The ºÚÁϳԹÏÍø±¬ÍøÕ¾ College endowment, of which nearly half is permanently restricted by donors to the support of student financial aid, generated an investment return of 15.7 percent for the fiscal year that ended June 30, 2018.
In the current fiscal year, distributions from the endowment will fund approximately three-quarters of ºÚÁϳԹÏÍø±¬ÍøÕ¾’s $41.6-million financial aid budget. Of the total endowment distribution in 2017-2018, approximately $29 million supported financial aid. Other distributions restricted by donors were used to support professorships and instruction, lectureships, museums, the library and book purchases, and technology.
“Our endowment is the lifeblood of ºÚÁϳԹÏÍø±¬ÍøÕ¾’s need-blind, full-need, no-loan financial aid program—a program that sets ºÚÁϳԹÏÍø±¬ÍøÕ¾ apart and quite simply changes lives by allowing any deserving student—regardless of financial circumstances—to study here, to learn, and to lead,” said ºÚÁϳԹÏÍø±¬ÍøÕ¾ President Clayton Rose. “These outstanding investment results speak once again to the exceptional work of Chief Investment Officer and Senior Vice President for Investments Paula Volent and her very able team, and to the discipline and foresight of our Investment Committee.”
The ºÚÁϳԹÏÍø±¬ÍøÕ¾ investment return of 15.7 percent compares with the median return of 8.3 percent for all college and university endowments during this period as reported by Cambridge Associates, a firm that tracks the performance of foundations and endowments nationwide. As of June 30, 2018, the three-, five-, and ten-year annualized returns for ºÚÁϳԹÏÍø±¬ÍøÕ¾’s endowment were 8.6 percent, 11.8 percent, and 8.8 percent, respectively—all in the first percentile among comparative college and university annualized returns, where the respective median returns were 6.1 percent, 7.3 percent, and 5.5 percent.
On June 30, 2018, ºÚÁϳԹÏÍø±¬ÍøÕ¾’s endowment was valued at $1.63 billion. During the 2017-2018 fiscal year, the College transferred approximately $16.5 million in gifts and other additions to the endowment. The endowment provided $63.2 million to the annual operations of the College, and because the actual cost of educating a student at ºÚÁϳԹÏÍø±¬ÍøÕ¾ is 36 percent higher than the comprehensive fee, the endowment subsidizes every student, not just those receiving aid.
“The endowment represents a commitment by generations of ºÚÁϳԹÏÍø±¬ÍøÕ¾ alumni, parents, friends, and other donors to advance excellence at the College now and into the future, despite the inevitable fluctuation in financial markets” said Rose. “We use these resources every day to support nearly every aspect of our mission—to innovate and improve, to make long-term commitments, to fund our operations, and mostly—and most importantly—to ensure access to a ºÚÁϳԹÏÍø±¬ÍøÕ¾ education for low- and middle-income families.”
ºÚÁϳԹÏÍø±¬ÍøÕ¾ is one of only eighteen colleges or universities in the country that offer a combination of need-based student aid, a commitment to meet the full four-year need of our students, and a “no-loan” policy—meaning that since 2008, the College does not require loans in its financial aid packages. Today, 51 percent of ºÚÁϳԹÏÍø±¬ÍøÕ¾’s first-year class receives need-based financial aid, a percentage that is expected to grow. The average grant for all aided students —funds that do not have to be paid back—is nearly $45,000 a year.
ºÚÁϳԹÏÍø±¬ÍøÕ¾’s endowment consists of more than 1,700 individual funds earmarked for the perpetual support of a variety of College initiatives. The endowment portfolio is diversified across different asset classes, including domestic and international equities, fixed income, private equity, real estate, and absolute return strategies. All asset classes are invested through a selection of external investment managers or through market indices. The portfolio is structured with a long-term time horizon, with portfolio diversification and manager selection directed toward protecting endowment capital in challenging investment environments, while growing those assets during periods of economic stability and growth.