Why Endowments Matter.
Endowments have been much in the news lately, often portrayed in terms of their sheer size, especially at large prominent academic institutions. But what’s frequently missing in public conversations is an explanation of how these funds work, why they exist, and the critical role they play in supporting research, education, and discovery.
At their core, endowments are designed to provide long-term, sustainable financial support. They are not simple cash reserves to be spent down at will. Rather, they are structured, responsibly managed investment vehicles. At the University of Michigan, the financial stewardship of these funds is rigorous: the University calculates distributions using a seven-year rolling average of investment performance, allowing for long-term stability and protection against market volatility. On average, 4.5% of an endowed fund’s market value is distributed each year, ensuring that the impact of a donor’s gift endures far into the future.
Crucially, endowed funds are designated according to the donor’s intent. Whether it’s to support a specific research initiative, a faculty position, a graduate fellowship, or community outreach, each gift carries with it a mission, one that we at the Prechter Program honor with deep gratitude and care.
This model of support is part of a broader, deeply American tradition. The United States is unique in the world with the strength of its philanthropic culture. From our nation’s founding, there has been a strong community spirit of giving, especially in support of education, science, and the public good. Our universities, hospitals, and research institutions have long benefited from this generosity to thrive and innovate!
At the Heinz C. Prechter Bipolar Research Program, philanthropy has been foundational. It was the vision and generosity of the Prechter family that launched this program more than 20 years ago. Since then, a vibrant community of supporters has sustained and expanded our work. These are individuals and families, many of whom have been personally touched by bipolar disorder, who share our conviction that research, combined with compassionate care, can transform lives.
Importantly, while philanthropy, including endowment support, is vital to our mission, the Prechter Program is not solely dependent on donor contributions. Our work is also supported by federal research grants, such as those from the National Institutes of Health, as well as grants from private foundations. This diversified funding model strengthens our ability to advance scientific discovery, innovate in care delivery, and train the next generation of leaders in mental health research.
We are fortunate to be part of a community that understands the value of investing in knowledge, in science, and in the future. Endowments allow us to pursue long-term studies, attract and retain world-class scientists, and adapt to emerging opportunities and challenges in mental health research. But we are equally grateful for the many other forms of support we receive, from annual gifts and planned giving, to participation in studies, volunteerism, and advocacy.
The Prechter Program is more than a research initiative; it is a community effort, one powered by a shared commitment to understanding and improving the lives of people living with bipolar disorder. We deeply value our philanthropic partners, whose foresight and generosity are helping to build a future where science leads the way toward better outcomes for all.
Dr. McInnis is the director of the Prechter Bipolar Research Program;
Thomas B. and Nancy Upjohn Woodworth Professor of Bipolar Disorder and Depression;
Professor of Psychiatry