Major 'Mulaa': Miami enjoys $440 million in endowment funds
A good name may be better than riches, but Miami seems to have both. The university's endowment - which includes money used for scholarships, among other things - is now $442.8 million, a 9 percent increase since 2012, in large part due to the university's recent decade-long fundraising campaign, or comprehensive campaign, which helped the university offset the decrease in state funding.
The term "endowment" refers to any monetary gifts the university receives that must be used over a period of time for a specific purpose, making them restricted funds, said Brad Bundy, senior assistant vice president and campaign director in the Office of Development. For example, a donor might hypothetically give the university $100,000 - the minimum value to establish an endowment being $25,000 - to be used as a scholarship for art students. The $100,000 would then be invested through the stock market, bonds or asset allocations to make money. The annual money accumulated is then awarded every year to qualifying art students, and the original $100,000 never diminishes.
In addition to the endowment, there are donated funds that are unrestricted. Bundy said these donations are known as expendable giving, which can be used at any time in any way the university sees fit.
From 2002 through the end of 2013, Miami raised $535.6 million through active fundraising. In addition to endowed funds, this figure also includes expendable giving. Between 600 and 700 new scholarships were added to the endowment. Seventy percent of the campaign total came from Miami alumni.
"A large number of donations actually come from parents while they have a child enrolled at Miami," Bundy said.
Once the endowment money is solicited and received by the Office of Development, management of the funds goes to Finance and Business Services where a team decides how each fund is invested.
A large number of students are able to attend Miami through endowment-based scholarships. Buildings are built in large part due to endowment funds and even some professors have their positions here specifically because of an endowment fund, Bundy reported.
"If there's anything students should know [about the endowment], it's that private support is very important," Bundy said.
Of the money raised in the last comprehensive campaign, Bundy reported $132 million was given for scholarships, $108 million for capital - physical entities such as the new Armstrong Student Center or Farmer School of Business buildings - $31 million to sponsor faculty, $10 million for Information Technology (IT), $16 million for research and $119 million for academic programs.
Now that the campaign is over, Bundy said the university is back to focusing on annual fundraising goals. The goals are based on each fiscal year, and by June 30 this year the university hopes to have around $35 million raised.
The yearly goals are much higher than in the past because of the recent decrease in financial support from the state to all public universities. Bundy stressed it is important for alumni to realize how much the university must now rely on private gifts, and that recent alumni support is the reason the university was able to raise so much. He said students, in turn, must realize how much donations to the university impact their lives at Miami.
"The university puts on activities and programs in effort to educate [students] on the importance of private donations at Miami," Bundy said.
In order to educate the student population on the matter, an annual "Day without Donors" event takes place on campus to raise student awareness about the endowment. This year's "Day without Donors" was in February.
Sophomore biochemistry and pre-medical studies major Nathan Burns has three endowed scholarships. While he would have attended Miami without the extra support, Burns noted that the money was helpful.
"It was a nice little incentive," Burns said. "I also think it's a good idea that we have to write thank-you letters. You should tell [the donors] that you appreciate their help."
Bundy urged students to consider donating to Miami after graduation, to ensure the university's success into the future.
"President Hodge has said, 'Miamians must own the future of their university,'" Bundy said. "We hope to encourage current Miami students to understand the impact of donations and make donations when they are alumni."
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