Endowments - And What They Can Mean For Your Student

There is a lot of talk about endowment funds and what they mean for schools and, more importantly, your student.

Endowments are gifts of cash, property or basically any asset that is donated to a school or university. It is not uncommon to have several hundred million dollars in a school's endowment fund. What happens is it is invested and used for projects, updates in various areas of the school and, most important to you - scholarships.

It is rare to spend much of the endowment fund each year, with the average across the country being about 5% of the fund. So if an endowment fund has $1,000,000, they might spend $50,000 annually. The rest of the fund is kept invested to protect from recessions in the future and to re-invest so that it continues to grow.

Kansas incorporated its first public school district endowment association in Paola, Kansas, a small town of 5000 population, in 1983. Today it has approximately two million dollars in endowed principal which generates approximately $110,000 annually to distribute in scholarships to high school graduates and fund special projects in the district which can not be afforded by the tax base. (Stat quoted from Wikipedia.

It is is interesting to see which schools have the largest endowment funds. Here is a graph that will give you an idea of where your school falls in the mix of things.