Skip to main content

Frequently Asked Endowment Questions

Answers to common endowment questions at Central Michigan University.

Endowments serve as vehicles through which donors can provide permanent funding to University programs of their choice. Two categories of endowments are:

True endowments are funds received from external donors with the restriction that the principal (gift amount) is to be retained in perpetuity and cannot be spent. True endowments are submitted before the Board of Trustees for approval.

Quasi-endowment (funds functioning as endowment) are internal funds the University has decided to invest in an endowment account. Quasi-endowments are submitted to the President for approval.

Spendable Dollars is the title applied to the funds calculated and made available (allocated) as per the spending policy authorized by the CMU Board of Trustees. The dollars are transferred at the beginning of the fiscal year, for each qualified endowment. The fiscal year runs from July 1 - June 30.

The spending policy determines how much of the total return will be allocated and identified as spendable (amount available to distribute).

The Board of Trustees has set the endowment spending policy at 4.25% of a 20- quarter rolling market average, with an additional 0.50% allocated to an administrative fee. For endowments with less than 20 quarters of history, the calculation will be based off the actual amount of quarters. If an endowment's market value is less than the historical gift amount, the annual distribution will consist of the income earned during the fiscal year, if any.

This policy is designed to ensure that the purchasing power of an endowment fund is maintained into perpetuity. The policy, ideally, maximizes the probability that the distributions steadily increase from year to year.

For more information on spendable distributions please visit the Endowment Spendable Distributionspage.