Investment Policies

In keeping with our long-term perspective, we invest our endowed, or permanent, funds with the intent that they grow steadily over time.

Many donors establish endowed funds, which may be named for the donor or someone the donor wishes to honor. KU Endowment places these funds in its Long-term Investment Program, where they are collectively invested in a professionally managed, diversified portfolio emphasizing equity securities.

To find out more about our long-term investments, see our Target Asset Allocation, our investment Performance Objective and our publication Investing in KU (PDF).

The amount of university support provided by endowed funds each year is determined according to KU Endowment’s Spending policy.

The spending policy determines how much may be spent annually from each participating fund to support its intended purpose. The policy also determines the amount KU Endowment may use to offset operating expenses. KU Endowment utilizes a Constant Growth spending policy. Under this policy, distributions in any given year are equal to those in the prior year, plus an adjustment for inflation.

The annual targeted spending rate of the Constant Growth Policy is 5.5 percent of the market value with:

• 4.6 percent out of 5.5 percent allocated to participating funds for current expenditure
• 0.9 percent out of 5.5 percent allocated to KU Endowment as an administrative fee

To ensure we are not spending too much or too little in any given year, the policy is subject to a 4.5 percent “floor” and a 6.5 percent “cap” of the trailing four-quarter average market value.

KU Endowment’s investment and spending policies are overseen by the Investment Committee, one of several standing committees of the KU Endowment Board of Trustees. The policies may be modified by KU Endowment’s Executive Committee upon the recommendation of the Investment Committee to account for changes in market and economic conditions and the needs of KU.