Frequently Asked Questions
What is the relationship between the William & Mary Foundation and the university?
The William & Mary Foundation is an independent 501(c)(3) organization that raises private funds to support the priorities of the university. The W&M Foundation is governed by its own Articles of Incorporation, Mission Statement and Bylaws.
How does the William & Mary Foundation invest funds?
The Investments Committee — a group of trustees, many of whom have well-established careers in the investment industry — serves as the W&M Foundation’s appointed members to the 1693 Partners Fund Board of Trustees and oversees the investment of the W&M Foundation’s endowed assets with the help of a professional, experienced staff, which provides day-to-day monitoring and reporting of the endowed assets.
The establishment of asset allocation targets and the development of a “policy portfolio” are at the heart of the investment process. Though disciplined in its creation, such a portfolio has built-in flexibility to match the dynamic nature of today’s financial markets. In addition to reviewing the portfolio annually, the 1693 Partners Fund Board may also make adjustments during the year depending on market conditions. Once the policy portfolio is established, the 1693 Partners Fund Board, in consultation with the 1693 Management Company’s investment team, selects various investment managers and allocates funds according to policy.
Why does William & Mary need private funds? Isn’t the university a state school?
Yes, William & Mary is a public university, but receives less than 11 percent of its operating budget from the Commonwealth of Virginia. Private funds are critical to preserving and growing the excellence of the educational experience at the university.
Does the William & Mary Foundation receive and invest all of the funds for William & Mary?
The W&M Foundation oversees just over three quarters of the university’s endowed assets. The Board of Visitors, the William & Mary School of Business Foundation, the Marshall-Wythe School of Law Foundation, the Muscarelle Museum of Art Foundation and the VIMS Foundation (Virginia Institute of Marine Science) hold the bulk of the remaining assets. Additional assets are held by external trusts such as the Lettie Pate Evans Foundation.
What is the 1693 Partners Fund?
The 1693 Partners Fund is a non-profit, nonstock corporation organized under Virginia law for exclusively charitable and educational purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code of 1986 and more specifically to serve as a pooled investment vehicle to invest and hold the designated investment assets of eligible organizations that support William & Mary. The affairs of the 1693 Partners Fund are managed by its Board of Trustees.
The 1693 Partners Fund went live on January 1, 2021 and replaced the William & Mary Investment Trust (WAMIT), which was created by the William & Mary Foundation in 2004 so that most of the university’s endowed assets could be administered under one structure – thereby reducing the burden of administering endowed assets and increasing the efficiency gained by pooling assets.
To date, the W&M Foundation, Board of Visitors, Marshall-Wythe School of Law Foundation, William & Mary Business School Foundation and Murray 1693 Scholars Foundation are all members of the 1693 Partners Fund. The 1693 Partners Fund has appointed the 1693 Management Company, LLC, a wholly owned subsidiary of the W&M Foundation, to serve as the Fund’s investment manager.
How can I set up a named endowment?
An endowment can be created with a minimum $100,000 commitment. These endowed funds can be named in honor or memory of a family member, a beloved professor, or other individual or group, and may be created for a variety of educational purposes at William & Mary, including scholarships and faculty support. For more information, contact Foundation staff members.
How does the William & Mary Foundation determine how much of its annual income is spent on university priorities?
The W&M Foundation typically expects that investment returns will not only preserve but enhance the real value of the endowment after funds are released for use, the object being to achieve a real growth of 1 percent in the long term. (Real growth is the return after subtracting annual spending and accounting for inflation.) In so doing, the W&M Foundation preserves the purchasing power of endowment assets for future generations.
The Executive Committee, in consultation with the Budget & Finance Committee, Investments Committee and Development Strategy Committee, decides an annual spending rate. The fiscal year payout is calculated using the banded constant growth methodology and is based on the prior year unit payout rate increased by a growth rate and multiplied by units held as of the December 31 prior to the start of the fiscal year. The payout is banded by a 4 percent floor and a 6 percent cap based on a percentage of the average market value of the investment portfolio for the most recent twelve quarters, ending with a December 31 valuation date.
How does the William & Mary Foundation determine the uses of its available funds?
Donors often make commitments to the W&M Foundation in the form of endowments that are either unrestricted or restricted to particular priorities — such as scholarships, professorships or programs; donors may also give expendable funds to the W&M Foundation. Distributions from the investment portfolio support a donor’s restrictions as to use, or, in the case of unrestricted support, the university’s most pressing needs.
What is the difference between endowed and expendable funds?
Gifts to endowment are invested in perpetuity; Board-approved payout from the investment is distributed on an annual basis to support the funds’ objectives. Alternatively, expendable funds, whether restricted or unrestricted, can be fully spent in support of a donor’s intended use.
How soon after it is established does an endowment begin to benefit students and faculty?
Gifts to endowments will begin to generate a cash flow for the designated purpose in the fiscal year following the calendar year in which they are received. For example, gifts received and deposited during the 2022 calendar year will generate a budget in the academic year beginning July 1, 2023.
How do changes in the economy affect the William & Mary Foundation’s investment decisions?
The perpetual nature of the endowment allows the W&M Foundation to take a long-term perspective in developing its investment policy, which in turn enables implementation of its investment strategy without being significantly influenced by the day-to-day fluctuations of the financial markets.