Description
The CEF is the investment pool consisting of the University’s endowments. An endowment is a permanent fund established through private gifts to support the program(s) specified by the donor.
The CEF operates similar to the mutual fund. When an endowment gets initially added to the CEF, it buys units in the fund at the CEF unit market price at that time. Each individual endowment maintains a separate identity but is commingled with all endowments for investment purposes.
The University of Washington Investment Management Company (UWINCO) manages the CEF.
Objectives
The primary objective of the CEF is to provide permanent funding for endowment programs while preserving the purchasing power of each endowed gift over time. This objective drives spending policy, return requirements, long-term asset allocation and risk tolerance.
The secondary objective is to provide a steady stream of income to support individual programs. This influences the spending formula used to calculate distributions.
Spending Policy
The spending policy authorizes the transfer of funds from the CEF to support the purpose designated by the donor. The spending policy is set by the Board of Regents.
The purpose of a spending policy is to provide a disciplined and reasoned approach to moving money from the CEF on a predictable and consistent basis. This policy helps preserve intergenerational equity, the idea that future generations of students and faculty receive the same level of benefits from the CEF.
The spending policy is calculated as a percentage of average market value of the CEF over a rolling five year window. The CEF returns are netted against the external management fees.
Distributions from the CEF are used to sustain the University’s academic excellence by supporting outstanding faculty, innovative programs and student scholarships.
Spending Policy Update
The Board of Regents have a fiduciary responsibility to set an endowment spending policy that maintains the CEF's purchasing power to ensure the same level of program support in the future as it provides today. To keep distributions apace with inflation, University Advancement, the University of Washington Investment Management Company (UWINCO) and the Office of Finance, Planning & Budgeting recommended an increase in the spending rate from 4.5% to 4.75%, effective July 1, 2026 (FY27).
In June 2025, the Board of Regents approved an amendment to CEF Policy to increase the total spending rate to 4.75% beginning in FY27Q1, with a five-year smoothing period increasing program distributions and decreasing administrative fees in accordance with the guidelines below:
- Effective the first quarter of FY27, program distributions will increase from 3.60% to 3.85%. The administrative fee will remain at 0.90%
- Subsequent to Q1 FY27, on a quarterly basis, the program distribution rate will increase by 0.0075% and administrative fees will decrease by 0.0075% over a 20-quarter period, achieving a final rate for distributions of 4.0% for programs and 0.75% for administrative fees by Q1 FY32.
- Prior to FY27, the 20-quarter phase in period will be reviewed for purposes of potentially modifying the duration of the phase in period.
Investment Performance
Details of the CEF’s investment performance are available in the Quarterly Investment Performance Report
Establishing an Endowment
If you are interested to learn more about establishing an endowment please visit the Donor Services website or email steward@uw.edu.