Like many other higher education institutions, Edinburgh has an Endowment Fund. This fund has been built up from thousands of monetary gifts and other donations, given to the University by alumni and other philanthropic donors.
The University of Edinburgh itself was founded as an institution thanks to an endowed gift. The many other donations since then have been given to us because donors recognise that their financial support helps accelerate our aim to make the world a better place, achieved through supporting innovative ideas in research and education.
Restrictions
In most cases, endowed gifts are restricted in nature. This means we have a responsibility to use any funds aligned to the terms in which we received them, as specified by the donor. This could be on educational activities, such as student scholarships, or on specific areas of research.
Donors often want their gifts to impact not just their generation, but future generations of students and staff. To fulfil these wishes, the fund has to last indefinitely, and we need to invest in ways that earn income over the long-term.
That is the only way in which we can continue to keep funding activities as specified by our donors.
Different purposes
As the custodians of the funds gifted by our donors, the pool of money that makes up our Endowment Fund, its investment and its use, is set apart from other income we generate.
Income from our daily operations, such as from tuition fees, is not invested in the Endowment Fund.
Tuition fees account for close to 40% of the University’s total income and this money is what we use to run our lectures, support students, pay our staff, and maintain our buildings.
We do still need to generate a surplus, but that is so we have funds available to invest in our buildings, equipment, infrastructure, people and students, all with the aim that we stay a world-class global educational institution.
The Endowment Fund is different. It is a permanent legacy gift. Its restricted nature means that the majority of these funds cannot be spent on daily operations. Instead, we invest the funds to generate sustainable returns so we can continue to make a positive impact on the world in alignment with our donors’ wishes.
Spending money from the fund
Over the past two years, our Endowment Fund has distributed more than £10m in scholarships. Other funding has helped pay for staff conducting world-leading research, such as in the Centre for Inflammation Research.
Supported scholarships include the Darlington Scholarship, set up following a generous legacy donation made by alumna Joyce Blow Darlington. The scholarship is designed specifically to remove the financial barriers that can prevent many undergraduate students from the lowest income backgrounds from progressing to postgraduate study.
Another example is Mary Dick – the sister of the Royal (Dick) School of Veterinary Studies’ founder William Dick – who played a central role in the establishment of what is now affectionately known as the ‘Dick Vet’.
Following her death, in 1905, a benefaction out of her estate established the ‘Mary Dick Chair in Physiology’. The professorship remains a lasting part of her legacy, with each holder continuing to support teaching, learning and research for students and the wider scientific community to this day.
Institute for Regeneration and Repair (pictured)
Donors continue to demonstrate their trust and belief in the University’s work. We receive new endowed gifts every year, all designed to support our students, teachers and researchers in new ways, aligned to the needs of current students, and aimed to address society’s most pressing challenges.
Take a look at some of the ways our Endowment fund has made a positive impact:
Changing lives decades from now
At its core, investing our Endowment is not just about growing numbers on a spreadsheet. It is about actively extending the lifespan of the gifts we have received so they have the greatest long-term impact.
As the stewards of our Endowment Fund, we stand between generations. We have a responsibility to honour the wishes of those whose gifts built the fund and we also need to protect its purchasing power for the students and researchers of 2030 and beyond.
We do not own this capital, we are just its temporary guardians.
As a charity, we want to maximise returns so that we are in a position to deliver the greatest impact on behalf of our donors. But maximising return is not an end in itself, and we have a further responsibility to ensure we act as a responsible investor.
So, how do we balance managing and protecting these funds and at the same time, being a responsible investor ensuring our investment approach aligns to the University’s broader values?
Investing our Endowment Fund
Views vary, within and beyond the University, on what we should invest in. Inside and outside the Institution, people want to understand where our money goes and if it aligns with our values.
Decisions on the companies and sectors we invest in must uphold our duties as a charity, as well as our values and commitments as an educational and civic institution. This includes a clear commitment to promoting, protecting and respecting human rights in our approach to investment.
Responsible investment at the forefront of decision-making
We have not waited for others to set the standard.
Since 2003, the University has had a Responsible Investment Policy. This policy is intended to ensure that our investments uphold our values and our continuing commitments to social and civic responsibility.
In 2013, we also became the first university in Europe to sign the UN-supported Principles for Responsible Investment (PRI), the world’s leading proponent of responsible investment.
We regularly report on our performance to the PRI, and publish information publicly about our investments, fund managers and decarbonisation progress.
As our Endowment Fund is invested across a wide range of asset classes and companies globally, we work with investment managers to help invest our assets. These independent fund managers must adhere to our strict ethical standards and we require them to actively engage with the companies they invest in, including influencing them to align to our values.
Our policy arrangements are reported to and assessed by the United Nations and other bodies, where they consistently achieve high PRI scores.
Investing exclusions
Our policy explicitly excludes investments in sectors that cause unacceptable harm. The three exclusions are fossil fuels, tobacco, and controversial armaments.
Controversial armaments are defined by methodology from Sustainalytics, a leading environmental, social, and governance research and ratings provider. This definition includes landmines, biological and chemical weapons, cluster bombs, depleted uranium ammunition, nuclear weapons and white phosphorus weapons.
Excluding these industries can also protect funds from losses in the long term. For example, divesting from fossil fuels reduces the risk of losing investments as economies increasingly move towards more renewable energy sources.
Investing in an interconnected world
Today’s volatile markets mean we are facing more difficult choices and challenges. Our investments cannot just weather challenging periods. They need to be curated to ensure resilience and value for years to come.
This means they need to be diversified across a range of funds and sectors balancing risk of potential losses against growth, and they need to adapt in alignment with our values and those of the world around us.
The reality of global investment markets also mean that our Endowment Fund investments will likely span across the world, and across many industries and sectors.
Take for example the huge advancements Artificial Intelligence (AI) has seen over the last few years. This technology is becoming increasingly embedded in many industries and sectors, including IT, media, medical research and defence.
This is forcing us to ask hard questions about how we invest our Endowment Fund: where do we draw the line on dual-use technologies and how do we define ‘armaments’ in the digital age?
We do not yet have easy answers to these questions but we are committed to exploring these issues further, in terms of our investment, but also in considering what research we should engage in.
Our policy review
In 2024, the University launched a major review of its Responsible Investment Policy. The review enabled us to hear directly from students, staff and other key stakeholders about the current policy, and areas they would like us to consider further.
An updated policy was published in 2025, which includes commitments to decarbonise the University’s investment portfolio in line with its net zero targets and to incorporate a social investment approach into its Endowment and Investment Fund.
The University already has an £8 million Social Investment Fund and this continues to support socially positive outcomes for people in Edinburgh, Scotland and across the UK. One example is our investment in a fund, working in partnership with Simon Community Scotland, to provide homes for people in Edinburgh who would otherwise be homeless.
The policy also includes a commitment to ‘active ownership’, an approach that encourages investors to engage with companies they invest in, using their leverage as shareholders to influence decision-making.
A Responsible Investment Advisory Group has also been established, made up of staff alongside student representatives and independent and external experts in sustainable and responsible investing.
This group is now informing the University’s future approach to responsible investment, carefully considering the diverse perspectives and concerns of our community.
Looking into the future
We continue to thoughtfully and considerately balance our approach. We must grow the endowment to honour our donors’ wish for perpetual support, while ensuring our investments reflect our commitments and values.
Maintaining our commitments to responsible investment in what is an increasingly volatile global landscape will require ongoing assessment and evolution of our Responsible Investment Policy. It will also need to be grounded in continued engagement with our community.
As part of its work to date, Responsible Investment Advisory Group is now finalising a formal representations process. This will provide staff and students with a transparent way to share their views on our investments. Evidenced-based assessments of those representations will be considered, while also ensuring any decision means we can continue to successfully grow our Endowment Fund for future generations to come.
We will share more about these plans in this academic year.
