Annual income generated by an endowment provides a continuous, reliable resource stream for the future. Endowed funds guarantee that ASU will be able to provide core support for its mission, particularly as federal and state support for higher education falls. They give ASU administrators the ability to make and pursue long-range, strategic plans in the areas of:
Because these gifts guarantee enduring support, an endowment opportunity may allow you, as donor, to name the faculty position, scholarship or program you create for yourself or in honor of a special person.
ASU Foundation Endowment Fund donors are able to watch their gifts inspire and encourage, creating excellence today with the assurance that their investments will fortify the university and its posterity, touching countless lives for generations to come.
You can create an endowed fund at ASU through the gift of an asset that is invested and managed by the ASU Foundation.
Arizona State University has long been a global leader in creating a sustainable future. It’s commitment to sustainable practices is pervasive — extending to all facets of its mission. The ASU Foundation recognizes the importance of aligning the university’s investment portfolio in a manner consistent with the university’s values of sustainability and responsibility to the communities we serve.
We are pleased to share our inaugural Sustainable Responsible Impact Investing report, which illustrates how the Foundation pursues sustainable and responsible investment strategies to advance climate change progress and promote justice, equity, diversity and inclusion.
An endowment is a permanent gift that is invested for the long term to provide sustainable financial support for the university. The gifted funds yield investment returns based on global market conditions and provide an annual payout, which is determined by the investment committee, to support the donor’s designated use.
An endowment is essential to the financial stability of any university, public or private, large or small. Funding from the state may be counted on for base budget allocations, but it doesn’t allow for programs that go beyond the basic, propelling a university from good to great by supporting programs worthy of national and international attention and state funding has been decreasing over recent years.
An endowment allows ASU to:
You. As an endowment donor, you can designate an ASU school, college, institute, scholarship or program to benefit from your generosity. That beneficiary will spend the annual payout in a manner consistent with your intent when you establish your gift.
You have flexibility in how you establish your endowment: with an outright gift, a pledge or an advised bequest. But depending on the purpose of the endowment, ASU has established guidelines for minimum gift amounts that will ensure the annual investment payout is sufficient to support the intended programs. A general endowment can be established with a minimum gift of $25,000. Scholarships, fellowships, faculty professorships and chairs, and other program-specific endowments have higher minimum gift requirements.
Absolutely. You or others may continue to support your endowment through additional contributions.
In 2004, the ASU endowment was $250 million. As of 2021 it was $1.25 billion. All you need to do to realize the value of every individual gift to the endowment is look at ASU’s astonishing growth and evolution. Without endowment gifts, ASU would not be what it is today and that same permanent, sustainable support is what will create the ASU of tomorrow.
The board of directors empowers an investment committee — board members, along with representatives from the university, the Alumni Association and the financial community — to oversee the endowment. The committee works through an outsourced chief investment officer arrangement offered by BlackRock, Inc to manage the investment portfolio. The OCIO model is preferred by many institutional investors, offering shorter reaction time to market volatility, and expertise in global and complex markets. Endowment gifts such as yours are combined and invested as a single fund, increasing investment opportunities and minimizing market access fees.
Endowment returns for fiscal year 2021 were 24.89%. It’s important to remember, however, that an endowment’s growth is a long-term investment, and to consider extended performance as well. Over 15 years the endowment yielded an average annual compound investment return of 7.01%, in line with its objective of preservation and growth of intergenerational equity.
An endowment is established through a formal gift agreement executed between the donor and the ASU Foundation. This agreement documents the donor’s spirit and intent in establishing the fund, the purpose of the endowment, administrative instructions, and specific criteria or other instructions to the ASU beneficiary. If the donor is funding the endowment with an estate gift, the donor may also sign a statement of testamentary provision.
After your gift is fully funded and the paperwork is complete, your fund enters the foundation’s routine allocation cycle. A payout is calculated after the close of each calendar year and provided at the beginning of each fiscal year, July 1, to the beneficiary you chose. If your gift meets the payout threshold during the calendar year, payout begins the following July 1.
For new endowments established during a calendar year, the initial payout is approximately 3.75 percent of the gift value. After that, the foundation uses a constant-growth spending policy that increases the payout annually, consistent with the current-year inflation rate, subject to a cap and floor — 4.25 percent and 3.25 percent — of the 12-quarter average market value. Ensuring the payout is within the cap and floor provides a stable and predictable payout ASU beneficiaries can count on for budgeting and long-range planning.
University foundations across the U.S. apportion a small percentage of an endowment gift as a fee for managing the gift and the endowment. At ASU, an annual institutional advancement fee of 1.5 percent of the 12-quarter average market provides discretionary support for the university and the foundation.
The Foundation does not charge an intake fee on gifts given to the endowment, however, all gifts to ASU and its affiliates, endowment and otherwise, are subject to the ASU policy that allows 95% of a gift to be restricted to a particular purpose at ASU and the remaining 5% is unrestricted for use to advance the University. This means that 95% of an endowment gift will be placed in the endowment fund to grow and be used per the donors' restrictions.
Effective July 1, 2017, the ASU Foundation for A New American University (ASUF) named BlackRock, Inc., as its outsourced chief investment officer (OCIO).
Evolution in ASU Foundation’s Investment Committee’s strategy led it to request proposals for re-imagining its OCIO role, after which BlackRock was selected for its closely aligned strategies and values—including its offerings for passive equity management, reduced fees, new investments and a broad partnership to engage in programming and mentorship for ASU undergraduates.
The OCIO endowment and pension management structure has gained popularity among institutional investors due to its suitability for dealing with complexities in the global investment landscape.
The ASU Foundation board of directors empowers an investment committee of six-eight board members, assisted by advisers from ASU, the ASU Alumni Association and the financial community. The committee invests each gift to the endowment as part of a pooled fund comprised of a diversified, professionally managed portfolio. Combining individual endowments in a single, strong fund maximizes returns, increases investment opportunities and minimizes administration fees.
ASU Foundation’s Investment Committee hired BlackRock, Inc., as the Outsourced Chief Investment Officer for the Endowment in July 2017. Like ASU, BlackRock has been a leader for sustainability and environmentally responsible practices. BlackRock is a signatory for the United Nations Principles for Responsible Investment and recently signed on to the Climate Action 100+, demonstrating their view that asset managers and owners can help ensure the world’s corporations take necessary action on climate change. BlackRock’s CEO, Larry Fink, recently wrote to the chief executives of the world’s largest companies urging them to do more to confront climate change. He also pledged that BlackRock would exit investments that present a high sustainability-related risk, such as thermal coal.
While BlackRock has discretion on the implementation of the plan, our strategy has been rooted in the idea that aligning capital with the mission of the university can also be consistent with our fiduciary duty. To this end, the ASU Foundation has committed to transition its endowment portfolio to at least Net Zero greenhouse gas emissions by 2035, which matches the University’s carbon neutrality goals for Scope 3 emissions.
This information is intended to help you consider and plan a high-impact gift to ASU. It is based on current standards, practices and laws, which could change over time. We urge you to consult your financial or other trusted adviser before entering into any major charitable commitment.
For more information on the ASU Endowment, please contact:
Jeff Mindlin, CFA
Chief Investment Officer
Your inquiry is confidential and infers no obligation to complete a gift.