<p>“The University’s investment team is making in average 9.6% annual return. Minus the 4.5% expenses from the endowment, it would still add around 5% per year. It would reach 13 billion by 2020 even without additional input to the endowment.”</p>
<p>Endowments receive gifts, make expenditures and earn capital gains. I believe (not certain) the 9.6% for Michigan is depicted AFTER spending. That is a belief, I don 't guarantee it, but so far the spend and gifts are generally a wash. As the endowment grows the spend will exceed gifts so additions will resemble gains-only to a lesser degree and more heavily reflect the spend rate.</p>