Emory’s endowment grows, continues to provide crucial support to university community

Feb. 15, 2022

Media Contact

Laura Diamond

Emory University’s endowment, which includes funds held on behalf of others, returned 46.8% during the one-year peer reporting period that ended June 30, 2021. The endowment’s total value as of that date was $11 billion. These funds allow Emory to recruit, retain and support the best students, faculty and staff; and ensure the long-term sustainability of the university’s teaching, research and health care missions.

Below Srinivas Pulavarti, chief investment officer for Emory Investment Management, and Belva White, Emory’s vice president of finance and treasury, answer some questions about Emory’s endowment.

Q: What is an endowment?

A: Emory’s total endowment consists of over 2,000 separate endowments representing donations from individuals, foundations and corporations. Most were given to the university for a specific purpose defined by the donor. Other donations may be unrestricted in use so that the university has some discretion as to how the funds are allocated. Each endowment represents Emory’s contractual agreement with the donor which remains in effect in perpetuity.

Q: Can Emory use the endowment funds to offset gaps in the budget or for expenses that are typically covered by tuition?

A: No, unless a donor has instructed for their endowed gift to be used for this purpose or has made their endowment unrestricted in purpose. Most of the endowment funds are restricted, meaning they are dedicated for a specific mission-related purpose, such as scholarships, endowed positions or professional development. The donor of the funds and the university sign a contract outlining how Emory will use the gift, and Emory cannot allocate this money for use outside of the contract terms. Emory does, however, allocate unrestricted endowments to support students through academic program support, financial aid and a variety of other ways.

Q: How does Emory use its endowment?

A: Every year the endowment distributes funds to the university to support Emory’s top initiatives including student scholarships, need-based financial aid, professorships, research programs and new academic or research facilities. For example, the endowment supports the Emory Advantage program, which will be expanded this fall to replace need-based loans with grants and scholarships in financial aid packages for our undergraduate students.

Q: What is the endowment’s annual spending and how is that determined?

A: The endowment distributes a share of the market value annually to the university. The endowment distributed more than $342 million during the year ended June 30, 2021, for purposes such as providing scholarships for low-income students; supporting cutting-edge research to benefit society; funding endowed faculty positions and academic programs; and sustaining the operation and maintenance of Emory’s campus buildings. Earnings on the endowment funds are distributed based on Emory’s spending policy and must be used for the purposes designated by the relevant endowment.

To honor our promises to donors and to comply with Georgia law outlined under the Uniform Prudent Management and Institutional Funds Act (UPMIFA), Emory’s spending policy is designed to produce spending levels from endowment income that grow in a smooth and predictable manner. Emory uses a moving average spending formula based on the prior year’s ending market value. The percentage of spending per unit change from the prior year will have a ceiling and floor threshold of 10%.

The objectives of the endowment spending policy are to:

Provide current programs with a predictable and relatively stable stream of revenue through the annual endowment spending distribution;
Ensure that the real value (purchasing power) of this revenue stream does not decline over the long term;
Ensure that the real value of the endowment assets does not decline over the long term.

These distributions are used to support institutional priorities in a responsible way to provide ongoing financial stability.

Q: How is Emory’s endowment managed?

A: Emory Investment Management (EIM) oversees the investment of endowment funds. Their work focuses on long-term growth for the funds to support Emory’s current and future spending needs. EIM’s investment strategies aim to produce superior long-term investment results by maintaining a portfolio of top-tier global investment managers.

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