I know that the University is in the middle of a capital campaign and has raised $3 Billion of the targeted $4.5 Billion. I also know that the University Endowment is around $7.5 Billion.
Does anybody know how these two numbers relate to each other? Will the amount raised in the capital campaign increase the endowment by the same amount? If so is the capital campaign amount added to the endowmnet after the whole amount has been raised, or are they already counting some portion of the current capital campaign number in the Endowment as well as displaying it as part of the Capital Campaign number? or are these numbers totally different?
Without having studied any of the financial statements or capital campaign literature, I know that the capital campaign and endowment numbers are not going to match up easily for the following reasons:
First, the University borrowed significant sums for its recent construction binge. That was probably a smart move – interest rates were at historic lows, equity investment returns were pretty good, and until a few years ago there was tremendous excess capacity in the construction industry. A big chunk of capital campaign money will be used to retire that debt. I don’t think the debt was ever set off against endowment numbers, so repaying debt will not increase the reported endowment.
Second – but it’s really the same thing – “endowment” only includes investment assets whose cash income and capital appreciation support the University’s operations. Amounts spent on things like buildings, equipment, and library books are not considered part of the endowment (although certainly they are a huge part of the actual wealth of the University). The capital campaign includes a bunch of capital projects to which funds are being dedicated, and the only portion that will wind up in endowment will be reserves for maintenance, etc., of new buildings and equipment.
I’m sure a portion of the capital campaign money is also earmarked for endowment increase, but I don’t know how much of it.