Thursday, December 18, 2014
YOLO COUNTY NEWS
99 CENTS

Study: College endowments hit hard by markets

CollegeEndowmentsW

By
From page A1 | February 07, 2013 |

On average, college and university endowments’ investments lost 0.3 percent in the last fiscal year, a sharp drop from the average return of 19.2 percent in fiscal 2011, according to a study by the Commonfund Institute and the National Association of College and University Business Officers, known as Nacubo.

The returns were dragged down mostly by the dismal performance of international equities, whose returns declined by 11.9 percent, attributable in good part to the economic turmoil in Europe and the slowdown in China. Domestic stocks had an average return of 2 percent, and fixed-income assets 6.8 percent.

The University of California endowment’s investments lost 0.7 percent and UC Davis Foundation endowment’s 0.4 percent — compared to gains of 20.2 percent and 18.7 percent, respectively, in 2011.

The Nacubo study, based on data from 831 American colleges and universities with a total of more than $400 billion in endowment assets, showed more positive long-term results.

“Over the last 10 years, the average rate of return was 6.2 percent,” said John Walda, the president of Nacubo. “That’s a good number when you compare it with various indices.”

In the fiscal year that ended in June 2011, the average 10-year return was 5.6 percent.

The study, which includes large and small institutions, public and private, found that those with the largest endowments had the greatest returns last year. Among universities with endowments greater than $1 billion, the average return was 0.8 percent. Those with endowments of $25 million to $500 million had negative returns, and those with endowments under $25 million had a return of 0.3 percent.

Altogether, 71 institutions have endowments greater than $1 billion, and 145 have more than $500 million.

The value of the UCD Foundation’s endowment stood at $204 million at the end of the fiscal year, up 1.5 percent.

UCD raised a total of $132 million — its second best fundraising year ever. Of that, $24 million was pledged to various endowments, including the UCD Foundation, according to Shaun Keister, vice chancellor for development and alumni relations.

The foundation’s endowment has benefited from the Campaign for UC Davis, which seeks to raise $1 billion by 2014. The campus’ first comprehensive fundraising effort has tallied $915 million since July 2006. UCD launched the campaign’s public phase in the fall of 2010.

The colleges and universities in the Nacubo study spent an average of 4.2 percent of their assets last year to support their operations, down from 4.6 percent the previous year. But while the spending rate had declined somewhat, the average dollars spent per institution grew by about 7 percent.

Most colleges and universities have a policy of spending 4 percent to 5 percent of their average endowment value over the previous three years, so the sharp rises in endowment values in 2010 and 2011 increased the amount paid out last year. The UCD Foundation’s spending rate is 4.25 percent.

The institutions with the largest endowments, which get a significant portion of their operating budgets from endowment spending, spent an average of 4.7 percent last year. The institutions with the smallest endowments spent slightly under 4 percent.

“The long-term goal of most endowments is to exist in perpetuity and grow with the rate of inflation,” said Verne Sedlacek, president of Commonfund.

To do that while paying out 4 percent to 5 percent a year, he said, would require annual returns of at least 8 percent, given that the higher education price index has been rising about 3.8 percent a year over the last decade. “Universities are still not back to where they need to be,” Sedlacek said.

Online: http://giving.ucdavis.edu

— Tamar Lewin of the New York Times and Enterprise staff writer Cory Golden contributed to this report.

Comments

comments

Wire and staff reports

  • Recent Posts

  • Enter your email address to subscribe to this newspaper and receive notifications of new articles by email.

  • .

    News

    Former foster youths aided by UCD’s Guardian programs

    By Sarah Colwell | From Page: A1 | Gallery

     
    Rain Recyclers saves water for another day

    By Elizabeth Case | From Page: A1 | Gallery

     
    City plans signs to improve flow on Fifth Street

    By Dave Ryan | From Page: A1 | Gallery

     
    State gets more rain, big mudslide

    By The Associated Press | From Page: A2

    Boston bombing suspect in court for first time since 2013

    By The Associated Press | From Page: A2

     
    U.S., Cuba patch torn relations in historic accord

    By The Associated Press | From Page: A2 | Gallery

    Supplies collected for victims of abuse

    By Enterprise staff | From Page: A3

     
    New technology chief will join McNaughton Newspapers

    By Tanya Perez | From Page: A3 | Gallery

    Feds will discuss Berryessa Snow Mountain protection

    By Enterprise staff | From Page: A3

     
    ‘Longest Night’ service Saturday

    By Enterprise staff | From Page: A3

    Nominate teens for Golden Heart awards

    By Enterprise staff | From Page: A3

     
    Journalist will join post-film discussion Thursday

    By Enterprise staff | From Page: A3

    City offices will take a winter break

    By Enterprise staff | From Page: A3

     
    Konditorei presents free holiday concert

    By Enterprise staff | From Page: A3

    Yolo County needs a few good advisers

    By Enterprise staff | From Page: A4

     
    Per Capita Davis: Time to stop fooling around

    By John Mott-Smith | From Page: A4

     
    NAMI-Yolo offers free mental health education program

    By Enterprise staff | From Page: A5

    .

    Forum

    Disagreement on mother’s care

    By Creators Syndicate | From Page: B5

     
    Marovich is a brilliant diplomat

    By Special to The Enterprise | From Page: A6

    And a jolly time was had by all

    By Special to The Enterprise | From Page: A6 | Gallery

     
    Tom Meyer cartoon

    By Debbie Davis | From Page: A6

    Remember that all lives matter

    By Letters to the Editor | From Page: A6

     
    Pollution from electric vehicles

    By Letters to the Editor | From Page: A6

    .

    Sports

    On skiing: What to know when buying new skis

    By Jeffrey Weidel | From Page: B1 | Gallery

     
    Devil boys host Les Curry beginning Thursday

    By Enterprise staff | From Page: B1

    UCD women gear up for second half of swim season

    By Bruce Gallaudet | From Page: B1 | Gallery

     
    Aggie men begin 4-game road trip at Air Force

    By Bruce Gallaudet | From Page: B1 | Gallery

    Youth roundup: DBC Juniors rider Kanz wins a cyclocross event

    By Enterprise staff | From Page: B2 | Gallery

     
    .

    Features

    College Corner: How does applying for financial aid work?

    By Jennifer Borenstein | From Page: B3

     
    What’s happening

    By Anne Ternus-Bellamy | From Page: B3

     
    Anniversary: Barbara and Jan Carter

    By Special to The Enterprise | From Page: A8

    Something growing in the mailbox

    By Don Shor | From Page: A8 | Gallery

     
    .

    Arts

    Sing and dance along to Cold Shot at Froggy’s

    By Special to The Enterprise | From Page: A7 | Gallery

     
    Point of Brew: Recollections of Christmases past

    By Michael Lewis | From Page: A7

    Golden Bough brings Irish holidays to The Palms

    By Special to The Enterprise | From Page: A7 | Gallery

     
    Come ‘Home for the Holidays’ and benefit school arts

    By Special to The Enterprise | From Page: A7

    .

    Business

    .

    Obituaries

    Rena Sylvia Smilkstein

    By Special to The Enterprise | From Page: A4

     
    .

    Comics

    Comics: Thursday, December 18, 2014

    By Creator | From Page: B6

     
    .

    Last Minute Gift Guide

    Young phenoms make YouTube success look like child’s play

    By The Associated Press | From Page: LMG1

    Classic or contemporary, it’s all holiday music to our ears

    By The Associated Press | From Page: LMG2

    Teen gifts: ideas for hard-to-buy-for big kids

    By The Associated Press | From Page: LMG3

    Holiday decorating contest winners light up our lives

    By Dave Ryan | From Page: LMG4 | Gallery

    Gift ideas for the health-conscious

    By Special to The Enterprise | From Page: LMG6

    Hall of Fame proudly puts these toys on the shelf

    By The Associated Press | From Page: LMG7