An example of how an endowed scholarship works:
COMMITMENT FROM SUPPORTER*
RATE OF RETURN (hypothetical)
Amount made available for scholarship**
Amount reinvested into principal
UMFIA's investment goal is to achieve an annualized return of 5% in excess of inflation. The return is intended to cover the spending rate as well as the administrative fee (currently 1%) to ensure permanent endowment value.
* A minimum gift of $500,000 is required to establish an athletic endowed scholarship.
** A portion of each endowed fund's value, currently 4.5% of the fund's average market value over the previous 20 quarters, is made available each year to support the fund's designated program.