Endowment sees increase
November 18, 2011
While global financial markets remain in turmoil, the College of William and Mary has something less volatile: its endowment fund. The 2011 President’s Report, released earlier this month, details fund growth, increased giving and falling state funding.
The report estimated that the William and Mary Investment Trust grew 15.8 percent, or $85.1 million, in the past fiscal year.
“It has never been more important for the College to grow its endowment,” College President Taylor Reveley said in a statement. “This requires wise management of our existing assets and a robust effort to add to them via new endowment gifts. We are making serious progress in both areas. Since [the end of Fiscal Year 2011 on June 30], there has been a good bit of turbulence in the market, and it’s unclear where the economy is headed, both nationally and internationally.”
The report estimates the worth of the WAMIT and related funds to be $624.7 million. Fiscal Year 2011 was the first in which the fund exceeded its value since 2008; the market meltdown damaged the fund and caused it to lose $85.2 million in the subsequent fiscal year.
The report also detailed gifts from nearly 30,000 donors to the College for the past fiscal year that totaled $41.1 million.
Despite this endowment growth, the endowment remains small compared to those of many elite American universities, especially private schools.
The endowment fund of Northwestern University totals $6 billion, Brown University totals $2.5 billion, Georgetown University totals over $1 billion and Duke University has $5.7 billion.
The College’s six-year fiscal plan, proposed in July and adopted in September by the Board of Visitors, takes this and other concerns into account.
“The plan acknowledges that the Commonwealth will continue to play an important role in the College’s future, providing both operating and facilities support,” Vice President of Finance Sam Jones ’75 MBA ’80 said in a letter to the public. “However, we do not expect that the state will restore those funds lost since 2008.
Competing pressures for resources, and a state revenue base that is driven solely by economic factors, will limit the dollars available to higher education.”
The report specified that the College takes in $289.9 million in operating revenue and spends $277.5 million in operating expense. State funds currently support 14.8 percent of the operating revenue, which is expected to fall to 12.8 percent for Fiscal Year 2012.
The decrease in state funds would increase the emphasis on both in-state and out-of-state student tuition and fees as a source of compensating revenue.
Coupled with an explicit promise to retain 65 percent of the student population as in-state students, this is likely to increase tuition rates in the College’s future.
“We would all like a larger endowment as a cushion against short-term cuts, but more importantly, as one way to move the College forward,” Jones said in a statement. “While on a per student basis we compare favorably to other public institutions, we compete against private institutions that to date have raised more money and have larger endowments. Generally, public institutions came late to the fundraising game since the state historically was seen as the primary funding vehicle. When states struggle to find the money to move institutions forward, private dollars become even more critical.”
The total assets of the College’s trusts now exceed $534 million, with $33 million in outstanding liabilities. Net assets for the 2011 Fiscal Year totaled $501 million, an increase of $63 million from Fiscal Year 2010.
The College’s assets are expected to continue to grow, and stabilize as global markets improve.