<p>“It should be noted that fund raising campaigns seldom add much to the endowment of a university. A large chunk of the funds raised are usually earmarked for various other purposes. The current $4 billion fund raising drives at Michigan and UCLA are not going to increase their respective endowments by $4 billion.”</p>
<p>As Alexandre notes, campaigns don’t add much to the permanent endowment. Typically, fundraising is mostly spent intra-year and is supplemental to operational funds. A capital campaign generally seeks to add 25% to 35% to the annual number, with the hope that that margin can be permanently endowed (added to permanent capital). To that extent, Michigan’s $4Bln campaign will lead to an addition of $800MM to $1Bln to the permanent pool. One hint is that the amount sought to endow scholarships is $1Bln, or roughly the margin that I mention. Most of the other gifts will be used to add to operational support for building or replacing buildings.</p>