Endowment Income Projection
Why should you Estimate Income?
- Scholarships and awards
- Ongoing programs funded by the endowment income
- Support for Professorships and chairs
Instructions for Projecting Endowment Income
Estimate based on most recent quarter’s distribution (distributions received in quarters through 06/30/24).
This approach can be used for quasi, true, and term endowments as long as they are part of the unitized endowment pool.
To do this calculation, you need the following information:
1
The percentage increase or decrease in the 12-quarter average unit market value for the endowment pool – 2.62% increase
2
The distribution amount in an expendable activity for the most recent quarter end.
- Found in Management Reports on the Summary of Rev/Exp in account 49032.
3
Calculate the estimated income for next fiscal year
a) Take the amount from Step 2 and multiple it by 4
b) Take the amount from Step 3a and multiple it by the amount in Step 1 plus/minus 100%
a) Take the amount from Step 2 and multiple it by 4
b) Take the amount from Step 3a and multiple it by the amount in Step 1 plus/minus 100%
Example
1. $500 x 4 = $2,000.00
2. 1.0262 x 2,000.00 = $2,052.40
2. 1.0262 x 2,000.00 = $2,052.40
Additional Notes
- The percentage increase/decrease is calculated after December 31st market values are calculated and is fixed for the next fiscal year.
- This method assumes that the number of units in a particular endowment has not changed. If the number of units has changed, it will change the overall distribution.
- This method DOES NOT work for the following endowments
a. Social Choice Pool
b. Hinckley Pool
c. Separately Invested Endowment
d. Endowments receiving interest only (that have not been invested in the Endowment Pool) - This approach assumes the spending rate does not change
Any questions regarding endowment income, please contact David Sargent at david.sargent@admin.utah.edu.
Updated 2/13/2024