Scholarship Fund Activity Report

FY 2017

Scholarship fund activity report Your support matters

WHY YOU RECEIVED THIS REPORT We send these reports to donors who established permanent scholarship funds at KU Endowment. We also share them as a courtesy with other individuals identified by the primary donor(s), such as family members, friends and professional advisers. Your report is intended to provide an update on the financial status of the fund and to demonstrate the benefit of this vital support to students.

Your support helps the university to meet its highest priority, enabling all students to develop to their full potential. Scholarships help students who might otherwise go elsewhere: talented students who can’t take on significant debt and hard-working students who have no other sources of financial support. On their behalf, we thank you.

UNDERSTANDING YOUR FUND ACTIVITY REPORT THESE DEFINITIONS MAY BE HELPFUL:

Gifts contributed: Includes gifts and pledge payments made during the report period.

Spendable earnings from investments: The amount available to spend that is provided from the invested balance of the account. This amount is determined by KU Endowment’s spending policy. The intent of the policy is to provide as much as possible each year while preserving the account’s purchasing power for the future.

Expenditures: The amount spent from the fund for its designated purpose. This may be more or less than the spendable earnings reported for the period, depending on the timing of receipt of the earnings and on the current needs of the benefiting university unit. Generally, spendable earnings that are not spent in one year remain available for later use.

Contributions invested since inception: The total amount donated to the fund and invested from its inception to the present, excluding gifts received in the final month of the report period. These gifts will be reflected in next year’s report, because contributions are added to KU Endowment’s investment pool in the month following the date the gift is received.

Current value of investments: The value of the fund’s invested balance in KU Endowment’s investment pool as of the end of the report period.

TUITION COST, 1985–2017

$9,975

$10,000

$8,000

$6,000

$4,000

$2,000

$990

0 1985

1990

1995

2000

2005

2010

2017

Includes standard in-state tuition. Does not include required campus fees, school differential fees, room and board, travel, or personal expenses.

WHY YOUR SUPPORT MATTERS More than ever, private giving opens doors for students to attend KU. Consider some sobering changes over the past 30 years:

IN 1985, state appropriations covered about

50 percent of KU’s operating budget.

THIS YEAR, the state will supply less than

20 percent.

IN 1985, a student working for minimum wage could pay for tuition by working 6 hours a week. She could cover tuition plus required fees by working 7.4 hours a week.

TODAY, a student working for minimum wage to cover tuition must work

26.5 hours a week.

2017

To cover tuition plus required fees, she must work

18% 1985

29 hours a week.

50%

IN FISCAL 2017, KU Endowment provided scholarship support to more than 6,800 students, totaling almost

$28 million.

HOW WE MANAGE PERMANENTLY INVESTED FUNDS We place permanently invested funds in our Long-term Investment Program (LTIP), which operates much like a mutual fund. Asset allocations in the LTIP are diversified by class and within classes, with the intent to maximize returns and minimize volatility. Managed that way, a permanently invested scholarship fund provides a reliable source of income for both today’s students and tomorrow’s promising scholars.

IF YOU HAVE QUESTIONS: Ellen Chindamo, senior director of stewardship programs, 785-832-7374 echindamo@kuendowment.org

HOW WE SPEND FROM PERMANENTLY INVESTED FUNDS KU Endowment’s spending policy determines the amount available to be spent from each fund’s invested balance. The intent of the policy is to provide as much scholarship support as possible each year, while preserving the account’s purchasing power for the future.

We use a constant growth spending policy, under which distributions in any given year are equal to those in the prior year, plus an adjustment for inflation.

To ensure we’re not spending too much or too little in any given year, the policy is subject to a 4.5 percent “floor” and a 6.5 percent “cap” of the trailing four-quarter average market value.

SPENDING IS ALLOCATED IN PROPORTION TO THE TARGET OF 5.5 PERCENT, WITH:

4.6 percent allocated for current expenditure 0.9 percent allocated to KU Endowment as an administrative fee KU Endowment’s investment and spending guidelines are overseen by the Investment Committee, one of several standing committees of the KU Endowment Board of Trustees.

P.O. BOX 928 LAWRENCE, KS 66044-0928 P: 785-832-7400 F: 785-832-7495 www.kuendowment.org