An endowment is one of the most powerful ways to support The City College of New York (CCNY). An endowed fund can be created for CCNY through a gift that is invested and managed by the Foundation for City College (FCC).
Annual income generated by an endowment provides a continuous, reliable resource stream for the future. Endowed funds guarantee that CCNY will be able to provide support for its mission, particularly as federal and state support for higher education falls. They give CCNY administrators the ability to make and pursue long-range, strategic plans in the areas of:
- Scholarships and graduate fellowships
- Faculty chairs, professorships and research fellowships
- Research programs, centers, and institutes
- Colleges, school, and academic departments
Because these gifts guarantee enduring support, an endowment opportunity may allow the donor to name the faculty position, scholarship, or program they create for themselves or in honor of a special person.
The FCC Endowment Fund donors are able to watch their gifts inspire and encourage, creating excellence today with the assurance that their investments will fortify CCNY and its posterity, touching countless lives for generations to come.
Three Types of Endowment Funds
Endowment funds come in three different shapes and sizes:
- Restricted endowments: The most common type of endowment, a restricted endowment has a principal that is held in perpetuity, while the fund’s investment earnings are spent per the donor’s intention.
- Term endowments: The principal of the endowment can be granted, but only after a certain period of time or a certain event.
- Quasi-endowment: Also known as “board designated endowments”, quasi-endowment funds are funded by the nonprofit organization itself, and their principals may be used or granted at the discretion of the board.
Endowment Frequently Asked Questions
What is an endowment?
An endowment is a permanent gift that is invested for the long term to provide sustainable financial support for the college. The gifted funds yield investment returns based on market conditions and provide an annual payout, which is determined by the FCC Board, to support the donor’s designated use.
How an endowment works
- An endowment is a gift of assets that is strategically converted by the FCC Endowment Fund into long-term investments to provide sustainable, long-term financial support.
- Each year a portion of the market value from the endowment is transferred into a spending account, making it available to the college beneficiary that is designated.
- Only the earned returns of the endowment are spent; the principal remains intact, yielding benefits to the FCC in perpetuity.
- Endowment donors receive personalized reports on their investments each year, describing the financial performance of their gift, how their endowment enhances the foundation’s investments and how their gift continues to make a difference at CCNY.
Why does a public college need an endowment?
An endowment is essential to the financial stability of any college, public or private, large or small. Funding from the state may be counted on for base budget allocations, but it doesn’t allow for programs that go beyond the basic, propelling a college from good to great by supporting programs worthy of national and international attention and state funding has been decreasing over recent years.
An endowment allows CCNY to:
- offer more scholarships for deserving students,
- attract and retain distinguished faculty and researchers, and
- carry on research that advances learning, solves problems, and improves our world.
Who decides how my endowment gift is used?
The endowment donor can designate a CCNY school, college, institute, scholarship or program to benefit from their generosity. That beneficiary will spend the annual payout in a manner consistent with your intent when you establish your gift.
Is there a minimum gift size required to create an endowment?
There is flexibility in how to establish an endowment: with an outright gift, a pledge or an advised bequest. But depending on the purpose of the endowment, CCNY has established guidelines for minimum gift amounts that will ensure the annual investment payout is sufficient to support the intended programs. A general endowment can be established with a minimum gift of $25,000. Scholarships, fellowships, faculty professorships and chairs, and other program-specific endowments have higher minimum gift requirements.
Once established, can a donor continue to contribute to their endowment?
Yes. The donor or others may continue to support an endowment through additional contributions.
What documents are required to create an endowment?
An endowment is established through a formal gift agreement executed between the donor and the FCC. This agreement documents the donor’s spirit and intent in establishing the fund, the purpose of the endowment, administrative instructions, and specific criteria or other instructions to the CCNY beneficiary. If the donor is funding the endowment with an estate gift, the donor may also sign a statement of testamentary provision.
How long before my endowment gift begins generating payout?
The endowment account will be managed by The Foundation for City College and will require one full year before being awarded to allow for the accumulation of earnings. Based on current guidelines, the Foundation has set a 4% annual spending policy for all endowments.
Is there a cost for managing my endowment gift?
College and University foundations across the U.S. apportion a small percentage of an endowment gift as a fee for managing the gift and the endowment. Currently, FCC has an annual administrative fee of 1.5 percent.
Last Updated: 09/26/2023 12:38