How an endowment gift works
The following is an example of how an endowment gift works and the benefits Northwest Missouri State University, its students and donors:
- An alumnus of Northwest Missouri State University makes a gift of $10,000, the minimum required to endow, to an academic college or program, to establish a named endowed scholarship in memory or in honor of an individual/s. Please see Endowment Policy for more information.
- A gift agreement is drafted between Northwest and the donor, granting that the gift will be added to the Northwest Endowment and used solely for its stated purpose.
- The donor's named scholarship buys units in the Northwest Endowment, similar to how one buys shares in a mutual fund.
- The Northwest Foundation Board of Directors prudently invests the donor's gift across major asset classes in the Foundation's portfolio to maximize long-term total return, within acceptable levels of risk.
- A predetermined portion of the annual return set by Northwest Foundation Board of Directors, which is currently calculated at 4 percent of the three year average, is used to provide a scholarship for one student per year. The fund's principal remains intact. Please see Distribution Policy for more information.
- The remainder of the annual earnings is reinvested providing a hedge against inflation and to generate growth.
- The named fund continues to grow, ensuring future scholarship support. Contributions can be made to the principal or to increase the amount available for the scholarship at any time.
As you can see, the advantages of an endowed fund are many. A student receives financial support; the University is able to use the scholarship to recruit and retain top students; steady revenue allows Northwest to plan for future needs; and the donor has created a living legacy.
The example above is just one of the many ways endowment gifts can have an impact. In addition to scholarships, donors can endow faculty chairs or professorships or support academic programs in the Melvin D. and Valorie G. Booth College of Business and Professional Studies, College of Arts and Sciences, College of Education and Human Services or Athletics.
To learn more about creating an endowment as a one-time gift, pledge or bequest, contact the Office of University Advancement at email@example.com or (660) 562-1248.