MOUNT BERRY, Ga. — Berry College held $900 million for its 2019 endowment, and uses this fund to pay for student scholarships, the school’s main operating budget, faculty salaries, and campus upkeep.
A college endowment is a fund that supports the operation of an institution. Funds for Berry’s endowment come largely from estates and donors. The corpus of the endowment, or the original sum of money, is generally restricted and cannot be spent in perpetuity. The interest an endowment earns is known as an endowment spend. Unlike the corpus, the endowment spend can be used to pay for a college’s expenses. An endowment allows an institution financial resources and security.
“I see college endowments as an opportunity to secure the budget and maintain expenses for the future,” said Cynthia Court, Vice President for Institutional Advancement.
An endowment’s earnings are often restricted for a certain use. Donors commonly designate their gifts to be used for a specific cause. For example, donors may give a gift to fund one of Berry’s scholarships. 60% of Berry’s endowment earnings pay for student scholarships. Berry’s endowment also provides funding for divisions apart from scholarships. The endowment’s 690 funds pay for the main operating budget, academic instruction, faculty salaries, and campus upkeep.
Martha Berry was very hands-on in creating Berry’s endowment, and instituted a board of trustees. The board of trustees supervises the endowment today.
“There’s a board of trustees that actually oversees everything,” said Debbie Emory, Director of Auditing and Investment Services. “The officers — the president, the treasurer, and the secretary are just corporate officers, but the board actually runs, or makes the big decisions, in conjunction with those officers.”
Donors give gifts to the endowment in an effort to support students and reducing tuition fees. Donors often endow money because they know that their gift will be there in perpetuity, allowing them to leave a long lasting legacy.
“From a donor perspective, it’s about their legacy,” said Court. “From a college’s perspective, it’s about insuring the financial stability of the organization, and keeping tuition down.”
Some donors give to the endowment and allow the earnings to be used for a cause of the college’s choosing. A large part of Berry’s operational budget comes from proceeds from donor’s gifts in the endowment.
Donors will grant funds to the endowment for a number of reasons. Donors commonly give to Berry in support of the school’s mission and principles.
“They like the values of Berry College, they like the kind of education; they believe in a small college, small classroom setting,” said Court. “They believe in the heart of Berry.”
While in the COVID-19 pandemic, donors may see changes in their own finances. This may make them more hesitant to make a financial commitment. According to Court, Berry faced a similar situation during the 2008 recession. Court anticipates the college’s fundraising in 2020 to be impacted by the financial strains the pandemic has put on donors. However, there are donors at this time who want Berry to be able raise more money via donor gifts, in order to create more financial aid available to students.