Managing Endowment Fund Income in Universities

Abstract

In this paper, we discuss the methods of endowment management existing in the world and their applicability to the Russian university system. The endowment spending research focuses on the following issues: reinvesting endowment income; identifying the size of expendable endowment income; using the endowment body, not only income; choosing endowment spending policy, rule and rate endowments, etc. We provide an overview of endowment fund financial indicators and endowment spending allocation in Russia. Based on the example of the HSE Endowment Fund, we analyze the use of endowment spending rules and model of financial indicators for 2008–2014. The University’s Endowment Fund endowment spending policies implement the preservation principle, which may be reasonable in a stable economy. However, the viability of the principle is questionable in the crisis, the more so since the endowment is mostly in rubles. Using net asset valuation methods, the HSE Endowment Fund could provide equity between generations with annual distribution of income in favor of the next and current generations.