Each endowment account retains its own identity but is commingled with other accounts to ensure prudent and efficient investment management. The Horry-Georgetown Technical College Foundation, on behalf of the College, holds endowed gifts in perpetuity, investing the principal and using a portion of the annual return on investment to fund the designated purpose(s). The remaining return on investment is added to the endowment principal as a hedge against inflation. This practice ensures a consistent level of income to support the designated scholarship(s) or program(s), while maintaining or increasing the real value of the endowment base.
The College administration, in conjunction with the HGTC Foundation, adheres to a policy that limits spending from unrestricted endowed funds to a percentage of that fund's market value. We have identified a spending rate not to exceed 5% of the endowment's market value over a three-year rolling average. In order to allow income to accrue, the funds must have been deposited with the Foundation one full year in advance of the payout date of June 30th. The HGTC Foundation Investment Committee, in conjunction with the Foundation's endowment manager, monitors investment returns.
Management of the endowment attempts to balance two sometimes conflicting objectives. First, the portion of investment return that is retained in the principal should at least equal the rate of inflation. Second, the portion of funds available for distribution must be sufficient to meet the needs of the endowed programs. Within acceptable risk levels, the task is to maximize the difference between inflation and the endowment's total return so that as much income as possible is available for program support. Through prudent management, the endowment will grow significantly over time.
| Year | Principal | 10% Annual Return |
5% Available to Spend |
Cumulative Paid |
Additions to Principal |
| 1 | $1,000,000 | $100,000 | $50,000 | $50,000 | $50,000 |
| 2 | $1,050,000 | $105,000 | $52,500 | $102,500 | $52,500 |
| 3 | $1,102,000 | $110,250 | $55,125 | $157,625 | $55,125 |
| 4 | $1,157,625 | $115,763 | $57,881 | $215,506 | $57,881 |
| 5 | $1,215,506 | $121,551 | $60,775 | $276,282 | $60,775 |
| 10 | $1,551,328 | $155,133 | $77,566 | $628,895 | $77,566 |
| 15 | $1,979,932 | $197,993 | $98,997 | $1,078,928 | $98,997 |
| 25 | $3,225,100 | $322,510 | $161,255 | $2,386,355 | $161,255 |
| 50 | $10,921,333 | $1,092,133 | $546,067 | $10,467,400 | $546,067 |
| 100 | $125,239,293 | $12,523,929 | $6,261,965 | $130,501,258 | $6,261,965 |
| Total | $130,501,258 | $130,501,258 | |||