The Smith College endowment, which is comprised of approximately 2,000 individual funds, finances a portion of the operating and capital needs of the institution. In addition, it includes a number of restricted endowments funding specific areas including professorships, scholarships and departmental support.
Individual endowment funds may be established by the Board of Trustees or through a restricted gift and the funds are invested and maintained in perpetuity.
The Board of Trustees sets Smith’s annual level of endowment spending from the budget development process.
In 2013–14, approximately 33 percent of the college’s operating budget is funded from investment return. With this support, the college is able to provide a premier educational experience, financial aid for students with need, and high-quality facilities.
The college’s endowment spending rate sets a responsible annual contribution to operations while providing a measure of protection against periods of declining returns. The spending policy provides that the income distributed per share from the endowment will typically increase by 4 percent annually as long as the resulting amount is more than 4 percent and less than 6 percent of endowment market value. For 2013–14, the college’s spending rate, as of the beginning of the fiscal year, was 4.8 percent. The spending rate has averaged 4.9 percent over the past decade.