Endowments

Endowments are long-term investments in the university, held in perpetuity, that will provide scholarships, support funds and other benefits to students and faculty year after year.

Some donors create unrestricted endowments that are used for the highest priority needs on campus and provide flexibility as these needs change. Others choose to direct their gifts — to endow a chair or professorship in the academic discipline that inspired them, to create scholarships or fellowships for deserving students, or to support medical research of particular importance to them.

An endowed gift also offers donors the opportunity to have their names, or the name of a loved one, linked to an area of the university in which they have a special interest. Contributions to endowments can be made over a period of five years and are tax-deductible.


 

What can you create?

  • Endowed Program Support Fund – $25,000
    An endowed program support fund may be used to provide for prizes or awards, to support seminars or other educational activities, to purchase equipment or much needed supplies for the program, or other expenses as the endowment agreement permits.

    Endowed Scholarship - $25,000
    The financial hurdles facing many young students today are every bit as imposing as the academic ones. An endowed scholarship provides students help with tuition, fees, books, supplies and other living expenses as the endowment agreement permits.

    Endowed Student Loan Fund - $50,000
    Loans provide assistance to students as they struggle to complete their degrees. An endowed loan fund receives annual income from its investments and also receives interest from student repayments once they have graduated and joined the workforce.

    Endowed Lectureship - $75,000
    An endowed lectureship is used to bring a distinguished scholar to the university each year to lecture on a particular subject or in a specific discipline.

  • Endowed Research Fund – $100,000
    Endowed research funds provide income to support research in the discipline, disease or area of interest stipulated in the agreement with the donor.

    Endowed Faculty Scholar – $100,000
    This type of endowment supports the research, scholarly, and/or clinical efforts of a distinguished faculty member within a unit of the donor’s choice.

    Endowed Graduate Fellowship – $200,000
    An endowed fellowship provides support to graduate students as they strive to fulfill the academic requirements in their field of expertise.

    Endowed Visiting Professorship – $250,000
    This type of endowment brings a visiting professor to UAB. This distinguished lecturer comes to UAB with skills and knowledge from another arena to share with peers on this campus.

  • Endowed Professorship – $500,000
    This type of endowment provides income that may be used for a portion of the salary and fringe benefits of the holder, who may also use the honorary title associated with the professorship.

    Endowed Chair – $1,500,000
    This type of endowment is among the most prestigious and meaningful gifts that can be made to, or accepted by, an academic institution. An endowed chair may provide full salary or a salary supplement and fringe benefits for the recipient and support staff or other expenses as the endowment agreement permits. The holder may also use the honorary title associated with the chair.

    Endowed Deanship – $2,500,000
    Because deans are the visionary leaders responsible for enriching the programs they oversee, an endowed deanship provides discretionary funds to ensure the dean achieves priority initiatives and assists UAB with recruiting the best and brightest to lead our institution.

 

How do Endowed Scholarships Work?

1. Gift

A College of Arts and Sciences alumna makes a $25,000 gift (the minimum amount required for an endowed scholarship) to the Department of Biology to establish a named endowed scholarship in memory of her father.

2. Agreement

A gift agreement is drafted between UAB and the donor, guaranteeing that her gift will be added to the University’s Pooled Endowment Fund (PEF) and used solely for its stated purpose.

3. Buy

The donor’s named scholarship fund buys units in the PEF, much as one buys shares in a mutual fund.

4. Invest

The Board of Trustees’ Investment Committee prudently invests the donor’s gift across major asset classes in the portfolio to maximize long-term total return, within acceptable levels of risk.

5. Return

A predetermined portion of the annual return (currently calculated as 4.5% of the moving-market unit value during the previous five fiscal years) is used to provide a financial award. The fund’s principal remains intact.

6. Growth

The remainder of the annual return is held with the named fund’s principal as a hedge against inflation and to generate growth and for protection during years with less than favorable or negative returns.

7. Perpetuity

The named fund continues to grow in perpetuity, ensuring future scholarship support.


 

 

How do Faculty Endowments Work?

1. Gift

A generous donor makes a gift of $500,000 to establish an endowed position to the Department of Biology.

2. Agreement

A gift agreement is drafted between UAB and the donor, guaranteeing that her gift will be added to the University’s Pooled Endowment Fund (PEF) and used solely for its stated purpose. The Board of Trustees formally accepts the gift to establish the endowment.

3. Buy

The donor's named endowed fund buys units in the PEF, much as one buys shares in a mutual fund.

4. Holder Appointment

A UAB faculty member -- a new recruit or someone already at UAB -- is appointed as the holder of the endowmen, with approval by the Board of Trustees.

5. Return

A predetermined portion of the annual return (currently calculated as 4.5% of the moving-market unit value during the previous three fiscal years) is used to support the holder's academic or research activities. The endowment's principal remains intact.

6. Growth

The remainder of the annual return is held with the named fund’s principal as a hedge against inflation, to generate growth and for protection during years with less than favorable or negative returns.

7. Perpetuity

The endowment remains with UAB in perpetuity, providing resources to future holders.


For a list of current endowed faculty positions, click here

 

 

How are Endowments Managed?

Asset Allocation
Rates of Return
Expenditure Guidelines


 

Making Investments at UAB

All endowments are typically invested in the University of Alabama Pooled Endowment Fund unless there are donor restrictions to the contrary.


The Investment Committee of the University of Alabama Board of Trustees is responsible for recommending investment objectives and policies to the board and for implementing such policies. It oversees investment activities, monitors investment performance, and ensures the prudent control of the investment of funds for the university. The investment committee selects several professional money managers and monitors their performance on a quarterly basis. Funds are managed in a conservative manner in order to preserve and augment the value of the endowment. Maintaining the value of the endowment will help sustain the university's ability to generate operating budget support for both current and future generations of students.


As part of a commitment to long-range financial equilibrium, the board adopts the broad objective of investing endowment assets so as to preserve their real value and enhance the purchasing power of the endowment so as to keep pace with inflation and evolving university needs. The board seeks superior investment returns through professional management and avoidance of unnecessary risk.
More information on the Investment Management Policy can be found on page 105 of the Board Manual.


For questions about endowments and other giving options, email Daphne B. Powell, senior director of Stewardship and Donor Relations, at This email address is being protected from spambots. You need JavaScript enabled to view it. or call 205-934-1807.

 

Donor Bill of Rights

The University of Alabama at Birmingham adheres to the Donor Bill of Rights. The Donor Bill of Rights was created by the American Association of Fund Raising Counsel, the American Association for Healthcare Philanthropy, the Association of Fundraising Professionals, and the Council for Advancement and Support of Education. It has been endorsed by numerous organizations.


Philanthropy is based on voluntary action for the common good. It is a tradition of giving and sharing that is primary to the quality of life. To ensure that philanthropy merits the respect and trust of the general public and that donors and prospective donors can have full confidence in the nonprofit organizations and causes they are asked to support, we declare that all donors have these rights:


I. To be informed of the organization's mission, of the way the organization intends to use donated resources, and of its capacity to use donations effectively for their intended purposes.

II. To be informed of the identity of those serving on the organization's governing board and to expect the board to exercise prudent judgment in its stewardship responsibilities.

III. To have access to the organization's most recent financial statements.

IV. To be assured their gifts will be used for the purposes for which they were given.

V. To receive appropriate acknowledgment and recognition.

VI. To be assured that information about their donation is handled with respect and with confidentiality to the extent provided by law.

VII. To expect that all relationships with individuals representing organizations of interest to the donor will be professional in nature.

VIII. To be informed whether those seeking donations are volunteers, employees of the organization, or hired solicitors.

IX. To have the opportunity for their names to be deleted from mailing lists that an organization may intend to share.

X. To feel free to ask questions when making a donation and to receive prompt, truthful, and forthright answers.


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