<p>Well, one way you could test your theory about growth rates continuing would be to look at year-to-year changes in endowment size as well as the USNWR data on changes in % of alumni giving. If the growth rate of the last five years is the same as the first five years of the 1987-2007 period, then that would be a pretty strong argument (but it sort of reminds me of the projected growth rates for AOL circa 1999). As for % of alumni giving, I don’t normally attach a lot of value to this in the rankings for public universities, but if the U Michigan rate is increasing (17% in latest USNWR poll), then you might be on to something. Do you know how much this has increased in the last 5-10 years? But the culture and history of giving is less strong at publics than at the privates and even more so at the publics outside of the Southeast.</p>
<p>I am not sure of how rapidely Michigan’s endowment grew from 1987-1991. However, over the last 5 years, Michigan has grown at an annualized rate of 17.2%, which is faster than the average annualized rate of growth of 15.9% it has enjoyed from 1987-2007. </p>
<p>And within the last 5 years, Michigan’s endowment has been growing at an accelerated rate. Annualized growth in the last five years was 17.2%, in the last three years was 20.3% and over the last year was a whopping 25.6%.</p>
<p>Although I agree that past trends have little bearing on the future, it would seem that Michigan’s endowment is growing at an accelerated rate. </p>
<p><a href=“http://www.vpcomm.umich.edu/pa/key/pdf/2007endowment_profile.pdf[/url]”>http://www.vpcomm.umich.edu/pa/key/pdf/2007endowment_profile.pdf</a></p>
<p>As for alumni giving rate, it has grown from roughly 13% to 17% in the last 5 years. However, the alumni giving rate is not as telling as how much they give. It is very difficult for a school with half a million alums to get a large chunk of its alums to give back to the school. It is just not possible to reach that many people directly. However, the quality of those donations is improving significantly. I just can’t wait to see how they are going to handle Larry Page! He is currently worth $18 billion and he is barely 35 years old!</p>
<p>Percents schments. It’s all about the Benjamins.<br>
The Big 10 and Pac 10 schools dominate fundraising. .</p>
<ol>
<li>U. of California at Los Angeles</li>
</ol>
<p>$364,779,738</p>
<ol>
<li>U. of Wisconsin at Madison</li>
</ol>
<p>$325,336,779</p>
<ol>
<li>U. of Washington</li>
</ol>
<p>$300,199,601</p>
<ol>
<li>U. of Michigan</li>
</ol>
<p>$293,403,123</p>
<ol>
<li>U. of Minnesota</li>
</ol>
<p>$288,750,059</p>
<ol>
<li>U. of Virginia</li>
</ol>
<p>$282,610,619</p>
<ol>
<li>Indiana U.</li>
</ol>
<p>$278,553,274</p>
<ol>
<li>U. of California at San Francisco</li>
</ol>
<p>$251,945,342</p>
<p>
</p>
<p>He’ll probably make a huge donation to Stanford instead…like they need the money :rolleyes:</p>
<p>The growth has clearly been impressive (though we will see how such an allocation of assets works in the current fiscal year-that will be a big test for all of the highflyers of the past five years), but the more important point you make about giving rates is really the key. There has just not been a culture of giving for most publics and ALL have large alumni bases and ALL have many successful alumni (though few on the scale of Mr. Page). The trick will be to create a development office that can tap into these donors and help offset some of the almost certain future cuts in state funding.</p>
<p>UCB, I am sure he will make a huge donation to Stanford, but he will most likely make a pretty hefty donation to Michigan as well. Remember, people are generally more loyal to their undergraduate institution…or so I hope! hehe!</p>
<p>^ Tell that to fricken Gordon Moore! Funny that Larry Page doesn’t have his PhD from 'furd yet…he’s on leave. I wonder if he’ll go back to finish? They’ll probably just give him an honorary doctorate…after he makes a huge donation. ;)</p>
<p>I really think there will be more realization that the rich schools really don’t need that money as much anymore and they will look elsewhere to donate. Much more impact and glory. The Morgridges have given much more to UW than Stanford.</p>
<p>“There has just not been a culture of giving for most publics and ALL have large alumni bases and ALL have many successful alumni (though few on the scale of Mr. Page).”</p>
<p>True, but on a per capita basis, state school alum bases are not that wealthy. Cal, Michigan, UVa and a couple of others are the exception, primarily thanks to their very strong professional programs and their top ranked academics which somehow sends a huge chunk of their alums to top ranked graduate programs annually. According to a Forbes study back in 1994 (I wish I had kept it handy), Michigan’s alumni were the 4th wealthiest (on a per capita basis) among all universities. </p>
<p>“The trick will be to create a development office that can tap into these donors and help offset some of the almost certain future cuts in state funding.”</p>
<p>I don’t know Hawkette, the state of Michigan is about to approve a 3% increase in funding. I agree that universities have to be financially independent and many state schools are taking the necessary precautions to reach that level, but state and federal funding is not going to just disappear.</p>
<p>At any rate, alumni donations are important, but not as imporant as endowment fund management, which is where Michigan is really doing very well. </p>
<p>It really is very difficult to understand how Michigan managed to grow its endowment the way it has and as we both agree, it is impossible to know if this growth is sustainable. Believe me, I am as skeptical as you. We will just have to wait and see.</p>
<p>Alexandre, what, in your opinion, would be a fair donation to UMich from Mr. Larry Page? I’d say $9 billion would be nice (1/2 of his wealth). He could probably live on the $9 billion he would have left, easily.</p>
<p>Unfortunately, this is just paper wealth right now…nothing some corporate fumbles couldn’t drag down in a hurry.</p>
<p>UCB, $9 billion would be insane! LOL! </p>
<p>But I think using him as the anchor of our next donation initiative the way Ross anchored the last one would be great. Realistically, I think anywhere from $250 million to half a billion would be awesome. Maybe Michigan can sweeten the pot by renaming the CoE the Larry Page College of Engineering! hehe!</p>
<p>Anyway, I have a feeling Michigan is planning a major initiative in the years to come and I would not be surprised if Larry Page were to play a major part in it.</p>
<p>alexandre,
Every state is going to be a little different, but I think it is pretty clear that every statehouse in the Union is under financial pressure. Now that the economy is weakening, this won’t help state revenues anywhere. Couple that with likely higher future tax rates at the federal level and you can see the squeeze. A 3% bump in funding is nothing to write home about and barely keeping up with inflation and would actually lag the increase in cost at most colleges in America.</p>
<p>Re the future of funding, I hear comments that U Virginia is acting as if their funding from the state will go to 0%. I don’t know, but it is currently below 10% and the trend has been down for quite some time now. It’d be nice if someone with a little more knowledge on that school and other publics could provide some insight and details into the projected levels of state funding, but I think few states are painting a rosy picture. </p>
<p>As for rates of return, many top universities have used alternative investment strategies. Best known for this has been Yale and their terrific manager, David Swensen, who was a practicioner of this way before it became popular. This led to a large allocation to private equity and hedge funds and we have just finished probably the five best years that private equity has ever had.</p>
<p>Interesting point from a MSN article on the college endowment race:
[The</a> Richest Colleges - MSN Encarta](<a href=“http://encarta.msn.com/encnet/departments/college/?article=therichestcolleges]The”>http://encarta.msn.com/encnet/departments/college/?article=therichestcolleges)</p>
<p>I wonder what public university it was?</p>
<p>
</p>
<p>Yeah, $9 billion would be excessive…but, it would go a long way for sure to closing the gap.</p>
<p>Berkeley is starting a campaign this year…it’ll be publicly rolled out in the fall:
[The</a> Campaign for Berkeley](<a href=“http://campaign.berkeley.edu/]The”>http://campaign.berkeley.edu/)</p>
<p>Alexandre, maybe Larry Page will donate to Michigan State as well…isn’t his father a professor there?</p>
<p>So what would the numbers look like if you divide the endowment per capita by 20 (because the schools only spend 5% of the endowment per year on average) and add in public money per capita.</p>
<p>The endowment per student would still be overstated because as UCB’s link suggests, a large part of the endowments are not really for students.</p>
<p>Larry Page is too young. I don’t see him giving a lot of money in the near future.</p>
<p>The Univ of Maryland will probably do well some day too.</p>
<p>Hold your tongue! No self-respecting Wolverine will ever donate a cent to MSU. LOL! Seriously, I definitely agree that a university must “spice” things up in order for its alums to donate. The University must give the alum the sensation that her/his money is going to make a difference and explain how that difference will look like.</p>
<p>Good question, dstark. It’s likely that the numbers for the top 10-30 schools would get very close. If Harvard and Stanford actually spend 3-5% of their endowment every year, that’s still a huge number.</p>
<p>Gee…we senior CC members have really digressed from the intention of this poor thread. Good discussion though.</p>
<p>I too think the current top publics need to watch out for UF and U Maryland.</p>
<p>
Hehe!</p>
<p>It’s like someone making a general donation to the University of California. I’d hate for UCLA to get a cent. :p</p>
<p>“I too think the current top publics need to watch out for UF and U Maryland.”</p>
<p>Also the University of Washington</p>