Establishing Endowed Funds

Foundation staff can assist in writing a detailed fund description specifying how the fund will be used and administered, or, if you prefer, the fund may be left unrestricted with the President of the University or the Foundation Board of Directors determining how the funds should be used to benefit the University of Maine.

Funds may be endowed or quasi-endowed. Permanent endowments specify the principal is to be invested and only the distributions as prescribed by the Foundation Board of Directors (approximately 3.75%) can be distributed—please refer to the Foundation Endowment Spending Policy. A quasi-endowment is managed like a permanent endowment except that the entire fund may be expended in accordance with donor stipulations.

John and Mary Doe Scholarship

The John and Mary Doe Scholarship fund was established at the University of Maine Foundation in 2026 for the benefit of the University of Maine, Orono, Maine with a gift from John and Mary Doe.

The Principal shall be endowed and the distributions, as established by the University of Maine Foundation Board of Directors, shall be used to provide financial assistance to University of Maine Orono students. (It is possible to restrict support to those students who demonstrate financial need or academic merit, who are graduates of a particular high school, or majoring in a particular area of study.)

The donors intend for the fund to be permanently endowed so that the principal shall not be invaded under any circumstances for distributions from the fund.

If the fund is not supported by a documented deferred gift and if the funds received do not equal the minimum required to endow a named fund in accordance with the policy in effect at the time of the initial gift (currently $10,000 within 10 years of the initial gift), the total amount donated may be treated as an expendable gift for the purposes described above.

Should it ever become impossible or impractical to carry out the purposes of this fund as described above, an alternative purpose that best fits the donors’ intent and wishes shall be designated by the Board of Directors of the University of Maine Foundation in its sole discretion after consulting with the President of the University of Maine.

The Office of Student Financial Aid shall select the recipient(s). The Office of Student Financial Aid shall administer the distributions from the fund.

“Endowed Fund” means the Foundation fund or any part thereof in the General Endowment which is not wholly expendable by the Foundation on a current basis under the terms of a gift instrument. The purpose of this policy is to establish the procedure by which the Foundation will annually allocate for expenditure amounts from the Endowed Funds for the purposes for which the funds were established (“Endowment Distribution”) and administrative costs related to fundraising, investment, and stewardship of the Endowed Funds (“Endowment Administrative Fee”).

In managing the General Endowment, the Foundation keeps two primary goals in mind: providing a significant and stable flow of funds to support the purpose of the endowed fund and maintaining the long-term purchasing power of an endowed fund. The Foundation’s spending policy is designed to be in accordance with the Uniform Prudent Management of Institutional Funds Act (UPMIFA). UPMIFA requires the institution to ensure the duration and preservation of the endowment fund by appropriating a prudent amount for expenditure from endowment funds within the restrictions of any gift agreements with consideration to the following factors:

• Duration and preservation of the endowed funds
• Purpose of the Foundation and the endowment fund
• General economic conditions
• Possible effect of inflation or deflation
• Expected total return from income and the appreciation of investments
• Other resources of the Foundation
• The investment policy of the Foundation

Spending Policy
In consideration of factors prescribed by UPMIFA, the Foundation has set a target spending amount of 5.0% of the market value of an endowment. The target spending amount is comprised of 3.75% for endowment distribution and 1.25% endowment administration fee. Annual spending is calculated by applying a % to the trailing twelve quarter average market unit value of the General Endowment as of June 30 to determine a spending rate to be applied to each endowment.

Example: Effective spending rate calculated at 5.0% of trailing twelve quarter average market unit value of the General Endowment Pool as of June 30 – 4.6%
Endowment distribution: (3.75/5.0 x 4.6%) 3.45%
Endowment administrative fee: (1.25/5.0 x 4.6%) 1.15%

Endowment Distribution
Endowment distribution is based on the above spending policy and budgeted for expenditure in the next school year following calculation of the spending rate. Exceptions:

• Endowment distribution will not be calculated as set forth above for endowed funds established pursuant to a gift instrument whereby its terms specify a different spending method.
• The endowment distribution will not be calculated as set forth above for endowed funds that are underwater (market value falls below principal/historic gift value) and pursuant to a gift instrument a distribution from principal is prohibited.
• In the case of underwater funds (current value below principal value) in which the gift instrument permits a prudent expenditure of principal, a reduced endowment distribution rate may be applied.

Example: Calculation based on 6/30/25 value for distribution in school year July 1, 2026 – June 30, 2027.

Endowment Administration Fee
The endowment administration fee is based on the above spending policy and budgeted fro expenditure in the next fiscal year beginning July 1. The fee will be distributed in equal monthly installments to the Foundation’s operating account beginning July 1 and assessed proportionately to all funds invested in the General Endowment.

Effective Date
This spending policy is effective for endowment expenditures beginning July 1, 2026. The policy shall be reviewed by the Investment Committee of the Board, which shall make any necessary recommendations with respect to amendments to this policy to the Board, not less than annually.

Adopted by the Board of Directors of the University of Maine Foundation on November 19, 2025.


Once established, funds are invested as part of the General Endowment Fund of the University of Maine Foundation. The General Endowment is a professionally managed pool of assets that provides much-needed support of the University of Maine.

You may establish a fund during your lifetime or upon your death with one of our deferred giving plans. Many doors choose to establish a fund and contribute to it over their lifetime and provide an additional gift upon their death. A named fund can be established for as little as $10,000, but the Foundation will accept smaller amounts to which additional sums may be added over time. See the various funding options available for making current or deferred gifts.

Example: Donor establishes an endowed scholarship fund in memory of his or her parents with a gift valued at $10,000. Let’s assume the average net investment return of the General Endowment Fund is 6% and the amount of income distributed to the University is 3.75%.

EarningsDistribution to UniversityEnding Balance
Starting Amount——$10,000
Year 1$600$(375)$10,225
Year 2$614$(383)$10,455
Year 3$627$(392)$10,690
Year 4$641$(401)$10,931
Year 5$656$(410)$11,177
Year 10$733$(458)$12,492
Year 25$1,023$(640)$17,441
Year 50$1,785$(1,116)$30,420

Nothing on this website is intended as legal, financial, or tax advice. We encourage you to consult with your attorney, financial professional, and/or tax advisor in your estate planning and charitable giving.