1. What is the graduate fellowships matching program? A critical component of The Campaign for Berkeley, this matching fund program seeks to encourage endowment gifts for graduate fellowships in every discipline on campus. The program offers a multiyear, dollar-for-dollar match for a portion of the endowment payout for each new fund established.
Endowments created through this program will increase significantly the level of funding currently available for graduate education at Berkeley. As a result, the University will be able to offer more-competitive fellowship funding packages — equal to those offered by our private peers — and to recruit a higher number of the most talented-students. The new endowments will also create a more stable, predictable source of graduate student support that is not subject to fluctuations in the state budget or federal research funding.
2. How does the graduate fellowships matching program work? The new endowments will generate payout (the amount distributed for spending) that will be partially used for student awards and partially reinvested in the endowment principal. The portion of the payout that supports the students will be matched dollar for dollar by the University using its current graduate support funds. This type of matching will enable Berkeley’s graduate programs to put the new endowments to immediate use and to make fellowship awards that are much more competitive than those they currently offer. At the same time, the matching funds will permit a portion of the payout to be reinvested into the endowment principal to accelerate its growth. Matching of the endowment payout will continue until the endowment principal has become sufficient to generate a sustained payout that can fully fund competitive student awards.
3. What amount will be matched as part of this program? The payout from each donor’s gift will receive a dollar-for-dollar match equal to one-half of the award supported by the endowment. For example, the cost of a nine-month fellowship award for a California resident student in the 2007–08 academic year is $30,000. An endowment for such a fellowship will receive a match equal to one-half of the award paid to the student — in this case $15,000. Because the cost of education at Berkeley increases each year, the amount of payout used for a student award — and the corresponding amount of matching funds — will be adjusted upwards in subsequent years to ensure that the award covers full fees and living expenses for nine months and continues to be competitive. The remaining portion of the payout, in this case $7,500, will go back into the endowment and will help to accelerate its growth. This example is illustrated in the table on the next page, which assumes a 4.5% endowment payout, 8.5% growth, and 3% fellowship cost increase.
4. How long will the matching funds continue? The matching funds will continue for a number of years until the endowment principal is sufficient to fully support a competitive award on an ongoing basis. The exact amount of time required will depend on the investment performance of the endowment, as well as the rate of growth of student fees, tuition, and stipends.
5. Why are four giving opportunities featured in this program? The four giving opportunities represent the four components of a comprehensive fellowship funding package. Such a funding package for a California resident student includes a graduate fellowship (for the nine-month academic year) and summer support. For exceptional applicants, it may also include an excellence award. A funding package for a first-year out-of-state or international student includes a graduate fellowship, nonresident tuition, summer support, and in some cases, an excellence award. As part of the matching program, donors can choose to support one or more elements of such a funding package, depending on their interests.
6. Can endowments created through this program be funded through pledges or non-cash gifts? Yes, donors may choose to establish their endowments through five-year pledges. For example, a donor wishing to create a named graduate fellowship may fund his or her endowment through five gifts of $100,000. Matched funding will start once the pledge is fulfilled.
There are many ways to fulfill pledges including gifts of appreciated stock or real estate. Campus development officers, in partnership with the Office of Gift Planning, can assist donors who are interested in learning more about funding their pledges with assets.
7. Can gifts be restricted to specific departments or graduate programs? Yes, donors may designate their gifts to benefit students in a specific program, such as the Department of Physics or the Graduate Program in Folklore. They may also name a group of programs, such as the Division of Biological Sciences in the College of Letters & Science.
In addition, graduate support endowments may be established to benefit the most meritorious students in any graduate program, identified through the campuswide Graduate Fellowships Competition. In this competition, a faculty committee selects several hundred doctoral students annually from among tens of thousands of applicants to receive Berkeley’s most prestigious multiyear graduate fellowships.
8. How does a graduate fellowship gift made during the Campaign impact the University? The donor’s gift establishes a fully funded award in perpetuity, directed toward students in the program of the donor’s choice. During the match period, the donor’s gift immediately increases the funding to the program it supports, and also directs the matching funds to the type of award the donor chooses. By helping the University to recruit the most- talented graduate applicants, all fellowship gifts strengthen Berkeley’s ability to provide an unparalleled research and learning environment for all Cal students.