Endowments: Who got hit the worst?

College Search & Selection
1

<p>Below is some of the data from the latest NACUBO Endowment Study. This one covered the period ending 6/30/09 with the greatest focus on how the various endowments changed from 6/30/08 to 6/30/09, ie, in the period heavily impacted by the global financial crisis.</p>

<p>Important Note: This is NOT a reflection of the investment results which in many cases was likely worse than these numbers. These numbers are the net change in value from 6/30/08 to 6/30/09, making allowances for:</p>

<ol>
<li> Changes in value of endowment assets</li>
<li> Growth from gifts</li>
<li> Reductions due to expenditures and withdrawals</li>
</ol>

<p>It should also be noted that no allowance is provided for colleges that increased their debt burden during this period to meet various capital needs.</p>

<p>Added Notes:
a) I have posted the UC schools separately as historically their individual school data was different from what NACUBO has presented.<br>
b) I'm not sure about the U Texas and the Texas A&M data.<br>
c) I believe that the U Wisconsin and other schools with multiple sources are not being fully reflected by NACUBO.<br>
d) I don't have any data on MIT, George Washington, BYU, and Virginia Tech or a few of the UCs. </p>

<p>If anyone has any data on the above notes, please post it…. </p>

<p>08-09 Change in Endowment , School (publics in CAPS)</p>

<p>-3.8% , Pepperdine
-12.6% , Washington & Lee
-14.7% , WILLIAM & MARY
-14.8% , RUTGERS
-15.4% , New York University
-15.8% , UC IRVINE
-16.0% , PURDUE
-16.6% , Georgetown
-16.8% , U Penn
-16.8% , U Richmond
-17.2% , Bowdoin
-17.8% , Boston College
-17.9% , Macalester
-18.1% , U IOWA
-18.3% , MICHIGAN ST
-18.7% , Colorado College
-18.9% , Vanderbilt
-19.0% , U N CAROLINA
-19.2% , U FLORIDA
-19.7% , Smith
-19.8% , Columbia
-19.9% , Kenyon
-20.1% , Swarthmore
-20.1% , Carleton
-20.2% , Bucknell
-20.3% , Colgate
-20.4% , OHIO STATE
-20.6% , Case Western
-20.7% , U MICHIGAN
-20.7% , PENN STATE
-20.7% , U MINNESOTA
-20.7% , INDIANA U
-20.7% , Holy Cross
-20.7% , Furman
-20.9% , Emory
-20.9% , U WISCONSIN
-21.0% , Middlebury
-21.3% , U PITTSBURGH
-21.4% , Lehigh
-21.4% , CLEMSON
-21.4% , Wellesley
-21.4% , Bryn Mawr
-21.4% , Sewanee
-21.5% , Lafayette
-21.6% , Rice
-21.6% , Brandeis
-21.6% , Scripps
-21.7% , Johns Hopkins
-21.8% , Occidental
-22.0% , Harvey Mudd
-22.1% , Boston University
-22.1% , Williams
-22.1% , Barnard
-22.4% , U CONNECTICUT
-22.4% , Vassar
-22.4% , Whitman
-22.7% , U VIRGINIA
-22.8% , Princeton
-22.8% , Dartmouth
-22.8% , Wake Forest
-22.8% , Rensselaer
-22.8% , Trinity
-23.0% , Notre Dame
-23.0% , U GEORGIA
-23.2% , U Chicago
-23.4% , Amherst
-23.7% , Wash U
-23.7% , Tufts
-23.7% , U WASHINGTON
-23.7% , TEXAS A&M
-23.8% , Tulane
-24.0% , U Rochester
-24.0% , Fordham
-24.2% , Worcester
-24.3% , Claremont McK
-24.5% , Colby
-24.5% , Mt. Holyoke
-24.8% , Northwestern
-24.8% , U TEXAS
-24.8% , U DELAWARE
-25.6% , U of Southern California
-25.7% , Pomona
-25.9% , GEORGIA TECH
-26.1% , Caltech
-26.3% , Southern Methodist U
-26.4% , Cornell
-26.4% , U ILLINOIS
-26.4% , Davidson
-26.6% , Brown
-26.7% , Stanford
-26.8% , U Miami
-26.9% , Wesleyan
-26.9% , Grinnell
-27.1% , Hamilton
-27.2% , Yeshiva
-27.5% , Duke
-27.7% , Oberlin
-27.9% , U MARYLAND
-28.6% , Yale
-29.4% , Carnegie Mellon
-29.8% , Harvard
-31.2% , Bates
-33.2% , Syracuse
-35.5% , Haverford</p>

<p>na , MIT
na , UC S BARBARA
na , George Washington
na , BYU
na , UC S CRUZ
na , VIRGINIA TECH</p>

<p>-12.6% , UC DAVIS
-15.1% , UCLA
-20.6% , UC BERKELEY
-20.7% , UC SAN DIEGO</p>

2

<p>Keep in mind that the market has changed significantly from this time period of 6/2009.</p>

<p>And more importantly. Some schools that were really well endowed can afford to take a much larger hit than others. </p>

<p>For example: A school like Grinnell(who is known for having an amazing endowment per capita) can take a bigger hit without it really affecting the quality of education and the amount of money they give out. A school like Pepperdine on the other hand has had to make huge cuts on things and they only lost 3.8% although it’s a comparable sized school.</p>

3

<p>Hawkette, why not post this in the thread already discussing this issue?</p>

<p>As for your figures regarding UCs, the UC system endowment performance was down 20.6%. Individual, UC campus-managed, supplemental foundation performance was slightly different:</p>

<p>UC San Francisco = -6.4%
UC Davis = -12.6%
UCLA = -15.1%
UC Irvine = -15.8%
UC Berkeley = -16.3%
UC San Diego = -20.7%
UC Riverside = -23.1%</p>

4

<p>Again, the numbers above reflect the changes in endowment market value AND the impact of gifts/withdrawals. My belief is that many schools have ongoing capital campaigns that lessen the visibility of their poor investment performance. </p>

<p>Knowing this, if one still persists in making comparisons to an investment benchmark, a simple benchmark might be something like the following:</p>

<p>65% Stocks (represented by the S&P 500 Index)
35% Bonds (represented by the Barclays Aggregate Bond Index)</p>

<p>-14.97% This is how much this benchmark declined from 6/30/08 to 6/30/09 </p>

<p>+13.88% This is how much this benchmark rebounded from 6/30/09 thru 1/28/10. </p>

<p>-3.17% This is the change for this benchmark from 6/30/08 to 1/28/10.</p>

<p>Obviously, the colleges have a wide range of investment approaches and most will use far more complicated collections of assets to measure against, but IMO this simple benchmark isn’t too far off the mark of what an endowment should probably have been doing with its money.</p>

5

<br>

<br>

<p>Wouldn’t that depend on a number of factors? Suppose for instance a school was just about to start an ambitious progam of improvements when the crash hit. I’ve heard of one well-endowed LAC having to postpone plans for a much-needed new science center. One of its peers already had built a new library, environmental science building, student center, etc., before the market peaked (a good thing, maybe – or a bad thing if it left them with heavy debts.)</p>

6

<p>

</p>

<p>Not necessarily. In the short term, the pain may be much greater at some of the well endowed schools. It depends on how heavily the school relies on its endowment relative to other sources of revenue. Other things equal, a school that gets only 10% of its operating budget from endowment payout will see much less impact from a 20% decline in endowment value (10% X 20% = 2% of total operating budget) than a school that gets 50% of its budget from endowment payout (50% X 20% = 10% of total operating budget). It may be that there’s more “fat” to cut at the school with the big endowment, but in any event it’s clear the cuts will need to be deeper. </p>

<p>The endowment isn’t like a “rainy day fund” that you tap when you’re otherwise short of cash. The idea is not to dip into the principal, and instead live off a steady stream of payouts predicated upon the idea that the endowment will grow over time. Typically schools achieve this by taking a fixed percentage (usually 5% or less) of a 3-year (or longer) moving average of endowment value. So a lot will also depend on how the endowment is invested, as different asset classes will recover value (or not) at different rates. Some of the smaller endowments were heavily invested in equities which have already recovered a lot of their value. Some of the biggest endowments were much more heavily invested in non-liquid assets like real estate and timber lands which may take much longer to recover.</p>

7

<p>I do not agree with Post #2 above. Having toured Grinnell College last summer, I was told by faculty that the endowment hit was causing some serious cutbacks at the college. The key is what % of the operating budget comes from endowment funds. Harvard’s percentage was quite high, Northwestern University’s % was/is low, therefore schools like Northwestern can absorb a sudden loss of endowment funds without making drastic cuts while Harvard has had to cut operating expenses immediately. For example, Harvard eliminated hot breakfasts & cut back on garbage pick-up.
Post #2 is correct in asserting that the market has changed considerably since 6/30/09.</p>

8

<p>True. But (despite heavier endowment losses and a higher percentage of operating costs coming from endowment funds), I imagine that currently Harvard still has a higher operating budget than Northwestern because the former’s endowment is just that much bigger.</p>

9

<p>It’s a very good idea for college applicants to know something about the financial status of the schools that they are applying to. The recent downturn in the financial markets is going to cause painful cutbacks everywhere – but some schools will be affected more than others.</p>

<p>Unfortunately, a simple stat like % decline in endowment does not necessarily tell you which schools are hurting the most. Some of the schools on this list with higher % endowment losses are actually in much better financial shape than some of the schools with lower % losses.</p>

<p>For example, this list tells you nothing whatsoever about debt. Some of the schools on this list borrowed heavily during the past decade. Now their assets (endowments) have diminished, but their liabilities (debts) have not. There are schools on this list with relatively low endowment losses that are facing significant issues with debt service. Other schools with comparable (or greater) % endowment losses are financially much healthier, because they don’t have the same debt liabilities. </p>

<p>Another factor is liquidity. Some of the schools on this list have particularly illiquid investments in their endowments. There are schools with nominally high endowments and relatively low losses that are struggling to find ready cash to keep the lights on. </p>

<p>Institutional financial health is something that college applicants should be thinking seriously about. But the % decline in endowment statistic doesn’t capture it, and may in fact be quite misleading.</p>

10

<p>how do we find out about a college’s real financial status then?</p>

11

<p>The following is my first pass at the per capita numbers. I’m not very confident about several of the publics (U Texas, Texas A&M, all of the UCs and U Wisconsin) and a few where I can’t find the data, so if others can post info on the endowment size for each individual campus, then please do so. </p>

<p>Per Capita , School</p>

<p>$1,682,581 , Princeton
$1,426,437 , Yale
$1,334,480 , Harvard
$870,680 , Pomona
$769,560 , Amherst
$757,500 , Swarthmore
$707,121 , Stanford
$689,025 , Williams
$662,185 , Rice
$657,591 , Caltech
$641,389 , Grinnell
$540,289 , Wellesley
$483,053 , Dartmouth
$417,296 , Notre Dame
$416,307 , W&L
$411,383 , U Richmond
$411,278 , U Chicago
$399,526 , Bowdoin
$353,538 , Smith
$339,352 , Emory
$329,795 , Claremont McK
$315,842 , Duke
$305,934 , Wash U
$299,070 , Bryn Mawr
$295,440 , Northwestern
$287,499 , Haverford
$287,333 , Macalester
$285,004 , Middlebury
$275,529 , Vassar
$271,876 , U Penn
$262,747 , Harvey Mudd
$261,120 , Hamilton
$258,655 , Carleton
$254,044 , Columbia
$245,257 , Colby
$243,339 , U TEXAS
$242,487 , Brown
$234,319 , Vanderbilt
$224,847 , Lafayette
$221,448 , Davidson
$218,566 , Scripps
$217,776 , Mt. Holyoke
$203,514 , Whitman
$197,688 , Colorado College
$197,225 , Colgate
$195,632 , Cornell
$192,064 , Oberlin
$168,972 , Holy Cross
$160,885 , UC BERKELEY
$157,553 , Sewanee
$154,925 , Yeshiva
$151,312 , Wesleyan
$150,754 , Occidental
$149,218 , Furman
$146,262 , U MICHIGAN
$142,837 , Case Western
$135,359 , U Rochester
$129,228 , Wake Forest
$126,713 , Lehigh
$124,470 , Trinity
$120,309 , TEXAS A&M
$119,071 , Bucknell
$110,014 , Tufts
$104,846 , Brandeis
$104,182 , U VIRGINIA
$103,518 , Bates
$99,552 , Johns Hopkins
$96,432 , Boston College
$94,424 , SMU
$91,883 , Kenyon
$88,477 , Pepperdine
$81,484 , Rensselaer
$79,160 , USC
$71,242 , Barnard
$68,161 , Carnegie Mellon
$66,688 , U N CAROLINA
$66,658 , U PITTSBURGH
$63,934 , Worcester
$62,697 , WILLIAM & MARY
$57,656 , Georgetown
$50,849 , U DELAWARE
$49,641 , NYU
$48,645 , GEORGIA TECH
$47,445 , Tulane
$39,722 , U WASHINGTON
$37,002 , U MINNESOTA
$36,357 , PURDUE
$35,150 , U Miami
$33,990 , Syracuse
$32,668 , U WISCONSIN
$30,747 , OHIO STATE
$30,394 , INDIANA U
$28,085 , Boston University
$27,609 , PENN STATE
$26,285 , U IOWA
$22,570 , UCLA
$22,512 , Fordham
$22,444 , MICHIGAN ST
$19,633 , U FLORIDA
$19,091 , U ILLINOIS
$18,075 , CLEMSON
$16,453 , U MARYLAND
$15,121 , RUTGERS
$13,343 , U GEORGIA
$10,492 , U CONNECTICUT
$10,220 , UC SAN DIEGO
$7,815 , UC IRVINE
$4,488 , UC DAVIS</p>

<p>Insufficient Info , MIT
Insufficient Info , UC S BARBARA
Insufficient Info , George Washington
Insufficient Info , BYU
Insufficient Info , UC S CRUZ
Insufficient Info , VIRGINIA TECH
Insufficient Info , Bard </p>

<p>Not Relevant , US Military Acad
Not Relevant , US Naval Acad</p>

12

<p>Per capita endowment is a skewed figure. Most endowment funds are heavily or permanently restricted funds and they derive income from the funds which are then available for operating capital, but not the principal funds. </p>

<p>VMI and some others actually had net GAINS as of June 30, 2009, likely because they invested heavily in bonds and stayed away from risky hedge fund investments. The average loss was around 23 percent or so nationwide. BUT…MOST OF THOSE COLLEGES HAVE ALREADY REGAINED A SUBSTANTIAL PERCENTAGE OF THOSE LOSSES as the markets recouped a HUGE percentage of their losses earlier in the 09 year. Indeed, the market bottom was at the end of March. </p>

<p>So this information is of relative value. Next June is really the test of it all to see how much was recouped from the June 09 losses. </p>

<p>Some schools are highly dependent on tuition and some are highly dependent on investment income. </p>

<p>Some schools don’t report to this Association and keep information available only to the Dept of Education, their state reporting agencies and their Boards of Trustees. Transparency is often an issue.</p>

<p>But rest assured if your school was teetering on insolvency, you would know about it by now. Very few face that dilemma.</p>

13

<p>WARF (UW Madison’s private endowment from patents and such) Official name is Wisconsin Alumni Research Foundation. </p>

<p>[Foundation</a> Center - 990 Finder](<a href=“http://dynamodata.fdncenter.org/990s/990search/esearch.php]Foundation”>http://dynamodata.fdncenter.org/990s/990search/esearch.php)</p>

14

<p>Gifford,</p>

<p>Grinnell btw is still going forward with huge projects. In fact they are amidst some huge projects right now and have not flinched from them. I was just there in the last three months. They have also made a very big commitment to putting a cap to moderate tuition increases in order to help students out. That is not to say that no cuts have been made, but far less at a school like that then many of the others that have sometimes taken less of a percentage hit to their endowment. Many of those numbers quoted above have already shifted significantly and these accounts are recovering and will continue to do so. Again a school like Pepperdine or the UC system schools are suffering huge consequences as they have had to make huge cuts, pack classes etc…I live in Cali and can tell you as I hear it from my neighbors kids who go to those schools.</p>

15

<p>Grinnell College is an very wealthy school with impressive facilities. I loved the school, the campus, the facilities & the accepting culture. But when they cut back on the imported caviar at tea time, it’s serious!</p>

16

<p>HA/LOL yes I noticed those cuts too. Hey, at least they have kept the weekly dances going eh?</p>

17

<p>Hawkette, I am not sure how you calculated Texas’, Cal and UVa’s endowments per student, but Cal’s is under $100,000, Texas’ well under $150,000 and UVa’s is over $150,000. </p>

<p>I think you used the University of California endowment of $5 billion fully for Berkeley, but it is shared by the entire UC system. And you did the same thing for Texas. The $12 billion endowment is for the entire UT system, including 9 campuses, 4 major medical schools and centers, close to 200,000 students and 17,000 faculty. Less than half of the system’s endowment is dedicated to UT-Austin.</p>

18

<p>d’smom, Pepperdine’s endowment is 86th in the country at $673,666,000. (6/30/2009) and their investments hadn’t lost much. Why do you say they are hurting?</p>

19

<p>I don’t think Texas’s per student is “well under $150,000”. The reported UT System endowment number of $12B is only the UT System portion of the 2/3 of the Permanent University Fund (PUF) managed by UTIMCO (the A&M System by law has the other 1/3). </p>

<p>UT Austin has its own institutional endowment of ~$2-$3B separate from the system (and not reported by NACUBO for some reason). This confusion explains the disparities in recent years where UT Austin’s endowment has been reported as having the System endowment number or a number as low as $2B. It’s also why A&M is sometimes reported as having a larger number. UT’s “real” endowment number is some portion of the System endowment + Austin’s private endowment funds. In 2008, this was approximately $7B.</p>

<p>Still, as the primary non-medical school flagship of the UT System, UT-Austin can almost do what it wants with the UT System portion of the PUF funds and has the least restrictions on their use. Historically, UT actually had complete ownership of this portion of the PUF and was the 2nd richest university in the world after Harvard. It wasn’t until around the 70s-80s when UT’s portion of the PUF was divided among other UT System schools. Then in the late 90s, Yale pioneered its investment model that enabled it (and schools like Princeton and Stanford) to have meteoric returns and pass the PUF. As a steward of public funds, UTIMCO couldn’t invest the same way Harvard and Yale could. </p>

<p>In recent years, UT-Austin has begun a focused effort to increase its institutional endowment. For its entire history, UT did little to raise its own endowment funds even in the face of diminishing state support and an increasingly smaller contribution % of the PUF funds to its overall budget. It had the PUF handed to it for decades so it didn’t really see the need to do much of its own. So UT was late to the game compared to other top publics in realizing the need to have a strong endowment of its own, but it is definitely making an effort now. UT is in the middle of a $3B capital campaign, which is hugely ambitious for a public university without a medical school. </p>

<p>As a side note - for a fascinating anecdote of the power of the PUF when UT Austin had sole access to the PUF endowment, read the history of the Ransom Humanities Research Center. In roughly a decade in the 1960s, UT built what is widely regarded by scholars as the greatest university library in the United States. (While Harvard and Yale have larger general academic libraries, not even the Houghton or Beneicke match the Ransom Center in terms of rare books, original manuscripts, photography, art, etc.) UT’s chancellor at the time convinced the regents that books and manuscripts were a capital expenditure that could be purchased using PUF funds, opening the floodgates on a buying binge that even resulted in Britain having to change tax laws to reduce the flow of its literary heritage to the United States. Today, the Ransom library collection at UT is appraised at over $1B. </p>

<p>Clearly, the UT System endowment has greatly benefitted UT-Austin regardless of whatever the arbitrary per student number may be.</p>

20

<p>JWT, UT-Austin is obviously very well off. State universities receive a great deal of money from the stata each year, so they do not rely nearly as much on their endowments as do private universities. This said, UT-Austin’s endowment per student is not $250,000, it is closer to $125,000, which is still substantial.</p>