Higher Education Endowments: How To Access When Needed Most

Many colleges and universities have endowments. In the last few years, institutions of higher education have had more questions about how to access their endowments – between the COVID-19 pandemic and periods of significant market volatility, the need for cash has been acute at times. This brief piece addresses legal questions related to endowments and how colleges and universities can work with counsel to have greater access to their endowments when needed most.

What is an "Endowment?"

Though "endowment" is colloquially used to mean any assets that are held for the long-term, an "endowment fund" is a legal, defined term of art under the Uniform Prudent Management of Institutional Funds Act (UPMIFA), which has been adopted in some form in forty-nine (49) states — only Pennsylvania has not adopted in any form and the District of Columbia. Specifically, an "endowment fund" is "an institutional fund or any part thereof that, under the terms of a gift instrument, is