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The Endowment

Q & A

WHY ARE ENDOWMENTS SO IMPORTANT TO PRIVATE UNIVERSITIES LIKE ROCHESTER?

The endowment is a perpetual asset of the University—just as its buildings and land are assets—that provides the ability to offer an extraordinary education to our students. Every alumnus of the University received support from the endowment during their time as a student, even if they did not receive financial aid.  The endowment thus represents the legacy to the present—a result of the past generosity of the University's supporters.

As a private institution, Rochester is sustained by its own independent sources of funding rather than relying on the support of taxpayers, as is the case with public universities.

FINANCIALLY SPEAKING, WHAT EXACTLY DOES THE ENDOWMENT DO FOR ROCHESTER?

The endowment is a source of income, with the specific purposes of that income decided by donors. Donors frequently specify a particular purpose for gifts, creating endowments to fund professorships, teaching, research, lectureships, scholarships, fellowships, prizes, maintenance, or general educational support.

Although distinct in purpose or restriction, endowment funds are commingled in an investment pool and tracked with unit accounting much like a large mutual fund.

HOW HAS THE ENDOWMENT GROWN OVER THE YEARS, AND WHAT IS ITS CURRENT VALUE?

Since 1849, when founding Trustee John Wilder started a campaign to establish an endowment at the University of Rochester—leading the effort with a gift of $10,000—continuous growth of the endowment has remained critical to Rochester’s future. Investment appreciation, new gifts, and the launch of The Meliora Challenge: The Campaign for the University of Rochester have helped the endowment grow to approximately $1.8 billion.

WHY DO YOU NEED MORE MONEY FROM ME WHEN ROCHESTER ALREADY HAS AN ENDOWMENT OF $1.8 BILLION?

The spending available from the endowment contributes a relatively small part (less than 6%) of the total funding requirements for the University. Also, much of the endowment has been restricted by donors who made a contribution for particular uses. A gift to the endowment is one of the most profound ways to support the institution because endowed funds have a perpetual impact and ensure that the University will excel and remain strong.

COULDN’T SOME PART OF THE ENDOWMENT BE USED FOR PRESSING NEEDS OR OPPORTUNITIES?

An endowment fund must maintain equity across generations. Its value cannot, by law, be disproportionately expended on current needs. In order to assure generational equity is managed properly, Rochester’s Board of Trustees establishes and oversees an endowment spending formula that clearly defines how endowment distributions are made.

WHO INVESTS ROCHESTER’S ENDOWMENT?

Rochester’s endowment is managed by external investment advisors overseen by the Investment Office and the Board Investment Committee.

HOW HAVE ROCHESTER’S ENDOWMENT INVESTMENTS PERFORMED?

Performance is strong relative to relevant benchmarks, peer endowment, and on an absolute basis as shown on the website.