Article I
The Endowment
How universities accumulate, invest, and are constrained in spending permanent capital.
- Article
- I
- Clauses
- 5
- Numbering
- 1.1 – 1.5
- Field
- The Endowment
Clauses under this Article
In numbered order
- 1.1 Permanent Capital, Not a Savings Account Explains the legal structure of an endowment as a perpetual fund held in trust, distinct from reserves or operating cash. Argues that the savings-account metaphor, common in press coverage, misrepresents the legal constraints entirely.
- 1.2 The Five-Percent Question Walks through how universities calculate their annual endowment payout — the smoothing formulas, the IRS minimum-distribution pressure, and why the percentage fluctuates. A step-by-step procedural piece, not an argument.
- 1.3 Strings Attached Distinguishes restricted gifts (tied to a named chair, building, or programme) from unrestricted ones, and explains why universities prize the latter. Uses documented examples of restriction clauses to show what donors actually write into gift agreements.
- 1.4 The Yale Model and Its Imitators Describes the shift in the 1980s–90s from bonds and equities toward alternative assets — private equity, real estate, hedge funds — and the institutional logic behind it. Covers the model as a structural phenomenon, not a personality profile.
- 1.5 What Happens When a Gift Goes Wrong Examines documented cases where gift agreements became contested — restricted funds whose purpose expired, naming rights that proved embarrassing, conditions courts were asked to modify via cy-pres. Neutral reportage of public record.