The donated money is then invested, and the interest from the investment funds the endowment’s goals.
The endowment focuses on the long-term growth of UNC, especially through funding scholarships and faculty positions.
King said the percentage of the total endowment made available each year for use by the school changes depending on economic circumstances.
That percent bottomed out at 4.4 percent in 2008, and increased to 5.6 percent for the last fiscal year.
King said his group invests the endowment conservatively compared to other universities.
“We tend to go down less in down markets and up less in up markets,” he said.
“In fiscal (year) 2009, a lot of the Ivy League schools with very large endowments reported losses of 25 to 30 percent, and we lost 19.8 percent,” he said.
By contrast, the value of UNC’s fund increased 14.4 percent from 2010 to 2011, while the University of Virginia’s endowment value increased 20 percent.
During the tuition and fee advisory task force meeting on Monday, students questioned Executive Vice Chancellor and Provost Bruce Carney about why UNC hasn’t used endowment funds to make up for the losses in state funding.
Dick Mann, vice chancellor for finance and administration, said this funding isn’t as available as it seems, with the vast majority of it being donated for specific uses.
“Most of that is already budgeted for very specific things,” he said.
He added that private universities typically have more unrestricted private funds than public universities.
Del Helton, associate director for donor relations in the College of Arts and Sciences, said the college has not considered dipping into its endowment.
“You want this money to be here for future generations,” she said. “It’s very dangerous over the long term because once that money is gone, it’s gone.”
Cecil Wooten, chairman of the Department of Classics, said endowments are crucial for the department.
He said the J. P. Harland Endowment Fund provides about $8,000 a year for graduate archeology students to travel to Europe, which is necessary for their education.
But the endowment also attracts students to the department, he said.
“When graduate students apply to this department … one of the questions they ask is, ‘Is there money available for travel in the summer?’” he said. “If I said no, we would not attract a lot of the good students that we do attract.”
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