What is the endowment?

A university's endowment is its "trust fund," it is the nest egg for the future. The endowment is the income-generating body of investments that is maintained in perpetuity and underwrites the institution's operations.

The endowment is typically divided into two parts. One part is restricted for specific purposes and the other part is unrestricted for general university use. Donors may request that their gifts be designated to either or both of these endowment entities. By making these gifts, donors have an enduring visible imprint on the future of Boston University. Unlike the lifespan of an individual, a university spans countless generations and hundreds of years, and provisions for students, faculty, and facilities are a part of the planning process.

• The restricted portion of Boston University's endowment is referred to as the pooled endowment. Donors to the "pool," designate their gifts for specific purposes such as scholarships, lectureships, professorships or special programs. The pooled endowment is made up of individual funds, each of which is assigned unit shares within the pool. The unit shares determine the annual market value and the annual disbursement. A pooled endowment fund operates very much like a mutual fund but has the advantage of an almost limitless timeframe.
• Gifts to the unrestricted endowment are used for general purposes of the university and are typically given by donors who prefer to have the university determine the highest and best use for their gifts. These gifts provide the most flexibility and can be used to meet immediate or future needs.

The investment committee of the Board of Trustees manages the endowment. Investments are conservative and diversified and include domestic and international equities as well as fixed-income investments. The managers balance the need for immediate revenue with the necessity of preserving assets for the future.