One of our alumni called to ask about endowing a scholarship with the Alumni Fund. I was very excited to hear about his interest. He asked me a number of questions about our endowments, the returns, and how they worked. This information may be of interest to more than just him.
The Alumni Association for the College of Medicine at SUNY Downstate has three separate endowments. Two of these endowments were established by the Engel Family upon their passing (more on that in a future newsletter). Those two endowments are managed by the Bank of New York Melon’s investment group per the terms of the trust that established them. Because of that, BNY Melon also manages the main endowment for the Alumni Association.
The Engel Alumni Association Endowment provides operating support for the Alumni Association. As of our last report in January, this endowment has $1,240,132 and provides approximately $62,000 dollars to support the Alumni Association.
The Engel Scholarship Fund Endowment provides scholarships for medical students with identified financial need. As of our last report in January, this endowment has $4,493,885 and should provide $224,694 in scholarship dollars at the end of 2017.
The Alumni Fund Endowment is the main endowment for the Alumni Association. This endowment holds each of the smaller endowed funds set up by our alumni and friends to support scholarships, the Brooklyn Free Clinic, Global Health, Student Research, and Student programs. As of our January report, this fund has $9,895,450 and should provide $494,773 to support Alumni Fund programs at the end of 2017.
In our endowments, the money donated is invested in the stock market. In order to preserve the principal, or original amount, we invest very conservatively which has worked well for us. Ideally, none of the original donated money is spent. The organization should only be spending the returns on the investments each year. The goal of the Alumni Fund is to only spend 5% of the annual returns. Any money earned in investments beyond that is reinvested. The bank that does our investing also takes a small amount in fees each quarter to cover their costs. We have negotiated very low fees. Our main endowment has a fee of 30 basis points and the Engel Trusts (which we do not control) have a fee of 40 basis points. The average is 32 basis points between the two. The fees go down as our endowment grows.
If you are interested in learning more about endowments or setting up your own endowed fund, please contact us at 718-270-2075 or firstname.lastname@example.org
If you have a question that you would like answered, please reach out to us. Email us at email@example.com.