§130aa–3 Withdrawals and expenditures

Summary

The University can use earnings from its endowment to pay for its normal costs, like upkeep, staff pay, building work, student and community programs, technical help, and research. It cannot use endowment income or the principal (the original fund amount, called the corpus) to support its top executives or to start any commercial business begun after January 1, 1981. Normally, the University must not take out more than 50 percent of the total endowment income earned up to the time of withdrawal. The Secretary can allow the University to withdraw more than 50 percent if there is a serious need, such as a financial emergency (for example, possible insolvency or a short-term cash problem), a life‑threatening natural disaster or arson, or another urgent unusual event. If the University spends more than allowed, it must repay the Secretary 50 percent of the excess. If the University spends any of the principal (corpus), it must repay 50 percent of that amount plus any income earned on it.