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A strong endowment ensures that there is an enduring source of funding for immediate and future needs. Endowments grow over time to create a legacy of learning, research, and scholarship as they extend the impact of the donor’s generosity beyond a lifetime.
The principal is invested and a portion of the fund’s value, currently 4.5 percent, is made available each year to support the purpose determined by the donor. To guard against the eroding consequences of inflation, the remaining portion of investment return is then added to the principal. The goal is to ensure that the principal maintains its purchasing power.
Endowments can be created with gifts of cash, securities, and other assets. They can be established through one-time gifts, estate gifts, and multiyear pledges. Although the minimum amount required to create an endowment fund is $25,000, larger amounts are recommended or required for certain purposes. Gifts at these levels may offer donors naming opportunities. All gifts at the minimum endowment level, as well as cumulative lifetime giving of $25,000 or more, qualify donors for recognition as members of the UMD Chancellor’s Circle.
To create an endowment fund
Contact the University of Minnesota Duluth by email or by calling 218-726-7989 to reach a development director, who will assist you and/or your professional advisor in creating a fund in accordance with your wishes.
The development director will help you draft, complete, and sign a fund agreement outlining the gift’s purpose, along with the investment and payout.
Upon receipt of the gift, the U of M Foundation will establish the fund and distribute the annual payout amount for your designated purpose.
Managed for long-term impact
The University of Minnesota Foundation (UMF) manages the investment and payout of endowed funds with a long-term view, to provide designated programs with a stable revenue source. The year-to-year change in the value of an individual endowment fund is affected by several factors, including the amount and timing of additional gifts to the fund, market gains and losses, and the amount of disbursements from the U of M Foundation to the University to support the fund’s designated programs.
The UMF endowment is invested by UMF Investment Advisors (UMFIA), a non-profit subsidiary established in 1998 to focus on long-term investment goals. UMFIA has a portfolio of wide-ranging, highly diverse asset classes across geography, markets, types of securities, and styles of investment management, designed to balance higher-returning investments with those expected to yield a more stable return.
The UMF endowment has performed well over the years. The investment goal is to achieve an annualized return of five percentage points in excess of inflation, thereby providing designated programs with a revenue source that keeps pace with inflation.
View the most recent UMF quarterly endowment report.