How are endowment funds invested?
The endowment is invested in a range of equities and income-producing investments that are recommended by several investment managers. The guiding investment philosophy is one of prudence, with an eye to reasonable growth.
How much does any endowment pay out to achieve its purposes?
Institutional policy is to annually determine a takeout rate” that falls in a range of 4%-5%, although it is a long-term goal of the Trustees to lower the maximum takeout rate to 4%. The purpose of this is to provide that the endowment can grow from its appreciation, yet still provide the essential operating funds that the college needs each year. A good way to make a quick calculation as to the size endowment needed to achieve a particular goal is to multiply the annual need by 20. For example, if you want to provide a scholarship of $2,500 each year, it would roughly require an endowment of $50,000.
Does an endowed fund have to be set up with a single large payment?
Certainly not, but funds are not disbursed from an endowment until it reaches the prescribed size. For example, a $50,000 endowment could be set up with a pledge of $10,000 a year for five years, but awards to students would not begin until the endowment is complete.
How much does the College depend on its endowment?
Roughly 40% of each year’s operating budget is provided by the endowment. It would be desirable to achieve an endowment sufficient to support 50-60% of the budget, thereby reducing our reliance on tuition revenue and fundraising.
Could I establish a scholarship for a family member or friend?
IRS regulations would prevent you from claiming a charitable tax deduction if you set up a fund to target a specific person. However, many scholarships are established to give preference to various particular types of students—by major, geographical location, personal background, or even extra-curricular interests. It is important to not be excessively narrow in such preferences, for the college might have difficulty in awarding funds if students meeting the qualifications are not enrolled.
What if my company is interested in sponsoring a Clinic project?
Clinic projects are arranged through a Clinic Director in one of the academic departments involved in this program (Computer Science, Engineering, Mathematics, or Physics). These can be facilitated through the Office of Corporate Relations.
What does it require to get one’s name on a building?
In general, donors are recognized by a named building when they supply at least 50% of the funding required for the building. Other elements (wings, rooms, specific areas) are generally recognized for lesser amounts.
What is the difference between giving to the Annual Fund as opposed to giving a gift to Capital or the Endowment?
Perhaps the most complicated and often asked questions. Gifts made towards the Endowment are invested for growth. Gifts towards capital needs go to the fulfillment of a particular project, like the recent funding of the campus dining hall. Neither relieve the annual budget. Those gifts made to the Annual Fund help fulfill the difference between how much the college reaps from the endowment towards the current fiscal year’s budget, and how much it needs. It is a very important aspect of HMC’s need since endowment payout covers just 60 percent of the annual budget each year
Can I support a special activity like ASHMC or CMS?
Absolutely! This is an excellent way to support the Annual Dollars needed each year for special programming. Simply indicate this on your reply envelope, or in the Other” section on the online giving form.
Can I choose how I would like to receive my annual appeal (i.e. via email, letter or phone)?
Yes. Simply send an email to: firstname.lastname@example.org, and special requests like once-a-year solicitations, solicitations by email, temporary holds on solicitations, or even to discontinue receiving your annual appeals will be handled.
How do I make a pledge?
To make a pledge, please contact the Office of Annual Giving at email@example.com or 909.621.8560.