Spending Policy & Gift Fees

The distribution from the investment of the endowment to the university varies each year, based on both endowment value and the adopted spending policy for that year. The payouts distributed for use for the current and previous four academic years are as shown at right.

Individual endowment funds must meet a minimum value, established at the time the fund is created, before earnings can be disbursed to support donor-designated purposes. For most funds, that minimum is currently set at $50,000 but may differ based on the use and purpose of the fund.

Note: The first award for endowed scholarships is available the first occurring fall semester 12 months from the date of fulfilling the minimum fund value.

Spending policy

The current endowment spending rate that will be applied to the fiscal year 2018 for use in the 2017-2018 academic year is 4.79%, which contains both the university distribution and the Foundation’s management fee.  For the fiscal year 2018, the payout to the university equals 3.3% of the market value of the endowment on December 31, 2016. The management fee is 1.49%. The dollar value of the payout to the University to support donor purpose this year will increase to $3.8 million.

Calculating payouts for individual funds

The mechanics of endowment investments at URI are similar to those of mutual funds. Calculations of endowment values are based on units purchased. Each individual, named endowment owns units in the GEF, which are revalued at the end of each quarter. As each quarter ends, using that quarter’s end market value, a unit price is calculated and new endowments enter the pool. New endowments “buy-in” and receive a number of units in the pool, based on the gift value and the unit value on the buy-in date. As the value of a unit in the pool grows or declines, new endowments purchase a fewer or greater number of units. Using the spending rate approved by the URI Foundation Executive Board, a distribution amount per unit share is paid out to each fund at the date of distribution. This payout is transferred to a spendable account annually, providing the fund has achieved its minimum funding level.