Principal from the Endowment is invested in a diverse portfolio of assets; these investments then produce an annual return. Through a formula specified during the Stewards for Tomorrow campaign, specific programs and services receive an annual distribution from these investment returns.
The Endowment’s policy is to annually distribute 4 percent of the fund’s three-year average principal balance. In other words, the Endowment averages the principal balance for the three preceding fiscal years and distributes 4 percent of that average amount to specified programs and services. In extraordinary circumstances, an additional distribution may be made.
In most years, a portion of the annual investment returns has been reinvested in the principal, to ensure that the Endowment continues to grow. In the 2018-2019 fiscal year, Endowment investments earned a 9.01 percent return.