Higher ed endowments rebound in 2013 in district states

Higher education budget officials got a bit of good news this year as endowments at many universities posted strong gains in assets in 2013, according to an annual report from the National Association of College and University Business Officers (NACUBO) and Commonfund Institute.

Nationwide, assets in 835 endowments tracked by the report grew by 12 percent to almost $450 billion. Assets declined slightly in 2012.

There are 40 higher education endowments of at least $20 million in Ninth District states. In 2013, their combined assets grew by 14 percent to $10 billion. Sixty percent of these endowments benefit private institutions, but they hold of minority (40 percent) of assets. The two biggest, by a considerable margin, support the University of Minnesota ($2.8 billion) and the University of Wisconsin ($2 billion). Both had strong results in 2013, but Minnesota’s assets leapt by more than 21 percent (see Chart 1).

Endowments typically grow by both investment returns and donations, though the NACUBO report does not detail these different asset streams. Growing endowments mean more resources for universities because IRS regulations require that foundations disburse at least 5 percent of assets annually—a minimum of $500 million this year alone from endowments in Ninth District states. This disbursement rule is also one reason some endowments have struggled to return to prerecession levels.

The strong asset increase last year at the University of Minnesota (which, technically, is two separate endowments) belies a long road to asset recovery, as asset levels are still slightly below their peak 2007 levels (see Chart 2).

Most other endowments have been doing better. Among 24 other foundations (with available figures from 2007), assets grew 15 percent over this period. Three endowments saw zero or negative growth, but 10 had asset growth of 20 percent or more since 2007, including those benefiting the University of Wisconsin and the College of St. Scholastica, a small private college in Duluth, Minn., which saw its endowment nearly double over this period to $54 million.

Endowments -- 4-9-14

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Higher ed endowments rebound in 2013 in district states

Posted by Ron Wirtz on 04/10/2014

Higher education budget officials got a bit of good news this year as endowments at many universities posted strong gains in assets in 2013, according to an annual report from the National Association of College and University Business Officers (NACUBO) and Commonfund Institute.

Nationwide, assets in 835 endowments tracked by the report grew by 12 percent to almost $450 billion. Assets declined slightly in 2012.

There are 40 higher education endowments of at least $20 million in Ninth District states. In 2013, their combined assets grew by 14 percent to $10 billion. Sixty percent of these endowments benefit private institutions, but they hold of minority (40 percent) of assets. The two biggest, by a considerable margin, support the University of Minnesota ($2.8 billion) and the University of Wisconsin ($2 billion). Both had strong results in 2013, but Minnesota’s assets leapt by more than 21 percent (see Chart 1).

Endowments typically grow by both investment returns and donations, though the NACUBO report does not detail these different asset streams. Growing endowments mean more resources for universities because IRS regulations require that foundations disburse at least 5 percent of assets annually—a minimum of $500 million this year alone from endowments in Ninth District states. This disbursement rule is also one reason some endowments have struggled to return to prerecession levels.

The strong asset increase last year at the University of Minnesota (which, technically, is two separate endowments) belies a long road to asset recovery, as asset levels are still slightly below their peak 2007 levels (see Chart 2).

Most other endowments have been doing better. Among 24 other foundations (with available figures from 2007), assets grew 15 percent over this period. Three endowments saw zero or negative growth, but 10 had asset growth of 20 percent or more since 2007, including those benefiting the University of Wisconsin and the College of St. Scholastica, a small private college in Duluth, Minn., which saw its endowment nearly double over this period to $54 million.

Endowments -- 4-9-14

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