Endowment
The RISD endowment is a dedicated and permanent source of funding, composed mainly of philanthropic gifts, that secures and strengthens the core of RISD’s mission now and for future generations.
The Rhode Island School of Design endowment
Made up of many individual funds invested as a single entity, the endowment is designed to sustain and support the college and museum on a perpetual basis as RISD fulfills its mission of educating students and the public in the creation and appreciation of works of art and design, discovering and transmitting knowledge and making lasting contributions to a global society through critical thinking, scholarship and innovation. While the income from its investments is made available to spend each year, the endowment’s principal value remains intact. The primary investment objective is to earn a long-term rate of return in support of the institution’s operating needs while preserving capital for the benefit of future generations.
The Importance of RISD’s endowment
RISD’s endowment, as a permanently invested asset that grows over time, provides a steady source of support for RISD now and into the future. Unlike current-use gifts that may be spent in full immediately, the endowment is forward-looking and furnishes the financial sustainability needed to ensure the long-term stability of the college and museum.
Endowment management
In 2017, the RISD Board of Trustees selected Global Endowment Management, LP (GEM) as an external partner to manage RISD’s endowment. GEM is an outsourced chief investment office (OCIO) primarily serving mission-driven organizations, and has a strong history of stewarding the assets of mission-driven institutions like RISD.
GEM has full responsibility for selecting investments for the portfolio, monitoring and managing risk and reporting investment performance and portfolio information to RISD. GEM deploys the majority of the endowment portfolio with independent, external investment managers who are carefully selected and monitored. These managers each have their own area of expertise, and they have contributed approximately 80 percent to GEM’s outperformance of its peers since 2007, which provides critical funding for GEM’s clients, including RISD.
As RISD’s OCIO, GEM works closely with RISD management and the Board of Trustees Investment Subcommittee. GEM manages the endowment according to the subcommittee’s policy with a focus on supporting the goals of RISD’s strategic plan, and carefully stewards RISD’s financial resources to reflect RISD’s institutional values.
RISD’s statement of divestment guidelines
May 28, 2015
In the exercise of its fiduciary duty to preserve and enhance the long-term viability of the institution, the Board of Trustees of Rhode Island School of Design seeks to achieve the maximum possible return on RISD’s endowment consistent with an appropriate level of risk.
Accordingly, decisions to invest and to divest are based on financial principles and are made by the Board of Trustees in its sole discretion. In rare circumstances, however, the Board of Trustees may also in its sole discretion take political and social considerations into account when a proposed investment or divestment implicates an issue of importance to RISD as an institution and to its constituents as a whole, and not solely to a segment of its constituents, and would be likely to have a meaningful impact on the resolution of that issue. When the Board of Trustees does so, it will strive to make the investment or divestment in a manner that minimizes any potential financial effect.
RISD’s endowment as of June 30, 2025
RISD’s endowment balance
$465 million
RISD's endowment draw
$19.9 million
Frequently asked questions
What does RISD use its endowment for?
The endowment is used to support RISD’s mission: The college and the museum use income from the RISD endowment to educate students and the public in the creation and appreciation of works of art and design, to discover and transmit knowledge and to make lasting contributions to a global society through critical thinking, scholarship and innovation. Endowment funds support critical priorities including but not limited to scholarships, fellowships and other forms of financial aid for students; faculty research and professional development; tools, spaces and equipment for teaching and research; exhibitions, collection development and curation, public education and programming and professional training at the RISD Museum and improvements to the campus’ physical plant and buildings.
How does the endowment support RISD's budget?
Gifts to the endowment remain permanently invested, and each year a portion of the total income generated by the investment is expended to provide, in total, seven percent of RISD’s annual operating budget.
The spending policy provides for an annual distribution of a set percent of each endowment’s 12-quarter rolling average market value as calculated on December 31. This formula reduces the volatility of an endowment’s spending from year to year and minimizes the negative effects of moderate market downturns. The annual distribution is 5 percent.
How are endowment funds used?
Donors may give restricted or unrestricted gifts to the endowment. Restricted gifts are used exclusively for one defined purpose. For example, the income from a restricted endowment for a scholarship is used exclusively to fund that scholarship. Unrestricted gifts to the endowment increase the endowment’s principal and annual payout, and income from unrestricted funds may be used for a variety of institutional needs.
What is the difference between a restricted endowment and an unrestricted endowment?
Donors may give restricted or unrestricted gifts to the endowment. Restricted gifts are used exclusively for one defined purpose. For example, the income from a restricted endowment for a scholarship is used exclusively to fund that scholarship. Unrestricted gifts to the endowment increase the endowment’s principal and annual payout, and income from unrestricted funds may be used for a variety of institutional needs as determined by the president and administration.
What does RISD spend each year from the endowment?
The base spending rate for the endowment is 5 percent.
Endowment spending is computed as the trailing 12-quarter average market value as of 12/31 of the current year multiplied by the spending rate. The base endowment spending computation will be done separately for each endowment fund.
If the market value of an individual donor-restricted endowment fund within the overall endowment falls below the historical gift value, the fund is considered “underwater.” Underwater endowments will not be drawn from unless a special exception is made by the Board of Trustees Finance Committee in accordance with Rhode Island Uniform Prudent Management of Institutional Funds Act (UPMIFA).
If a 5 percent spending rate would reduce the value of any individual donor-restricted endowment fund below its historical gift value, causing it to become an underwater fund, spending will occur up to the point of its historical gift value.
What is RISD's investment philosophy?
The primary investment objective for RISD’s endowment is to earn a long-term rate of return after inflation, with appropriate risk and liquidity levels to support the institution’s operating needs while preserving capital for the benefit of future generations. To achieve this objective, GEM aligns its investment management with RISD’s core values and long-term objectives, including:
Social Equity & Inclusion
Like RISD, GEM is committed to advancing principles of social equity and inclusion, both in its own corporate make-up and by allocating capital to diverse investment managers. In 2020, GEM appointed its first Director of Diversity and Inclusion to support and enhance the incorporation of diversity, equity and inclusion practices across their firm and in the investment portfolio.
Sustainability & Society
As part of the institution’s commitment to a sustainable planet, RISD’s endowment is invested using GEM’s Green Policy, an approach that excludes strategies dedicated to the exploration, production and extraction of fossil fuels. The policy was developed by GEM in partnership with RISD. Further, RISD’s investment portfolio participates in the broad transition to sustainable, non-traditional energy sources. It includes investments in the largest battery storage project in the world, a sustainable agriculture fund and a credit fund that invests in renewable and sustainable infrastructure projects.
Supporting Small Businesses
GEM believes that investing in small businesses provides the best opportunity for investment growth. This approach also enables new, innovative ideas to develop into the solutions of the future. The firm tends to prefer small- and mid-sized businesses over larger ones. Additionally, RISD’s investment portfolio tilts towards smaller public companies.
As part of its investment decision-making process, GEM considers environmental, social and corporate governance (ESG) factors in an effort to drive positive change for institutions’ stakeholders and communities, and maintains or improves investment performance by tying environmental and social factors to financial outcomes. Institutional investors are finding that a smart approach to considering ESG factors can help reduce risk, avoid losses, uncover opportunities for strong performance and improve overall financial returns.
When will my endowment fund begin to yield spendable income?
A new endowment fund is invested for a minimum of 12 months, and then it yields spendable income.
The full value spending of a new endowed fund occurs four years after the gift is received. This is because spending from new endowment funds is based on the average market value over the previous 12 quarters multiplied by the spending rate.
Can I direct RISD to spend more than the calculated distribution of my endowment fund each year?
All endowed funds within the RISD endowment have the same base spending rate, so no more than the annually calculated percentage of any individual fund’s income may be spent in a given year. The central purpose of an endowment is to provide long-term stability and create the potential for growth. Maintaining a fixed annual expenditure allows for a healthy payout while enabling the principal to grow and produce more income over time. This policy guarantees intergenerational equity.
Can I choose the recipient of my scholarship or fellowship fund?
Scholarship and fellowship recipients are selected by RISD’s Student Financial Services office in partnership with academic departments. In creating gift agreements in concert with Institutional Advancement, donors may specify that their scholarship or fellowship is designated for students who hail from certain geographic areas, intend to study specific subjects, or meet other criteria. Donors are informed about the recipient(s) of their funds, but are not involved in the selection process.
What is the principal of an endowed fund?
The principal of an endowed fund is the amount of money that is maintained and managed in perpetuity to generate earnings that support RISD priorities. The principal itself may appreciate in value over time, and generate more income that is used for the fund’s purpose.
For example, an endowed fund that is established with a $1 million gift maintains a $1 million principal. After four years, the income generated from the principal will be 5 percent, or $50,000 in spendable income per year. In certain conditions, such as an endowment earning 6 percent per year for four years, a fund that is established with $1 million may grow to have a principal value of $1,126,795 after four years.
Can RISD spend the endowment principal in the event of an emergency?
Unlike a bank account, whose funds can be accessed and spent as long as funds are available, an endowment must be maintained in perpetuity and is largely restricted. RISD therefore does not have the ability to spend down the principal of its endowment. In addition, maintaining the principal and its ability to yield income over the long term is necessary for intergenerational equity.
What is a spending base?
A spending base is 85 percent of a fund’s market value, and is used to determine how much the endowment will pay out. For example, if a fund’s market value is $1.5 million, its spending base is 85 percent of that or $1.275 million. The endowment will pay out 5 percent of the $1.275 million spending base: $63,750.
What is an “underwater” fund?
If the market value of an individual donor-restricted endowment fund within the overall endowment falls below the historical gift value, the fund is considered “underwater.” Underwater endowments will not be drawn from unless a special exception is made by the Board of Trustees Finance Committee in accordance with Rhode Island Uniform Prudent Management of Institutional Funds Act (UPMIFA).
Supporting RISD
RISD students dream about finding a creative home long before they arrive on campus.
The impact of our world-class faculty reaches from the classroom to every aspect of business, industry and culture.
Campus spaces are an inseparable part of the creativity and energy of life at RISD.