What is Georgetown’s policy on making payouts of income from “underwater” funds?
When a fund’s current market value has declined below the amount of its principal, or the amount originally invested, the fund is referred to as “underwater.” While an individual fund may be underwater, the Georgetown endowment as a whole is not. Georgetown through UPMIFA (see below) has the ability to determine fund by fund whether payout on individual funds will be made. Gains or loss on the endowment are shared equally on a unit basis throughout the pooled endowment. Because of the large number of units, the risk of loss to individual funds as a whole is minimal. The strength of the pooled endowment enables the university to support its mission and satisfy donor intent by paying out income to programs financed by the endowment, even if individual funds are underwater. The university investment office and members of the Board subcommittee on investments continually evaluate the long-term health of the endowment in response to market performance in order to protect the purchasing powe
