UT Austin has a lot of money in endowments. Why can t it be spent to cover the forecast needs?
Endowments are funds directed by donors to be invested, rather than to be spent. A donor makes this choice because he or she desires to produce a permanently recurring income to support a specific purpose. The donor of the scholarship discussed just above chose to create an endowment in order to assure that the scholarships would be funded every year, on an inflation-protected basis, perpetually. When the University accepts an endowment, it is obligated not to spend the invested sum (the principal or corpus ). Of course, it can spend the current-use income, but only for the purposes defined in the original gift agreement. For this reason, income from established endowments is already committed and cannot have much of a place in the plan to remedy the recurring funding gap. New endowments established in the current campaign can contribute toward the plan, and the plan includes a role for them.
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