Category: Endowments

The New York Times: The hotly competitive returns of college endowment performance are out, and the results have again shaken the higher education elite down to their Ivy League roots: The smallest endowments — those with total assets under $25 million — outperformed their billion-dollar-plus rivals for the second year … Falling behind by nearly a full percentage point has a huge impact on giant endowments like Harvard’s, which stood at $35.7 billion at the end of the fiscal year … Yale’s total endowment dropped by $200 million, to $25.4 billion.”

“Compare the results with those of Houghton College, a liberal arts institution affiliated with the Wesleyan Church in the Genesee Valley in western New York. Houghton has just over a thousand students and an endowment of $46.4 million. Houghton emerged in the top quartile of all endowments, according to Nacubo, with a return of 11.85 percent for the year ended Sept. 30.”

“How did tiny Houghton do it? The answer is pretty simple: Houghton got out of hedge funds and all alternative investments a year and a half ago, and moved the entire portfolio to a mix of low-cost index funds and mutual funds at the fund giant Vanguard.”

The New York Times: “In the latest annual National Association of College and University Business Officers-Commonfund study of endowment performance, the smallest endowments— those under $25 million — edged out the biggest endowments, averaging a five-year annualized return of 10.6 percent to the $1 billion-plus category’s 10.4 percent.”

“Even more surprising, the top-performing endowments over 10 years among all schools reporting data weren’t giants like Harvard and Stanford or even Yale … the top-performing colleges are two Virginia universities whose financial resources amount to a negligible fraction of the typical Ivy League endowment.”

“Radford University, which ranked first, has an endowment of $55.5 million, and Southern Virginia University, which was second, has an endowment of just $1.1 million. (Taken together, that’s 0.15 percent of Harvard’s endowment, the largest in the country, which is $37.6 billion.)”

“U.S. colleges and universities raised a record $40.31 billion last year, buoyed by megagifts to Stanford University, Harvard University and other wealthy institutions,” The Wall Street Journal reports. “The top 10 fundraising recipients accounted for 18% of gifts in the latest year, or $7.27 billion, up from 17.5% the preceding year and 16.1% a decade earlier, said Ann E. Kaplan, who directs the survey.”

“The richest schools are encouraging an arms race among donors as they seek funds to build sprawling health-care and academic complexes or to launch interdisciplinary programs. Successful alumni donors are eager to preserve their legacies by backing institutes that take on pressing challenges like global poverty and climate change.”

“Stanford led the pack with a record $1.63 billion raised in its fiscal year ended Aug. 31, followed by Harvard, which brought in $1.05 billion in its fiscal year ended June 30.”