How does the Foundation invest funds?
The Investments Committee — a group of trustees, many of whom have well-established careers in the investment industry — oversees the investment of the Foundation's endowed assets with the help of a professional, experienced staff, which provides day-to-day monitoring and reporting of the endowed assets.
The establishment of asset allocation targets and the development of a "policy portfolio" are at the heart of the investment process. Though disciplined in its creation, such a portfolio has built-in flexibility to match the dynamic nature of today's financial markets. In addition to reviewing the portfolio annually, the Investments Committee may also make adjustments during the year depending on market conditions. Once the policy portfolio is established, the Investments Committee, in consultation with the Foundation's staff, selects various investment managers and allocates funds according to policy.
Why does William & Mary need private funds? Isn't the university a state school?
Yes, William & Mary is a state school, but receives less than 14 percent of its operating budget from the Commonwealth of Virginia. Private funds are critical to maintaining the present and future excellence of the university.
Does the Foundation receive and invest all of the funds for William & Mary?
The Foundation oversees just over three quarters of the university's endowed assets. The Board of Visitors, the William & Mary School of Business Foundation, the Marshall-Wythe School of Law Foundation, and the VIMS Foundation (Virginia Institute of Marine Science) hold the bulk of the remaining assets.
What is the William & Mary Investment Trust (WAMIT)?
WAMIT was created by the William & Mary Foundation in 2004 so that most of the university's endowed assets could be administered under one structure--thereby reducing the burden of administering endowed assets and increasing the efficiency gained by pooling assets. To date, the Law School, Business School, and VIMS Foundation are all members of WAMIT along with the William & Mary Foundation.
How can I set up a scholarship?
A scholarship for student financial aid, athletics, or study abroad can be established with a minimum $100,000 endowment. A scholarship can be named in honor of a family member, a beloved professor, or other individual or group. For more information, contact the Office of University Advancement.
How does the Foundation determine how much of its annual income is spent on university priorities?
The Foundation typically expects that investment returns will not only preserve but enhance the real value of the endowment after funds are released for use, the object being to achieve a real growth of 2 percent in the long term. (Real growth is the return after subtracting annual spending and accounting for inflation.) In so doing, the Foundation preserves the purchasing power of endowment assets for future generations.
In consultation with the Foundation's chair, the Investments Committee reviews the spending policy annually and recommends a "spending rate" to the Executive Committee. The spending rate typically ranges from 3.75 to 4.75 percent of the average market value of the fund over the 20 preceding quarters.
How does the Foundation determine the uses of its available funds?
Donors often make commitments to the Foundation in the form of endowments that are either unrestricted or restricted to particular priorities — such as scholarships, professorships or programs; donors may also give expendable funds to the Foundation. Distributions from the investment portfolio support a donor's restrictions as to use, or, in the case of unrestricted support, the university's most pressing needs.
What is the difference between endowed and expendable funds?
Gifts to endowment are invested in perpetuity; Board-approved payout from the investment is distributed on an annual basis to support the funds' objectives. Alternatively, expendable funds, whether restricted or unrestricted, can be fully spent in support of a donor's intended use.
How soon after it is established does an endowment begin to benefit students and faculty?
Gifts to endowments will begin to generate a cash flow for the designated purpose in the second academic year following the calendar year in which the funds are invested. For example, gifts received and deposited during calendar 2015 will generate a budget in the academic year beginning July 1, 2017.
How do changes in the economy affect the Foundation's investment decisions?
The perpetual nature of the endowment allows the Foundation to take a long-term perspective in developing its investment policy, which in turn enables implementation of its investment strategy without being significantly influenced by the day-to-day fluctuations of the financial markets.
[[cgletourneau, Request a copy of the Foundation’s most recent 990 Tax Form]]