After several bad years, college and university endowments grew an average of 15.1 percent in fiscal 2004, according to a study released Monday by the National Association of College and University Business Officers.
Endowment funds managed by Bates College and the University of Maine Foundation did slightly better. Bates, which announced a $120 million fund-raising effort in October, saw 17 percent growth in its $185.5 million endowment. The UMaine Foundation saw its endowment exceed $100 million for the first time as it grew by 21 percent.
Bowdoin, Colby, the University of New England and Thomas College each saw their endowment growth rates trail the national average, but still marked gains greater than last year, except for Thomas College.
NACUBO’s 15.1 percent endowment growth average for 2004 compares with a 19.1 percent gain achieved by the S&P 500 during the same time frame. However, endowment growth takes into account not only investment earnings but also growth from gifts, offset by expenditures and withdrawals.
A similar study by Commonfund Institute released earlier this month reported an average growth in endowment funds of 14.7 percent for fiscal year 2004. It compared the figure favorably to the 3.1 percent growth seen in fiscal year 2003, a 6 percent loss in fiscal 2002 and a 3 percent loss for fiscal 2001. For fiscal 2000, the average growth was 13.2 percent.
Barry Greenfield, Bates College’s poker-playing chairman of the college’s trustees’ Investment Committee, says he doesn’t gamble with the college’s money.
“Our duty is to manage the endowment for future generations,” he told Bates Magazine in its fall/winter edition. “You or I can chew up all our money if we want. But an endowment has to link past, current and future generations of Bates students and faculty.”
He likened the committee’s strategy to playing baseball.
“Our endowment is managed like a baseball player who’s constantly getting on base. We’re the Kevin Youkilis of endowments,” Greenfield told the magazine, speaking of a Red Sox third baseman with a strong on-base percentage. “The other side of this investment strategy is that we’re not trying to hit any grand slams. We’re diversified – we’re not trying to sit on just one pitch.”
Bates’ 17 percent endowment growth posted for 2004 compares with a 1.2 percent growth rate for fiscal 2003.
Bowdoin had posted a 5.1 percent growth rate in fiscal 2003, according to NACUBO, and Colby saw a 0.3 percent loss in its endowment that year.
NACUBO looks at the endowments of hundreds of participating institutions. It ranks the schools according to the size of their endowment, with Harvard perennially leading the pack. This year, 741 colleges and universities took part in the survey, the highest number ever.
When it comes specifically to college and university investments, while fiscal 2004 endowments achieved “an unusually high average one-year return rate,” it wasn’t enough to erase several years of poorly performing investments on the part of the institutions, said NACUBO in releasing its findings.
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