In speaking with student groups over the past year, it has become clear to me that it’s not broadly understood how critical SAIC’s endowment is for keeping the cost of tuition down, ensuring that we have funds to invest in student scholarships, and maintaining the robust academic and extracurricular programs that make the School one of the leading art and design schools in the country.
Simply put — an endowment is a set of financial assets held in perpetuity to support the work of a non-profit institution, such as a museum, college, or university. The assets that make up an endowment are typically given to the institution by donors who wish to support the mission of the non-profit. The donation is made with the requirement that the original gift amount (known as the principal) be preserved in perpetuity and that the income earned from investing the principal be used for the specific purpose stipulated by the donor.
The endowment of the School and Museum is invested together to produce annual income that is withdrawn each year to support the purpose designated by the donor. Museum donors create endowments to support such things as art acquisitions, conservation work, or curatorships. SAIC donors give to support student scholarships — Massey, First-Generation, and Chicago Scholars, for example — or to support paid internships, Homan Square, named faculty chairs, lecture series, or the Wellness Center.
At the end of Fiscal Year 2024, the total endowment balance for School and Museum was $1.55 billion of which $420 million belongs to the School.
The School builds what is known as a “balanced budget” each year. That means that we aim to have our income equal our expenses. Our commitment to balanced budgets is rooted in financial problems that the School experienced in the 1990s, which we are intent on not repeating.
The majority of our revenue comes from student tuition. But, that accounts for only 79% of what it costs to run the School each year. We make up the gap from income earned from other sources, such as rental fees for use of our facilities paid by outside groups, annual charitable giving to the School and, importantly, from the investment income we take from our endowment. Eight percent of the funds needed to run the School each year come from the endowment. The 90% of our students who receive financial aid benefit directly from the endowment. And since it costs more to run the School than tuition covers, even those students receiving no financial aid pay a lower tuition rate than would otherwise be possible. Without the endowment supporting our budget each year, we could only balance the budget by raising additional revenue through tuition increases, or by making significant costs cuts through the reduction of services and resources on campus.
This explains why the president and our fundraising team in the Office of Advancement devote so much of their time each year to building our endowment. The endowment’s growth is one of the best ways we have of holding the cost of tuition down and ensuring that the School has the financial strength to continue to provide our students with an exceptional art and design education.