Revenue generated through private gifts, investment and new strategic opportunities are vitally important sources of funding for the University of Minnesota in realizing its vision for the future. The University of Minnesota Foundation (UMF) is a key partner with the University in building this support. Information on the following pages describes the Foundation’s work in these areas and shows the results achieved during fiscal year 2007.

Managing the UMF endowment
Endowments are the financial cornerstone of any great university, providing ongoing funds for use in attracting top students, retaining world-class faculty, and fueling research and discovery. UMF invests and manages the endowment to provide immediate support for designated programs, ensure growth over time, and keep pace with inflation.

Thanks to new gifts and sound investment strategies, the Foundation’s endowment increased by 20 percent in fiscal 2007, adding $231 million for a total, on June 30, 2007, of $1.4 billion. This growth provided increased funding for established endowed programs and added 309 new endowment funds, bringing the number of endowed funds managed by the Foundation to 3,360.

When a donor makes an endowment gift, a new fund is created and invested by the Foundation to provide a dependable resource for the designated program. Investment returns are added back to the principal to promote growth, and a portion of the fund’s value is paid out to support the program. The payout rate was 4.6 percent in FY07. In addition, a fee of three-fourths of one percent (75 basis points) is subtracted from the return to support administrative costs. The chart on the left shows how the value and payout of a $1 million endowment fund grew during the last 20 years.

Endowments benefiting students
A major fund-raising achievement in recent years has been the growth in support for students through new scholarships and fellowships. In fiscal 2007, donors created 173 new endowment funds for scholarships and fellowships. The combined value of endowment funds supporting students is now $406 million, an increase of 20 percent compared with $337 million in fiscal 2006. Many of these new endowments have also qualified for participation in matching programs, which doubles the amount of scholarship and fellowship money available to students.