A Q&A on the Endowment

Washington and Lee's endowment supports so many vital aspects of life at the university that increasing it was a main goal of the recently concluded capital campaign. Of the total $542.5 million raised during Honor Our Past, Build Our Future, secured gifts and commitments to the endowment accounted for 61 percent. Furthermore, W&L's ranking in endowment per student increased from 38 to 25 among all American colleges and universities.

Outside of Lexington, questions about large university endowments resurfaced this year on Capitol Hill, with two congressional committees asking colleges and universities with endowments larger than $1 billion, including W&L, for information about how they manage their endowments and spend endowment funds.

Earlier this month, Steve McAllister, W&L's treasurer and vice president for finance, discussed the endowment in depth. Click on a link below to view his responses.

1. What is the purpose of the endowment, and how does it work?

2. What shapes the economics and finances of the University, and how is that related to the need for an endowment?

3. How does Washington and Lee's endowment compare to that of its peers?

4. How is the investment strategy for endowments different from other forms of investing?

5. Who invests or manages our endowment, what is their record, and to whom are they accountable?

6. External trusts account for almost 30 percent of the total endowment value. What are these external trusts and how are they structured to benefit the university?

7. Do schools like W&L assume too much risk through diverse investments?

8. What are the ways in which our endowment gifts might be restricted? In other words, how much of our endowment is flexible?

9. Who or what determines the spending rate for our endowment, and why can't we spend more than a small percentage each year?

10. If someone is considering a donation, are they better off donating to an institution with a large endowment or to one with a smaller endowment? Why?

11. How much of our endowment is directed to the Law School?

12. What is the role of endowment in moderating tuition increases?

13. When it comes to university endowments, is there a such thing as big enough?

14. How much would be enough for W&L to consider going tuition-free, or is that even a goal that should be considered?

15. Is there anything you'd like to add that we have not already talked about?