FAQs
Hamilton College’s endowment is a $1.3 billion pool of capital. It was built with gifts accumulated from generous donors since the College’s founding over 200 years ago. The regular income generated from the endowment directly supports Hamilton College’s mission to provide an accessible, distinctive, quality liberal arts education for talented students regardless of family background or economic means. Our endowment includes over 1,000 individual funds, with nearly half designated for student financial aid. The endowment also supports faculty salaries, research programs, student internships and career related experiences, lectures, pedagogical innovation, the physical plant, and other College priorities.
Hamilton depends on endowed funds, which generate income year after year, to provide fiscal stability over the long term. Our endowment enables Hamilton to remain a college of opportunity – to attract, enroll, and support the most qualified students regardless of their family’s financial means. It also allows us to recruit and retain the best teacher-scholars to our faculty, ensuring the continual strengthening of our distinctive liberal arts mission.
The endowment supports about one-third of the College’s annual operating expenses, including a substantial part of the financial aid budget. The remaining two-thirds of the annual operating budget is met largely by tuition revenue and fundraising. Income drawn from the endowment is used according to the instructions of donors as stipulated in formal written agreements and verified by auditors, for the following purposes: See endowment fund types
Hamilton’s endowment is overseen by the Investment Committee of the Board of Trustees. The Investment Committee is a select group of board members (outside experts also occasionally serve) who are willing and able to devote significant time to the committee’s important work, have varied and complementary expertise, have experienced several market cycles, avoid conflicts of interest, and proactively plan for succession. The endowment is managed by an internal investment team, led by the College’s Chief Investment Officer, Lauren Jacobson. Lauren and the team are based in New York City.
In order to achieve intergenerational equity between current and future students, the primary objective in managing the endowment is to achieve a total return that, in addition to providing annual income to support the college, preserves the real value of the endowment in perpetuity commensurate with the risk tolerance of the Board of Trustees. A secondary objective is to grow the real purchasing power of the endowment while avoiding taking excessive risk.
In absolute terms, the endowment’s return objective is to earn a 4.5% annualized real rate of return over rolling 10-year periods. The HEPI Index will be used to measure inflation.
As a perpetual institution, it is our fiduciary duty to manage the endowment to support the educational mission of the College and to preserve equity among generations. The endowment has a very long horizon and carries a significant equity bias. The College’s investment strategy incorporates a diversified asset allocation approach, with asset allocation targets defined by the Investment Committee of the Board of Trustees. In line with the asset allocation, the assets are diversified across sectors, geographies, and asset types.
The endowment invests in external investment managers across domestic and international equity, fixed income, real estate, commodities, hedge funds, private equity markets, and market indices. The endowment primarily invests indirectly through funds and delegates the company and security selection to its managers. Hamilton has investments with some of the world’s best investment managers.
See the Investor Responsibility Policy.
Implemented in fiscal 2009, our endowment spending policy is a common industry practice known as the “mixed rule.” The formula uses 70% of last year’s spending plus inflation (HEPI*), plus 5% of the average market value of the prior four quarters of the endowment weighted at 30%. The endowment draw for fiscal 2023 was approximately $52.7 million, 4.2% of the trailing 12-quarter average market value of the endowment. The amount allocated to each endowment is the ratio of units “owned” by each fund in the endowment pool multiplied by the annual endowment draw. Contact Karen Leach, Vice President of Finance and Administration, if further explanation is desired.
*HEPI – the Higher Education Price Index, HEPI is a more accurate indicator of changes in costs for colleges and universities than the more familiar Consumer Price Index.
Governed by a legally binding endowment agreement, your investment in Hamilton will be used solely for the purpose(s) approved by you and the College. We pride ourselves on superb stewardship of all endowed funds and are committed to transparency through annual audits and by directly reporting to donors as outlined in the endowment agreement.
Since most of the funds that comprise the Hamilton endowment are restricted by donors for particular purposes, like financial aid or faculty salaries, the College cannot spend down the endowment like a bank account, even if needed for legitimate priorities. The endowment must also provide financial stability over the very long term, for hundreds of years into the future.
Most gifts from individuals to Hamilton each year are made through the Hamilton Fund. These unrestricted gifts, made by thousands of alumni, parents, and friends complement the income generated by the endowment each year, enabling us to provide the “special touches” that make the Hamilton experience second to none. They act in the moment.
On the other hand, the gifts to the endowment secure the future of the College, ensuring that access to all that Hamilton offers remains open to every qualified student regardless of their family’s economic means.
Donors can provide the capital necessary to establish endowed funds at Hamilton through outright gifts of cash, through transfer of stocks or appreciated securities, through gifts of real estate or real property such as important works of art, and by naming the College as a beneficiary of a will, trust, insurance policy or other retirement asset. While donations may be made at any time and for any amount to the general endowment, the minimum for establishing a “named” fund, one which will bear the name of the donor’s choosing can be found on the Endowing a Fund page.
No. Donors may pledge to make payments for up to five years to fully fund an endowment, though income from such funds will not be available for the designated purpose until the fund is complete.
Yes. Naming a fund in honor of a family member, beloved faculty member or coach, a friend, or yourself provides a personal connection for the recipient of your generosity. Naming a fund also enables the College to share your story and celebrate your legacy with future generations of Hamiltonians.
Yes. You and/or others can make additional gifts to add to the principal or “book” value of your endowment at any time. These additions are often made to commemorate an anniversary, a birthday, a retirement, or other life events. You may also add to your endowment through provisions in your will or other estate plans.
We encourage those who wish to make a contribution to the endowment through their will to document and share their intentions with the College, including a dollar amount if possible and the preferred purpose for which income is to be used. This not only prevents misunderstandings and legal complications, but ensures that your wishes will be honored and that future generations will continue to be blessed by your generosity. For more information, please visit our Estate Planning page.
