The endowment

When speaking of the College's wealth, most people are referring to the endowment, which is a mixture of property and securities assets, and is managed separately from the day-to-day finances.

The endowment supports the College by providing an annual payment - known as the distribution - which is targeted at 3 per cent of the endowment value, with remaining investment returns devoted to maintaining the endowment's purchasing power.

As we have a responsibility, not only to current students and Fellows, but also to future generations, we must balance the need for a reliable annual income today with the need to ensure that the purchasing power of the endowment is not eroded over time.

More than 40 per cent of the College's expenditure is on the salaries of Fellows and staff, which in the long term tend to rise at a rate about inflation. When thinking about the College's purchasing power, St John's therefore applies the notion of 'College inflation', which is set at RPI+1%. The endowment is growing, but more importantly it is also maintaining its purchasing power. However, much of the growth since 2008/9 has come from increases in UK property values and global stock markets and is therefore vulnerable to market corrections.

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