ENDOWED FUNDS: Gifts made with the understanding that the principal be preserved and invested to generate income over time. Endowed funds are intended to exist in perpetuity. Each year, only a portion of the investment earnings may be used to support the program or purpose designated by the donor.
HISTORIC GIFT VALUE: The total original amount contributed to an endowed fund, or the sum of all donor gifts at the time they were made. Itdoes not change with investment gains, losses, or market fluctuations and serves as the baseline to be preserved in perpetuity in accordance with donor intent.
MARKET VALUE: The total current value of an endowment fund, including the original gifts plus any investment gains or losses. Market value is used in calculating annual spendable income.
SPENDABLE INCOME: The portion of an endowed fund’s investment return that is available to spend each year in support of the fund's designated purpose.
ABOVE-WATER FUNDS: Funds whose market value is greater than the historic gift value by enough to cover both annual spendable income and fees.
AT-RISK FUNDS: Funds whose market value is greater than historic gift value, but by less than the amount needed to cover both annual spendable income and fees.
UNDERWATER FUNDS: Funds whose market value is less than the historic gift value.
UPMIFA: The Uniform Prudent Management of Institutional Funds Act, a Maryland law that guides how nonprofit organizations manage and spend endowment funds. It helps balance current spending needs and long-term preservation and growth, while honoring donor intent.
UMB: University of Maryland, Baltimore
UMBF: University of Maryland Baltimore Foundation
USM: University System of Maryland
USMF: University System of Maryland Foundation
COMMON TRUST: Common Trust of the University System of Maryland