UT Funds Approach Half Billion Dollar Milestone (460)

KNOXVILLE, Tenn. — University of Tennessee endowments and trusts are approaching the half billion dollar mark after gaining a record $81 million last year.

 UT President Joe Johnson said Friday the funds, which totaled $482 million on June 30, 1997, have increased significantly since 1990.

“The funds have more than doubled from the $210 million invested in 1990,” Johnson said. “The increase is a tribute to the generosity of our alumni and friends, combined with strong returns on our investments.”

 Of the public schools participating in a recent endowment study by the National Association of College and University Business Officers, UT ranked 21st.

 The funds include the university’s consolidated investment pool, $269 million; separate endowments, $13 million; life income trusts, $38 million; funds of the University of Chattanooga Foundation, $77 million; and the Chairs of Excellence Program, $85 million.

 Most UT endowments are part of the consolidated investment pool. They represent gifts, grants and bequests made to the university with the understanding that the principal will be invested to produce income, usually for specific purposes.

 “Endowment building is extremely important because it creates a permanent base of support for excellent faculty, outstanding students, innovative research and high quality extension efforts,” Johnson said.

Few endowments generate income for the general use of the university, Johnson said.

 “Most of our donors have ties to some special part of the university,” Johnson said. “They tend to direct their support to a particular campus, a particular institute, or a particular program.”

 The $269 million in UT’s investment pool represents an increase of 181 percent over the past seven years — the result of $82.7 million in new gifts and $90.4 in investment earnings.

 “Over the seven-year period we distributed $46.4 million to programs designated to benefit from the endowments,” Johnson said. “The income distribution is based on 5 percent of the pool’s average market value over three years.”

 Funds of the University of Chattanooga Foundation, which totaled $77 million on June 30, are invested solely for the benefit of UT-Chattanooga. “The total is up $13 million from the previous year after $2.5 million in income was distributed for scholarships and programs at UT-Chattanooga,” Johnson said.

 Assets of the UT Chairs of Excellence Program are administered by the treasurer of the State of Tennessee. Income from the UT program is devoted entirely to support of endowed professorships at UT’s campuses.

 The program distributed $3.1 million to the campuses last year, Johnson said.

 Life income funds are trusts held by the university to generate income for beneficiaries designated by the donor. Upon death of the beneficiaries or other termination of the trust, the assets become available to the university.

 Separate endowments are funds held by the university in accord with investment requirements or limitations imposed by the donor.

 Contact: Dr. Joe Johnson (423-974-2241)