Frequently Asked Questions

  • Endowments

    What is an endowment?

    There are two types of Endowments:

    A permanent (“true”) endowment is a fund established in accordance with donor restrictions, to exist in perpetuity.

    A quasi endowment (sometimes called “board designated”) is a fund that functions like an endowment, but without any legal restriction to hold the fund permanently

    The difference between a true endowment and a quasi endowment is that the principal of a quasi endowment may be spent at some point. The principal of donor-established quasi endowments may be spent in accordance with donor terms and restrictions. The principal of a University-established quasi-endowment fund may be spent when the designation of the fund as a quasi-endowment is lifted by the academic unit that originally imposed it. The amount invested in the endowment may not be accessed for a period of three years, but spending of the income may begin once set up and distributed. The endowment portfolio invests for the long term, so we need to prevent frequent short term deposits and withdrawals.

    What do I do if I am unsure of a fund’s purpose?

    If you have reviewed the Endowment Term Sheet and have questions about the appropriate use of the fund, you should contact the Director of Endowment Compliance who will work with you, in conjunction with the Office of the General Counsel and Office of Alumni and Development, as appropriate, to answer your questions about the fund’s purpose.

    What should I do if I cannot use an endowment fund according to its terms and restrictions?

    The University and its faculty and employees are legally obligated to use endowment funds in accordance with donor terms and restrictions. Modification of these restrictions is a significant undertaking and can only occur through one of the following three ways:

    1. Written consent of the donor;
    2. Successful application to a court for a modification of restrictions that have become illegal, impracticable or impossible to fulfill (a “cy pres” proceeding);
    3. In cases where the gift agreement contains a provision addressing modification of fund purpose, modifications can be made in accordance with the process, and within the limitations, set forth in the gift agreement.

    If you have an endowment fund that cannot be used according to its terms and restrictions, please contact the Director of Endowment Compliance who will work with Office of Alumni and Development and the Office of the General Counsel to evaluate whether the fund is a candidate for one of the these means of modification.

    What is a “plain vanilla” endowment fund?

    A “plain vanilla” endowment fund (whether dedicated to the support of a professorship, research in a particular field, a fellowship or other) has terms and restrictions that are general and straightforward, without additional layers of more expansive or restrictive language. For example: The terms of a plain vanilla professorship fund would simply state that the fund be used to provide support to a professor's teaching and research in a particular academic area, such as Art History or Neurology. The terms of a professorship fund that is not plain vanilla would contain more specific and/or limiting language as to how the funds may be used.

    What is an ‘underwater’ endowment fund?

    An ‘underwater’ endowment is a true endowment that has a market that has decreased below the value of the original gifts to the fund, due to market fluctuation or other reasons.

    What is the Endowment Spending Rule?

    The spending rule is a formula used to determine the endowment payout each year.  It is calculated annually by OMB and approved by the University's Trustees.  Departments are provided this rate as part of the annual budget process to enable the budgeting and spending of endowments. 

    How can I spend endowment funds?

    This depends on the terms and restrictions of each individual endowment fund. The terms of the original gift agreement (not the endowment create form or other summary document) limit the types of expenses that can be funded with the endowment payout available from any individual endowment. Endowment payout cannot be spent on expenses that are similar to but not included in the terms of the gift agreement. The terms of an endowment cannot be altered without subsequent written correspondence from the donor, or successful solicitation of New York State court for a change to the terms, unless the gift agreement provides otherwise.

    What is Endowment Principal Decapitalization?

    Decapping is appropriating for expenditure the net appreciation, reinvested income and/or principal from an endowment fund beyond the amount distributed as a result of the spending rule. See University policy “Decapping Endowment Funds” for details.

    How can I locate documents?

    Most relevant information about endowment terms can be found on the Endowment Term Sheets, which are available via the Endowment Administration website ( on the "Term Sheets" tab. If you need to find additional documentation you should:

    • Contact the Senior Business Officer and Development Personnel within your schools and departments
    • E-mail, who will search the Advance database, and if necessary, OGC and/or Archives.

    What if we don’t have the $50,000 minimum? What do we do?

    There is a difference between current-use fund transfers to an endowment and funds directed to an endowment before the $50,000 minimum is attained. When development officers solicit funds, some choose to write in their solicitation material that funds are being raised for a specific endowment. In that case, the donors are being told their funds will be directed to specific Endowment. The University has an obligation to place these funds in an endowed fund and mail a tax receipt to these donors to show where their funds are being credited. Some development officers are more conservative in their solicitation material so they would gather the funds in a current-use fund and then transfer to the endowment later when the $50,000 minimum is reached. Exceptions to the $50,000 minimum are approved by the University’s Gift Review Committee.

    Who should I contact if I have additional questions or concerns?

    The University has created a separate website,,which contains a great deal of additional information about endowment administration and compliance. In addition, a separate email address has been created to manage responses to any additional questions or concerns you may have.

    Specific inquiries should be directed as follows:

    Questions regarding the financial administration of endowment funds:
    Office of the Controller.
    Contact: Contact: Jacqueline Erickson
    Director, Endowment Administration and Compliance
    Phone: (212) 854-9689

    Questions regarding legal issues (e.g., legal interpretation of terms and restrictions, modifying restrictions):
    Office of the General Counsel
    Contact: Remi Silverman
    Associate General Counsel
    Phone: (212) 854-0287

    In addition, the Office of University Compliance provides a compliance hotline website for confidential, anonymous and open communication of any compliance concerns or suspicions of business misconduct. For more information, please refer to:

    Term Sheets

    What are the Endowment Term Sheets?

    The Endowment Term Sheets are an easy way to locate the key terms and restrictions of endowments that you are managing.

    • Click here for access to the quick reference guide to using these Term Sheets

    As part of this ongoing compliance initiative, it is important that your department reviews the Endowment Term Sheet for each of its endowment funds. Please read each Endowment Term Sheet in its entirety to ensure a full understanding of all the terms, restrictions and obligations.

    Where can I find the Term Sheets?

    Click here to access the Term Sheets.

    How do I get security access to search the Term Sheets?

    You must do two things:

    • Complete the Endowment Administration and Compliance Training. Register for a class.
    • Complete the Financial Systems Security Application (FSSA) in ServiceNow (section 4.4) to request access to the Term Sheets.Your departmental DAF will approve and set up access in the FFE Security Administration Module. 

    My search was unsuccessful. What does this mean?

    An unsuccessful search may occur because:

    • You do not have security rights to search the Term Sheets. Please see How do I get security access to search the Term Sheets?
    • Your security access does not allow you to view that term sheet, as it is outside the department range for which you were given access. Please speak with your departmental administrator if you believe your rights should be modified.
    • The creation of the Term Sheet is in process.

    Contact if you have any questions

    In what ways can I search for Term Sheets?

    Once you have accessed the Term Sheet tab page, you may search a fund by:

    • ARC Project
    • Advance Allocation Code
    • By School or Department
    • By Keyword (part of the Fund Name)

    If I search by School or Department, what results will be displayed?

    You will only see what you have security rights to access.


    • You have access to view all of the Business School (ARC department 51-00-00X). If you search by School, all endowments related to that School will be displayed.
    • You have access to view only the Chazen Institute at the Business School (ARC department 51-60-102). Only endowments related to this specific level 8 department will be displayed.

    Is it possible that a Term Sheet is not yet available for a fund?

    Yes. As we continue to research and prepare these, we will contact your department for assistance as needed.

    What if I have updated information, questions, or concerns regarding a Term Sheet?

    The information in the Term Sheets was extracted from the gift documents in Advance and from additional documents collected from across the University. We can work together to continue to improve this key compliance tool. Please contact us if you:

    • Have additional or more recent information about a fund
    • Have any questions about interpretation of the terms of a fund
    • Think there is a discrepancy between the information in the Term Sheet and your understanding of the fund

    You can find us:

    • Email:
    • Mailing address:
      Office of Endowment Administration and Compliance
      Jacqueline Erickson
      615 W131st St, 3rd Floor
      Studebaker Building
      New York, NY 10027

    Please reference the ARC project or Advance Allocation code

    Why might the “Created Date” differ from the dates of the cited documents?

    The created date refers to the date established in the development system, which in most cases varies somewhat from the dates on the documentation. For completeness, a number of endowment funds were added to the development systems long after they were originally created. Many of the allocations “BXXXX” are older endowments that were all given records in the development system in 1997.