Endowment Growth Calculator

The Endowment Growth Calculator estimates the future value of an endowment fund over time. It accounts for the compound growth of investments while factoring in regular contributions and withdrawals. Organizations such as universities, hospitals, and nonprofits use this tool to forecast fund sustainability and to plan distributions.

This calculator fits into the Finance and Investment Planning Calculators category.

Formula of Endowment Growth Calculator

Ending Value = Beginning Value × (1 + Rate of Return)ⁿ + Contributions − Withdrawals

Detailed Breakdown:

• Beginning Value
  The initial fund value at the start of the period.
• Rate of Return
  The average annual investment return, expressed as a decimal (e.g., 7% = 0.07).
• n (Number of Years)
  The number of years the fund is held or invested.
• Contributions
  The amount of money added to the fund over the period (e.g., annual donations).
• Withdrawals
  Money taken from the endowment (e.g., spending for operational support).

This formula gives the net projected value by compounding the growth and adjusting for cash flow in and out.

Common Lookup Table

Here’s a table that helps estimate growth for a starting endowment of $100,000 at different rates and years, without detailed calculations:

These values exclude contributions or withdrawals for simplicity.

Example of Endowment Growth Calculator

Let’s say an endowment starts at $500,000, earns a 6% annual return, lasts 10 years, receives $10,000 each year, and distributes $8,000 annually.

Apply the formula:
Ending Value = 500,000 × (1 + 0.06)¹⁰ + (10,000 × 10) − (8,000 × 10)
Ending Value = 500,000 × 1.79085 + 100,000 − 80,000 ≈ 895,425 + 100,000 − 80,000 = 915,425

So, the fund will grow to approximately $915,425 in 10 years.

Most Common FAQs