About Our Endowment

The value of endowments

An endowment is a permanent fund, invested for growth and income. Its purpose is to provide a perpetual source of income. Endowment funds provide income that the College of Arts and Sciences can depend on. They support undergraduate scholarships, graduate fellowships, professorships and research funds. They build the bulwark for everything the College must do: recruit the best students and faculty, generate trailblazing research and work for a better world.

By generating a steady stream of income while leaving the principal untouched, the endowment makes it possible for the College to respond to unforeseen opportunities and weather the ebb and flow of state funding, tuition income and federal government grant making.

Endowments can be restricted or unrestricted. Donors who establish an endowment fund in the College receive updates on the fund’s financial performance as well as its usage.

How endowments are invested

All College of Arts and Sciences endowments are invested in the University of North Carolina at Chapel Hill Foundation Investment Fund, also known as the Chapel Hill Investment Fund (CHIF). CHIF is part of the UNC Investment Fund, which also includes funds invested to support other schools in the UNC system.

Following strong performances in fiscal years 2021 and 2022, the UNC Investment Fund recorded a -0.4% return for fiscal year 2023, primarily due to a -12.3% return on the Investment Fund’s private equity asset class. The Investment Fund’s -0.4% return trails its primary benchmark, the Strategic Investment Policy Portfolio, which had a +3.6% return, and the +11.2% return of the more “traditional” equity market-focused Global 70/30 Portfolio. Relative to peers, the Investment Fund’s fiscal year 2023 return ranks in the bottom quartile of the Cambridge Associates’ College and University universe of endowment funds. Despite the relatively weak performance in 2023, the Investment Fund’s returns rank in the top quartile of the Cambridge Associates’ Universe over longer periods of three, five, ten and twenty years. For fiscal year 2024, the Chapel Hill Investment Fund’s Board of Directors approved a distribution of 4.2%.

Oversight and spending policies

CHIF is overseen by a board of directors that includes Carolina alumni who are professional investors. The fund is well diversified among asset classes and fund managers who are recommended by UNC Management Company, Inc. and approved by the board.

Each year, the board authorizes a spending rate for the annual endowment distribution. This rate is determined according to a board-adopted spending policy that seeks to increase the prior year’s “per unit” spending by an inflation factor, typically the Consumer Price Index, so long as the resulting spending rate is at least 4 percent and no more than 7 percent of the fund’s market value.

This “constant growth” spending policy provides a stable, predictable and sustainable stream of spending intended to grow with inflation to support programs at the University. In high return years, investment returns in excess of the spending rate are reinvested so that in down years increases in the distribution amount can be maintained. Using this approach, the spending rate as a percent of the Chapel Hill Investment Fund’s market value fluctuates from year to year. Over the long term, the intent is to distribute approximately 5 percent to 5.5 percent of the fund’s market value annually.

For more information

If you are interested in creating an endowment fund in the College of Arts and Sciences, either with outright gifts or through planned giving, please contact Anne Collins, senior associate dean and executive director, Arts and Sciences Foundation, at 919-962-6183, [email protected].


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