How to Create an Endowment

How to Create an Endowment for
Student Scholarships and Fellowships,
Faculty Support and Program Support

Step 1 - Gift a minimum of $25,000 created with cash, marketable securities, and other assets. Pledges toward that minimum may be made over a period up to five years.

Step 2 - Create a Memorandum of Understanding to specify the donor's intent and standard procedures for managing endowment funds. 

Step 3 - Set up your gift with two options: Keep the principle intact and only use the interest generated, or enable flexibility to draw down on the principle in alignment with your intent. 

How an Endowment Works

The principal gift that establishes an endowment is always preserved, with only the investment income distributed annually to support the fund’s purpose. Earnings in excess of this distribution are used to build the fund’s market value.* 

*Donated funds (the principal) are invested to generate income. Earnings are distributed annually to designated accounts at a rate of 4% applied to a three-year rolling average of the endowment's fair market value. 

Matching Gift Opportunities

Texas State is eligible for the Texas Research Incentive Program (TRIP), which matches research-designated gifts of $100,000 or more, including graduate fellowships and undergraduate research scholarships.* There are also many college-, career- or program-specific matching opportunities to boost the power of your gift. Many private companies also offer matching programs.

*The minimum amount for any installment is $100,000. 

Managing Endowments

Endowments established in the Texas State University Development Foundation are invested by Cambridge Associates, an investment consulting firm, with oversight from the Development Foundation Board of Trustees. 

The Development Foundation is committed to responsibly accepting, stewarding, and maintaining the investments of private donors. The long-term objective of the Development Foundation is to earn a return sufficient to provide for current university needs while preserving the purchasing power of endowments for generations to come.