Indiana University’s Endowment

The Indiana University endowment: the lifeblood of IU

“The endowment” is a collective term used to encompass thousands of endowed accounts created by donors to provide long-term, sustainable support for IU’s mission of teaching and research.

As dedicated stewards of the endowment, the IU Foundation is responsible for maintaining and growing the funds that donors have entrusted to us. Our charge is to ensure that the endowment will be here for the benefit of IU students, faculty, research, and programs—now and forever.

How the endowment works

To understand how a university endowment is utilized and managed, it’s important to first know: Where do endowment funds come from?

  1. A donor (or group of donors) wants to make a long-lasting gift to something at Indiana University that they really care about. So they create an endowed account—a permanent source of funding that can grow over time and support the donor’s chosen program or purpose for future generations.
  2. The donor works with the IU Foundation to create a legally binding donor agreement, which spells out exactly how funds from that endowed account can be dispersed, now and into the future.
  3. The IU Foundation pools all the individual endowed accounts into one portfolio. These funds are prudently invested with the long-term objective of maintaining purchasing power over time. Each account, while invested in the comingled portfolio, is its own line item and has its own cash flow that remains with that account.
  4. The IU Foundation pays out 4.5% each year, making these funds available to the university beneficiary selected by the donor.
  5. The principal of the original gift remains intact, generating benefits for the donor’s chosen cause for generations to come.