By utilizing an endowment—a permanent fund that the Texas A&M Foundation invests for the benefit of Texas A&M University—Addison Crump ’21 and Lexie ’17 and Trey Yates ’17 ensured their gifts will make a lasting campus impact.
Creating an endowment is straightforward and comes with the freedom to direct your gift for a specific purpose based on your passions at Texas A&M. For example, you may choose to fund an endowed scholarship for students from Harris County, Texas, who are studying petroleum engineering. Aside from scholarships, many donors create endowments to advance faculty endeavors or enhance student programs or Aggie traditions. A signed gift agreement with the Foundation will document your wishes in full. You can also specify the fund’s name: in your name, in honor of a relative or after a favorite professor, for example.
When you create an endowment, the Foundation takes your gift—known as the “original principal”—and permanently invests it in its long-term investment pool (LTIP), a highly diversified portfolio with a current value of nearly $2.6 billion. Each year, a portion of the LTIP is paid out to the university as an annual distribution to fund the purposes designated by donors. This annual payout rate is what supports your passions in Aggieland, while the original principal of your gift will always remain, ensuring a dependable source of funding for the area you choose even in a market downturn.
While $25,000 is the minimum amount required to create an endowment, you can contribute gifts over the course of up to five years. As more individuals contribute endowments to the Foundation’s portfolio, financial support for Texas A&M continues to increase.
How Endowments Work
1. Establish: You create an endowment with a $25,000 gift known as the original principal. This is added to the Foundation’s long-term investment pool.
2. Invest: The original principal is invested and changes in value with a focus on growth.
3. Distribute: Distributions are made annually to support the Texas A&M area you designated.
4. Growth: The original principal is maintained in perpetuity, with a focus on long-term growth and appreciation. Your endowment will provide distributions to Texas A&M forever.
The steps above explain the four-part process of an endowment's cycle.
Impact of a $25,000 Endowment (1992-2022)
These bubbles show the impact of a $25,000 endowment over a 30-year period from 1992 to 2022. The gold circles are the endowment's value, while the blue circles illustrate the cumulative distributions to Texas A&M. By year 20, the cumulative distributions have eclipsed the initial gift value.
*Past performance is no guarantee of future performance.
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