Guidelines for Annual Earnings Allocations
Updated June 2017
The College of Humanities and Sciences uses private endowment resources to support the work of its faculty in the pursuit of excellence in scholarly efforts that may not otherwise be possible. As part of these ongoing efforts, endowed chairs and professorships are used to attract, recruit, reward, and retain outstanding faculty who have distinguished themselves through their teaching, research, scholarship, service, creativity, and innovations.
Allocation of Annual Earnings
Each year, the College has the opportunity to take a distribution of the annual earnings generated from the investment of endowed funds by the VCU Foundation. The annual earnings distributions for all endowed chairs and professorships in the College shall be used for the intended purpose(s) set forth by the respective donor and allocated as follows unless otherwise stipulated by the gift agreement.
- 45.00% shall be used to cover a portion of the overall salary and fringe benefit costs of the endowed chair or professorship. If the faculty member is on a 9-month contract, they would also be granted 1-month summer salary upon request, not to exceed 11.11% of the 9-month contractual base salary. If the faculty member is on a 12-month contract, they would be granted a salary supplement equal to one-month of their 12-month contractual base salary. If a second endowment exists to support programming, the portion of the endowed position fund allocated to salary and fringe benefit costs shall be increased by an amount equal to 50% of the annual earnings of the program fund.
- 40.00% shall be used for program and activity support unless a separate endowed program fund exists, in which case, this percentage will decrease according to the size of the program fund. The endowed chair or professor shall use these funds for the intended purpose(s) of the donor, which may include research, travel, symposia, lectures, programs, and other activities in accordance with donor intent.
- 10.00% shall be used for collaborative activities, which may include research, travel, symposia, lectures, programs, and other activities, in accordance with donor intent. The use of these funds shall be coordinated by the endowed chair or professor and the respective department chair. Dean’s Office approval would be required to lower the allocation for collaborative activities below 10% in a given year.
- 3.00% shall remain invested in the endowment to support future growth in annual earnings.
- 2.00% shall be used to support stewardship of the respective donor(s) and marketing of the activities being funded by the respective endowment.
Duration of Funding
The annual distribution of endowment earnings shall remain in the respective 6-ledger index and any remaining balance at the end of each fiscal year shall be carried over into the subsequent fiscal year, subject to any change(s) in University Policy regarding 6-ledger funds.
The Dean and Fiscal Administrator for the College shall maintain spending authority for such funds at all times; however, spending authority by the endowed chair or professor may change over time subject to the terms of the review and reappointment process.
If no endowed chairs and professorships in the College exist with principal balances that produce sufficient annual earnings to cover the full salary and fringe benefit cost of the faculty members in those positions, then an Educational & General (E&G) cost component will remain for each position.
If an endowment grows large enough that 45% of the annual earnings would meet or exceed the total salary and fringe benefit cost of the position, then any existing E&G share of the cost would revert back to the Dean’s Office as salary savings. Any remaining portion of the 45% share not needed to cover salary and fringe benefit costs of the position would be reinvested in the endowment.
Five-Year Review Process
All endowed chairs and professorships in the College shall be reviewed formally every five years in the fall semester of the fifth year. The guidelines and procedures for this review can be found in the VCU Policy on Private Support for Endowed Chairs and Professorships, Section 3.4, and the College of Humanities and Sciences Endowed Chairs and Professorships Guidelines for Review.