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Post by 78crusader on Jan 28, 2011 10:21:21 GMT -5
The 2010 NACUBO endowment report is out. This study lists the top 865 institutions in endowment size. Here is VU's rank, together with a sampling of some other schools:
Calvin 86 million #400 rank
Augustana 99 million #369 rank
Butler 128 million #320 rank
Drake 135 million #311 rank
VU 140 million #305 rank
Wheaton 273 million #206 rank
Wabash 303 million #179 rank
The bad news is this: even though just about everybody made money on their endowment in 2010 (the average return was 11%), just about the only school to report a decrease was...VU, at -0.2% Keep in mind that in 2009, while the average return was around -17%, VU managed to lose -29%. What is the explanation for these numbers?
Paul
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Post by vu72 on Jan 28, 2011 12:57:40 GMT -5
The 2010 NACUBO endowment report is out. This study lists the top 865 institutions in endowment size. Here is VU's rank, together with a sampling of some other schools: Calvin 86 million #400 rank Augustana 99 million #369 rank Butler 128 million #320 rank Drake 135 million #311 rank VU 140 million #305 rank Wheaton 273 million #206 rank Wabash 303 million #179 rank The bad news is this: even though just about everybody made money on their endowment in 2010 (the average return was 11%), just about the only school to report a decrease was...VU, at -0.2% Keep in mind that in 2009, while the average return was around -17%, VU managed to lose -29%. What is the explanation for these numbers? Paul I think you have asked some very good questions. What I don't believe is that anyone on this board would have the slightest idea what the answer(s) may be. I do think you should either contact President Heckler ot one of the senior finance guys and ask them for an explanation. Let us know what you find out. |
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Post by vufan75 on Jan 28, 2011 13:46:50 GMT -5
The 2010 NACUBO endowment report is out. This study lists the top 865 institutions in endowment size. Here is VU's rank, together with a sampling of some other schools: Calvin 86 million #400 rank Augustana 99 million #369 rank Butler 128 million #320 rank Drake 135 million #311 rank VU 140 million #305 rank Wheaton 273 million #206 rank Wabash 303 million #179 rank The bad news is this: even though just about everybody made money on their endowment in 2010 (the average return was 11%), just about the only school to report a decrease was...VU, at -0.2% Keep in mind that in 2009, while the average return was around -17%, VU managed to lose -29%. What is the explanation for these numbers? Paul I think you have asked some very good questions. What I don't believe is that anyone on this board would have the slightest idea what the answer(s) may be. I do think you should either contact President Heckler or one of the senior finance guys and ask them for an explanation. Let us know what you find out. A link to the NACUBO report Paul refers to in his post. www.nacubo.org/Documents/research/2010NCSE_Public_Tables_Endowment_Market_Values_Final.pdf |
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Post by sliman on Jan 28, 2011 14:19:26 GMT -5
As noted in the preface to the NACUBO listings, the figures represent change in the value of the endowment, not earnings for the year. For example, Valpo's earnings could have been excellent but the value of the endowment decreased because some endowment (that for which use is controlled by the university, not specified by the donor) was spent at a rate that slightly exceeded the earnings and gifts to endowment. Some of the other schools that showed significant increases in endowment may be in the middle of major campaigns and/or benefited from large gifts to the endowment. As for its investments, I believe most of Valpo's endowment is managed by the same firm that manages that of many schools whose endowment size does not justify hiring internal staff to manage it. Someone can check, but I believe Butler's endowment showed a significant drop several years ago because some funds were spent and then further eroded by the stock market; they're now rebuilding it.
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Post by vufan75 on Jan 28, 2011 15:47:54 GMT -5
As noted in the preface to the NACUBO listings, the figures represent change in the value of the endowment, not earnings for the year. For example, Valpo's earnings could have been excellent but the value of the endowment decreased because some endowment (that for which use is controlled by the university, not specified by the donor) was spent at a rate that slightly exceeded the earnings and gifts to endowment. Some of the other schools that showed significant increases in endowment may be in the middle of major campaigns and/or benefited from large gifts to the endowment. As for its investments, I believe most of Valpo's endowment is managed by the same firm that manages that of many schools whose endowment size does not justify hiring internal staff to manage it. Someone can check, but I believe Butler's endowment showed a significant drop several years ago because some funds were spent and then further eroded by the stock market; they're now rebuilding it. Good point, sliman! I thought the same when looking at the preface. Earnings could of been ok and similar to other universities, Valpo could of just spent from the endowment slightly more in 2010 than it earned. |
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Post by vu72 on Jan 28, 2011 18:18:21 GMT -5
Again we no specific knowledge, the results may be indicative of the "new" approach to construction projects at Valpo.
During the Alan Harre era, no building would be started unless all the funds for its construction were in place as well as the money for its maintenance endowment. I'm sure this wasn't always the case but suffice it to say that a very large percentage of said costs needed to be in the bank.
Now we have entered a new phase where the need for a new building has trumped the need to be assured that funds were in place. The new administration believes more in the concept of "build it and the money will come". This is not just a cavalier approach to academic management but rather a recognition of the very competitive environment in which Valpo currently operates.
This turned out to be a long winded way of saying that this new approach may very well have resulted in spending some of the endowment to get the ball rolling on things like the new Arts and Sciences headquarters, who knows.
Finally, as to the investment results calculation, new monies in, or existing monies coming out, should not effect performance. That is another calculation entirely. It is too complicated to detail here, but, I think Sliman has correctly noted that the results as published did not relect investment returns.
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Post by 78crusader on Jan 28, 2011 18:45:35 GMT -5
Everyone that replied to this post has raised good points.
What bothers me is that many, if not most, schools are in the same boat we're in -- fighting to get students out of an increasingly smaller pool of high school graduates (birth rates in the 1990s starting trending down), and facing the issue of replacing aging and/or inadequate facilities. Yet we are the ones who have a negative return on our endowment, even though literally 99% of all four-year institutions showed a gain. And our endowment performance in 2009 was quite bad -- our losses of 29% were nearly double that of the national average of 17%.
What I don't understand is that both President Harre and President Heckler have repeatedly stressed the need for growing the endowment -- yet it is not growing, perhaps because the University is using funds out of the endowment to put up buildings, or to sweeten financial aid packages to students (or perhaps our investments are quite terrible, I don't know). Whatever the cause is, it is not a sustainable model -- and President Heckler has repeatedly said that he is not in favor of continuing with unsustainable patterns.
Paul
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Post by crusadermoe on Jan 28, 2011 22:47:49 GMT -5
The numbers do look odd. The 0.2% loss in 2010 almost looks like a typo. Maybe it is. Both numbers are surprising.  |
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Post by crusadermoe on Jan 29, 2011 13:44:52 GMT -5
Looks like the only large university to decrease its endowment was Baylor. Is there a Drew connection?  |
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Post by theladybook on Feb 9, 2011 0:29:50 GMT -5
"What I don't understand is that both President Harre and President Heckler have repeatedly stressed the need for growing the endowment -- yet it is not growing . . ."
Time to get out the checkbooks, friends.
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