Commonly Asked Questions
What is the amount of St. Olaf College's endowment?
As of May 31, 2012, the market value of the St. Olaf Endowment Funds (excluding Deferred Gifts) reached $327.2 million.
How is St. Olaf College's endowment managed?
Endowment funds are managed primarily by outside fund managers retained by the College. The College uses an asset allocation model, which generally allocates 41% of the endowment to equity investments, 19% to fixed income investments, with the remaining 40% allocated to alternative assets: hedge funds, real assets and private equity.
What percentage of endowment earnings are spent?
The college uses a "smoothing policy" to allocate funds from the endowment to the endowed scholarship and endowed fund spending accounts. As a result of this policy, scholarship amounts in the 2012-2013 school year will be slightly lower than the amounts available in 2011-2012 as the "up market" in 2007 rolls off the calculation. The effective spending or pay out rates will be about 4.7% in 2012-2013.
May a donor restrict his or her gift?
The endowment is divided into two parts: unrestricted (for general use) and restricted (for specific purposes). An endowment gift may be unrestricted or restricted, according to the wishes of the donor.
Unrestricted gifts are used for the highest priorities on campus and provide flexibility as needs change over time. Restricted endowment gifts combine the donor's interests with certain college objectives. The St. Olaf Advancement Office works with each donor to ensure that he or she creates a distinctive endowment gift that reflects common goals.
Within the two parts of the endowment is a collection of individual endowed funds – many of them scholarships – either unrestricted or with varying degrees of restriction. Some donors direct their gifts to an existing fund within the endowment that matches their interests. Others choose to create a separate, named fund within the college's endowment.
How is an endowment gift made?
Planning an endowment gift is a personal process. Some donors make outright gifts of cash or appreciated securities toward the college's general endowment, in addition to their annual support through the St. Olaf Fund. Others may choose to create a separate, named endowed fund. These donors work with St. Olaf Advancement staff to establish their endowment and craft written guidelines to govern its use in perpetuity.
Some donors decide to establish an endowment through their will or trust provisions, or through some other planned gift arrangement. Because these gifts will take effect some time in the future, St. Olaf encourages each donor to contact the Advancement Office for specific wording regarding future endowment funding.
What is necessary to establish and name an endowed fund?
A named endowment fund can bear the name of the donor or the name of someone he or she chooses to honor or memorialize. The fund can be designated for a particular program, department, or activity on campus. Because an endowment exists in perpetuity, a named endowed fund is an enduring legacy, forever linking the name of the donor to the achievements he or she has made possible.
An endowed fund may be named for the donor(s), a person, or may be given a special name agreed upon by the donor and the College. Named chairs, professorships, and fellowships must be approved by the Board of Regents, upon recommendation by the President.
How much does it cost to endow a scholarship?
To establish an endowed scholarship either outright or through your will, you would transfer assets to the college with the understanding that these funds would be permanently invested and the income used to provide an annual scholarship for the selected recipients.
Each proposal to establish a scholarship must be approved by the Vice President for Advancement and the Director of Financial Aid. Proposals may specify the conditions of the award, specific kinds of student(s) and/or areas of study, but must be general enough in their terms to ensure that aid will be awarded annually. The minimum amount to endow a scholarship is $50,000. Special arrangements can be made to build the endowed scholarship over a period of up to five years, and to begin awarding it once that minimum level is met. Prior to that, all appreciation and income will be added back to the principal sum.
What happens to incomplete scholarship funds?
After communication with the donors, those funds that do not reach the minimum $50,000 level within a period of five years will be transferred to the general scholarship fund at St. Olaf College.
Once established, can I continue to give to my fund?
Yes, contributions designated to a specific endowed fund may be made in several ways: annual gifts of cash and appreciated securities, bequests through will or trust, remainder interests from life income plans, or proceeds from retirement plan assets and life insurance policies. I'd like to make an endowed gift, but prefer not to name a fund.
Are there existing endowed funds to which I can contribute?
Yes. Many of the college’s existing endowed funds and scholarships accept additional contributions. The Stewardship Office will be happy to assist you in selecting a fund that most closely matches your preferred designation.