Pay It Forward: Understanding University Endowments

Universities or colleges constantly receive donations of money or other financial assets from private individuals (usually alumni) or institutions to fund their operations and capital requirements. Upon receipt of the endowment, the academic beneficiary then complies with a fairly strict policy allocation to make sure that their specific needs funded, and that a substantial part of the resource is invested to account for inflation and supplementary expenditures.

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Two of the more common types of university endowment are the following:

Endowed professorship: Also called endowed chair, an endowment fund can be specifically used for a designated position in the university. Not only will the funding augment the operating budget of the school, a professorship is also considered an honor in the academe.

Endowed scholarship or fellowship: Endowment funds can also be allotted for the tuition of a number of scholars, along with other costs incurred in providing the students education. The scholarship can either be merit-based or need-based, based on the preference of the school or the donor.

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John Kleinheinz, an acclaimed leader in global investments and finance and hedge fund manager, appreciates the concept of paying it forward, and has therefore created endowments in various universities and schools. An alumnus of Stanford University, Kleinheinz has endowed there two professorships in environmental law and European studies.

With his wife, Martha, who shares his vision in extending a helping hand to those in need, John Kleinheinz has donated substantially to other academic institutions, including Southern Methodist University, where their daughter attended college, and Our Lady of the Lake Catholic School in Oregon, where Kleinheinz graduated. Read more about his philanthropic activities on this website.