DW’s family has a long history of teaching at Local U, DW graduated from the system, and a few year’s ago she endowed a scholarship there. Annually we get an update on the endowment fund the U runs as well as a short bio of the scholarship recipient.
A few interesting notes that may or may not be applicable to retirement investing/management.
–they use a 4.5% withdrawal rate
–they average the endowment value over several years (guessing 5) to base their withdrawal rate on to make for less year to year variation in funding programs
–they are only spending capital gains, i.e., not touching the principle
–the target return over time is inflation plus 5.5%
–investment breakdown is roughly 40% public equity, 25% private equity, 20% bonds, 10% real assets, 5% cash/other
–over time they have been hitting their investment return rate though obviously has occasional yearly misses though nothing tragic.
Wish they gave more detail into specific investments, I’m sure it could be found in public records somewhere since it is a public school but not that curious.
Biggest difference, they don’t plan on touching principle where as an individual we might/will. An endowment lives forever where we have an expiration date so that is the major difference in planning.
FWIW, our scholarship is a science scholarship and the past 2 recipients have been women on the softball team.