested so that a gift today will fund a donor’s objective in perpetuity. The objective is to provide an annual payout that keeps pace with inflation while maintaining the purchasing power of the original gift over time. Annual payout will be determined as follows:

1. New endowments received during the year are included in the spend calculation and made available for use by the University the following July 1st which provides the opportunity for earnings growth during the first year. Donors may also provide cash spend gifts which are made available for immediate use by the University.
2. Spend Rate(s) are as follows:
1. Established endowments receive a payout of 3.75% of the prior twelve quarter market value average of the fund.
2. To preserve and grow endowment principal, funds with a market value below original gift value up to -10% will receive a reduced payout of 2.25%
3. Funds with a market value below original gift value > 10% receive no spend.
3. Endowments funded with pledge payments will be invested and upon reaching the minimum endowment amount become eligible for Spend payout the following year.

Reporting and Monitoring

1. Endowment Spend will be declared in August for the next fiscal year using the prior twelve quarter market values as of June 30, 20xx.
2. Spend projections are provided for years II, III, IV to assist with financial aid and planning.
3. Endowment information is provided to WVU Budget Officers on a regular basis.
4. Accumulations of cash can be reinvested and/or spend deferred to address the needs of the University, College and/or Unit.

This Policy is reviewed annually by the Finance & Administration Committee and payout is subject to approval by the Board of Directors.

Scholarship Endowments

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. 

More information on scholarship endowments

WVU Foundation Endowment Minimums and Pledge Guidelines

• 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.