Endowments and Economic Stability

Why are endowments important?

*Furman's endowment provides funding to mitigate the rising cost of education, thus reducing Furman's dependence on tuition and fees as a revenue source.
* A healthy endowment allows Furman to attract and retain top students, athletes and faculty, regardless of their financial circumstances.
* Because endowments are held in perpetuity and invested for the long term, sources of revenue secured today will benefit Furman University from now on.

A stabilizer during tough times

A strong endowment is an incredible stabilizer for an institution during times of economic stress. An endowment represents a pool of assets held in perpetuity whereby the growth experienced by the investment of the assets provides a stable funding source for the university. Endowment earnings are used to mitigate ever-rising operating costs, provide funding for scholarships and professorships and needed program support.

While Furman's endowment has been affected by the current economic downturn, the institution is weathering the storm with confidence due to prudent planning and foresight. Mary Lou Merkt, Furman's vice president for business affairs, says that a year ago members of the university's trustees investment committee, anticipating turbulence ahead, began reallocating some of the university's endowment to cash.

Furman spends 4.5 percent of a predetermined asset base annually. Funds are spent on scholarships, salaries, new technology and other operating expenses. Many other institutions spend five percent of the actual average market value of their endowment, which can vary greatly. Furman's constant growth spending model helps smooth spending despite volatile financial markets.
As with other universities nationwide, Furman has lost approximately 20 percent of the value of its endowment. We are confident that the prudent management philosophies will continue to serve the institution well into the future.