Frequently Asked Questions About the Endowment

The endowment provides funding to support the academic mission of Kalamazoo College for current and future students and lends fiscal stability to the institution. Income from the endowment supplements tuition revenue and other philanthropy to fund mission-based priorities supporting students, faculty and day-to-day operational needs.

Q: What is an endowment?

K’s endowment refers to assets, primarily comprised of philanthropic gifts, invested for the longterm. When you create an endowed fund, you “buy into” shares of the endowment pool. Values of the shares fluctuate depending on a 12-quarter rolling average of investment returns. In accordance with policies set forth by the Board of Trustees, an annual distribution typically around 5% is available toward the fund’s designated purposes.

Q: What is the minimum gift level to establish an endowed fund?

Gifts of any size can be made toward existing endowed funds including several pooled funds for strategic priorities, general scholarship or unrestricted endowment. Minimums for named funds vary depending on the area of support. Please contact us to learn more.

Q: What is a pooled fund?

During The Campaign for Kalamazoo College, several funds were created to assist donors in “pooling” their gifts to support areas of strategic importance such as scholarships, study abroad and faculty competitiveness. These funds, made up of many gifts at various sizes by many donors, make a large impact supporting K’s mission-driven priorities.

Q: Can I endow a fund over a period of time?

Yes. Endowment gifts can be made through a multi-year commitment.

Q: Can I endow a fund through an estate gift?

Yes. Endowment gifts can be planned for through your estate. You can also create an endowed fund today with an immediate gift and add to the fund through your estate.

Q: When are funds available for use by departments or awarded for scholarship?

Funds are awarded in accordance with distribution policies set forth by the Board of Trustees. Generally, an annual distribution can be made in the succeeding fiscal year.

Q: Do I have any input in the awarding of my endowed fund?

Donors are able to create a set of preferences to be used in the awarding of their named endowed fund. In order to comply with gift policies and IRS regulations, donors may not specify or select a specific individual student or recipient.

Q: What kind of information will I receive about the use of my endowed fund?

Each year, the individual on file for the endowed fund will receive a report that reflects the most recent historical gift value, a three-year history of the market value, and current spending distribution values for their fund.

Q: Can I meet the students who benefit from my fund?

Yes, in many cases. The Office of Donor Relations will work with a donor at their request to schedule a visit with their award recipient during the academic year in Kalamazoo.

Q: Can others make gifts to my endowed fund?

Yes, it is standard to include language in the fund agreement that allows others to give to a fund.

Q: Whose name is on the endowment?

An endowment can be named for yourself, your family, a friend or favorite professor, your company – there are many options available.

Q: What is a fund agreement?

A fund agreement is a formal document signed by the donor(s) and the College that defines the purpose and guidelines of the fund. It also outlines the College’s responsibilities for managing the fund. Fund agreements are required for any new endowed fund.

Q: What is a book (historic) value?

The book (historic) value represents the current balance of the principal account – the amount received in gifts to the fund.

Q: What is a market value?

The market value is the net value of the book value plus or minus any unrealized gains or losses. This is the figure used to calculate the annual draw.

Q: What is the Endowment Spending Rule?

The spending rule is a formula used to determine the endowment payout each year. It is calculated in accordance with the policies set forth by the Board of Trustees.

Learn more by exploring K’s naming levels or viewing endowment performance data.