What is an endowment?
An endowment is an amount of money given to the University with a stipulation that the funds are to be retained and invested to generate annual earnings. A portion of the annual earnings is used to award student scholarships, provide faculty development or support programs within the Athletic Department as established by our donors.
How does an endowment work?
When a donor establishes an endowment, the contributed funds are held, maintained and invested in the University's endowment pool. Over time, as earnings accrue, so too does the market value of the fund. At Alabama, it is our goal for endowments to provide approximately five percent of the fund's market value in support of the purpose for which it was established. As the fund's corpus (principal) is never spent, the endowment lives in perpetuity, providing a wonderful way for donors to leave a lasting legacy in their name or in the name of a loved one forever.
Can I restrict the use of an endowment?
Within reason, yes. Donors may restrict the use of funds from their endowments to support areas such as scholarships, programs, facility maintenance, coaching, etc. And, more specifically, for a particular sport such as football, gymnastics, Olympic sports, etc. If this is of interest to you, please contact a member of the development staff for more information about what your available options.
Why are endowments so important?
Ticket sales, annual TIDE PRIDE donations, and other event-driven revenue can all fluctuate from year to year, and it is impossible to say today whether the next 100 years will witness the rise of new revenue sources or the decline of existing ones. Endowments, however, yield their returns in perpetuity: the initial gift and additional contributions are invested permanently and produce a source of funds to which UA Athletics can turn each year. In supplying steady income, endowments both reduce the impact of fluctuations in the Department's annual operating budget and provide UA Athletics with the resources and the flexibility to invest strategically in areas of particular need or opportunity. Simply put, endowments provide stability and offer the greatest potential for long-term success and sustainability.
How will I know how the endowment I established is being used?
We provide annual stewardship reports with an overview of how the investment of the fund is performing and information about how the endowment is being used.
Can I name an endowment in my name or in the name of someone special to me?
Absolutely, and we encourage you to name your endowment in a way that is most meaningful to you. Endowments are a fitting way to build a legacy or honor a loved one.
Are there minimum levels to endow a fund?
Yes. Depending on the type of endowment being established, minimum endowment levels are set by the Crimson Tide Foundation Board of Directors and are as follows:
|Athletic Department Operational Fund||$500,000|
|Head Coaches' Championship Performance Fund||$100,000|
|Bryant-Denny Stadium Maintenance Fund||$50,000|
|Coleman Coliseum Maintenance Fund||$35,000|
|Named Endowed Athletic Scholarship Fund||$25,000|
What is considered to be a fully endowed athletic scholarship?
Given the current cost of tuition, we consider a fully endowed athletic scholarship to be $300,000.
How do I endow a fund?
Please contact the Crimson Tide Foundation to talk with a development officer who can work with you to discuss your options for achieving your philanthropic goals through a gift of endowment. Without pressure, the development officer will walk you through the steps necessary to establish an endowment with the Crimson Tide Foundation.
Does my endowment begin supporting Alabama Athletics right away?
Endowments typically require about a year in the investment cycle to have sufficient earnings to begin supporting the purpose for which it was established.