‘Generous gifts’: What is UC Berkeley’s endowment fund?

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When students think of UC Berkeley’s funding, their minds often jump to tuition — but among its various revenue streams, such as federal and state grants, the campus’s largest and most stable contributions come in the form of endowments, currently valued at $4.3 billion.

An endowment is a type of gift that supports students, faculty and a variety of programs, according to José Rodríguez, editorial director for University Development and Alumni Relations at UC Berkeley. The UC Berkeley endowment is split into funds raised by both the UC Berkeley Foundation, or UCBF, and the UC Board of Regents.

The funds raised by UCBF are controlled by the Berkeley Endowment Management Company, while the regents’ funds are managed by the UC Office of the President, or UCOP.

UC Berkeley receives private support through grants from organizations such as the Gordon and Betty Moore Foundation. This foundation supports a “wide variety of projects” on campus, including $1.5 million each for the building of the Initiative in Global Change Biology and the initial funding for the Berkeley Center for Cosmological Physics, according to Caitlin Cobb, a spokesperson for the foundation.

Rodríguez emphasized the significance of the UC Berkeley endowment fund and how it relates to the campus’s livelihood.

“For nearly 150 years, generous gifts from alumni, parents, and friends have provided the financial resources necessary to preserve, protect, and extend UC Berkeley’s preeminence,” Rodríguez said in an email. “The university’s endowment is the solid foundation upon which Berkeley’s excellence is built.”

Connie Chen and her spouse Kevin Chou, a UC Berkeley alumnus and founder of the gaming company Kabam, gifted up to $25 million for a new building at the Haas School of Business. This is the largest personal gift by an alum under the age of 40, according to the 2016-17 UC Annual Report on University Private Support.

The UC Berkeley endowment funds a diverse array of student support programs, including undergraduate scholarships, faculty chairs, graduate fellowships and academic programs. About 34 percent of the UC Berkeley endowment is attributed to student support, 23 percent goes toward academic support, 22 percent is allocated to faculty support, and the rest is used for research, cultural programs, libraries and athletics, according to Rodríguez.

“Endowments are governed by individual gift agreements that set the terms for each of the programs funded,” Rodríguez said in his email.

The endowment funds, according to Rodríguez, are completely based on private support and therefore do not rely on any federal or state funding — which means that federal and state budget cuts do not have a direct impact on the UC endowment.

Rodríguez said in his email that the endowment, as a long-term, reliable source of funding, matters because it “allows us to realize our mission of teaching, research, and public service for generations to come — and to see a clearer picture of what lies ahead for Cal.”

At a time when funding for UC campuses is in flux, endowments remain a stable source of revenue for the various endeavors of campuses.

In March, the UC Board of Regents voted to increase out-of-state tuition. The regents were expected to vote on an in-state tuition increase in May but decided in April to table the much-anticipated vote and instead advocate for increased funding from the state for the UC system, which has been on the decline for decades.

UCOP spokesperson Stephanie Beechem said in an email that the UC’s Office of the Chief Investment Officer, or CIO, manages the investments on behalf of the regents. The CIO controls the General Endowment Pool, which consists of retirement, endowment and working capital assets.

“Campus foundations are separately incorporated entities and managed independently from the UC CIO and the UC Board of Regents, with their own independent leadership and board of trustees or directors,” Beechem said in her email.

In comparison to UC Berkeley’s relatively small endowment, “leading” private schools often have more generous endowments because they have been involved in raising endowed funds for a longer period of time, according to Rodríguez. He added that there may be a stronger tradition of philanthropy at these schools with more private support from alumni.

“In this regard, it would be fairer to compare Berkeley’s endowment with that of the other top public universities and UC’s system wide endowment with the top public university systems,” Rodríguez added in an email.

Rishabh Nijhawan is the lead higher education reporter. Contact him at [email protected] and follow him on Twitter at @realRishNij.