For independent schools, an endowment is far more than a financial asset. An endowment fund signals a commitment to the school’s mission, a safeguard against tuition dependence, and a bridge between the generosity of past donors and the needs of future students.
Data from the October 2025 SAIS CFO Pulse Survey shows that endowment holdings vary widely across SAIS member schools. Overall, 24% of respondents report having no endowment at all, while 22% hold between $1M and $5M, and 15% hold $20M or more.
As school size increases, so does both the likelihood and size of an endowment. Small schools (<400 students) show the highest rate of endowment absence, with 39% reporting no endowment and most small schools are in the under-$1M tier. The number of medium-sized schools (401–700 students) without an endowment drops to 24%, with a median in the $1M–$5M range. Large schools (701–1200 students) reflect a notable change. Only 10% have no endowment and the median tier rises to $5M–$10M. The trend continues among the largest schools (>1200 students), where only 6% lack an endowment and their median is in the $10M–$20M range.
For many schools, building an endowment can feel daunting. The following resources are designed to explain the process and offer practical tools for every stage of the journey.
The What and Why of Independent School Endowments
Before boards and advancement teams can make the case for endowment giving, they must first have a shared and confident understanding of what an endowment is, how it works, and why it matters. At its core, an endowment is a permanently invested fund whose earnings, not the principal, support the school’s ongoing operations and priorities. Even a small but well-managed endowment has the ability to create a buffer against economic instability, reduce pressure on tuition, fund faculty professional development, and support strategic innovation that annual budgets can rarely accommodate.
Building an endowment is a deliberate, phased process that unfolds over time and requires institutional readiness at every stage. In the foundation phase, schools establish the structures and governing documents that make responsible endowment management possible. Central to this is the development of an Investment Policy Statement (IPS). The IPS is a formal document that defines the endowment’s purpose, investment objectives, risk tolerance, asset allocation guidelines, and spending policy. Schools must create clarity around gift acceptance policies, fund accounting practices, and board roles.
The growth phase is where development efforts, donor cultivation, and planned giving strategies start to translate into tangible gifts. The board’s investment committee provides focused governance over asset allocation, manager selection, and performance monitoring.
In the stewardship phase, the emphasis shifts to transparency, donor communication, and ensuring that endowment funds are used in alignment with donor intent and institutional priorities.
Schools that are ready to develop an endowment have sound financial management in place, strong governance practices, a culture of philanthropic giving, and leadership that can articulate a compelling and credible case for long-term investment in the institution’s future.
