Frequently Asked Questions
Q: What is an endowment fund?
A: An endowment fund is a permanent, self-sustaining source of funding. Endowment assets are invested. Each year, a portion of the value of the fund is paid out to support the fund’s purpose, and any earnings in excess of this distribution are used to build the fund’s market value. In this way, an endowment fund can grow and provide support for its designated purpose in perpetuity. When you establish an endowment fund, you create a permanent legacy of support for Kennedy-Western University.
Q: How much money does it take to start an endowment?
A: The KWUAA Board of Trustees has set different minimum funding levels for different types of endowments:
$30,000 will establish an unrestricted endowment for a particular faculty.
$20,000 will establish an endowment restricted to a specific purpose, such as Library, Knowledge Management System.
$50,000 will establish an unrestricted financial aid endowment, such as a scholarship supporting undergraduates.
Q: What else does it take?
A: An endowment agreement. This agreement between the donor and the university alumni association permanently defines the purpose of the fund. The agreement also outlines KWUAA's standard procedures for managing endowment funds.
Q: Whose name is on the endowment?
A: You can name an endowment for yourself, your family, your friend, your favorite professor, your company – the choice is yours. Your endowment will be recorded as “The [Name of Your Choice] Endowment Fund.”
Q: My lawyer knows about endowments. Can I have him/her prepare my endowment agreement?
A: KWUAA uses standard language for endowment agreements to ensure consistency in management of the funds. As we work with you to establish the endowment, we will discuss your preferences and suggestions with you.
Q: Do I need to sign an endowment agreement or meet a minimum gift level if I want to give to an existing endowment?
A: No. You can make a gift of any size to an existing endowment fund without signing an endowment agreement. There may be an existing endowment that reflects your interests and to which you can add your support. Also, many donors who have established endowment funds in the past continue making gifts to them over time. The larger a fund is, the more it can do each year.
Q: Exactly how is the distribution from an endowment used?
A: The spending distribution from each endowment fund is used to support the fund’s direct costs, as well as a portion of indirect costs. Pursuant to current KWUAA policy, 91.7% of the distribution from financial aid endowments provides direct scholarship support for students, with the balance applied to help defray a portion of the indirect costs associated with KWUAA’s financial aid programs. In the case of non-financial aid endowments, including those supporting professorships and programs, 77.27% of the distribution provides direct program support. In the case of professorships, salary, fringe benefits and other expenses relating to a chair holder’s teaching and research are considered direct support, with the balance used to defray indirect costs such as space and academic and administrative support.
Stewardship and Recognition
Q: How do I find out about my endowment after I have made my gift?
A: Once an endowment reaches the minimum funding level and starts generating spendable income, KWUAA will begin sending you annual reports detailing the value and use of your endowment fund. Financial aid endowment donors learn about their scholarship and fellowship recipients, and professorship donors are updated on news of their chair-holders. When you establish an endowment at KWUAA, you begin a new relationship with KWUAA will write to you—and later to your family—every year with an update on what your gift is making possible.
Q: Can I meet the students who benefit from my scholarship or fellowship?
A: In most cases, yes. Each year, the KWUAA hosts a scholarship and fellowship celebration to bring together scholarship and fellowship donors, recipients, and honorees.