College endowments rebound from recession

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A survey being released today finds that Pittsburgh's three largest universities, and several smaller campuses in the region, had endowment growth in 2011 that outpaced many of their peers around the nation.

Carnegie Mellon University, the University of Pittsburgh and Duquesne University are among 823 public and private schools that participated in a joint survey by the National Association of College and University Business Officers and Commonfund Institute. The annual survey covered a 12-month period ending June 30, 2011, and offered evidence that campus endowments are continuing to rebound from the recession.

Not all schools that participated in this year's survey took part the previous year. But the 799 that did collectively had endowment market value growth of 18.1 percent, officials involved in the survey said.

Carnegie Mellon, Pitt and Duquesne outpaced that percentage.

According to the survey, Carnegie Mellon's endowment rose in value by 24.8 percent to $1.02 billion from $815 million in 2010; Pitt saw a 24.3 percent increase to $2.53 billion from $2.03 billion in 2010; and Duquesne saw a 21.5 percent increase to $171.1 million, up from $140.8 million the previous year.

Market value figures in the survey reflect contributions, investment gains or losses, along with investment fees and any withdrawals from an endowment to fund operating or capital needs.

One reason for the market value growth nationally was a return on investment that averaged 19.2 percent, the best performance in a decade. The investment return in 2010 was 11.9 percent.

The survey does not suggest that schools have completely recovered from the recession, said William F. Jarvis, managing director and head of research for Commonfund Institute.

In fact, nearly half the 823 schools that participated this year have endowment market values that remain lower than they were in 2008, before the financial crisis. And the first six months of the current fiscal year suggest that endowment performance may not be as strong in 2012.

"The investment environment may be unsettled for some time to come," Mr. Jarvis said.

Nevertheless, the 2011 results represent encouraging news for institutions that use their endowments to fund scholarships, endow professorships, support athletic programs and other campus endeavors that are not covered by tuition or annual gifts, Mr. Jarvis said.

"[Endowments] subsidize a good portion of the cost of higher education, notably at private institutions but also at some public institutions," he said.

The news is certainly better than in 2009, when schools surveyed had an investment return of minus 18.7 percent.

Along with Pittsburgh's largest universities, several smaller campuses in the region saw gains well above the 18.1 percent increase reported across the survey.

For instance, Robert Morris University saw its endowment value grow by 37 percent to $26.2 million; Washington & Jefferson College's endowment value grew by 26.9 percent to nearly $104 million; Chatham University saw its endowment grow by 24.5 percent to $72.9 million; and Indiana University of Pennsylvania and its foundation saw an increase of 20.6 percent to $63.2 million.

Elsewhere in the state, Penn State University saw a 26.1 percent increase in its endowment market value to $1.72 billion; the University of Pennsylvania, which had the largest endowment of any Pennsylvania school in the survey, saw an increase of 16.1 percent to $6.6 billion.

Topping the national survey in endowment value was Harvard University, whose $31.7 billion endowment grew by 15.1 percent. Next came Yale University, up by 16.3 percent to $19.4 billion, and the University of Texas System, which saw a 22 percent increase to $17.1 billion.

"We attribute it partially to the markets' rebounding and strong fiscal management of our assets," Robert Morris spokeswoman Kyle Fisher said of the 37 percent increase at her school. "We're certainly gratified."



Bill Schackner: bschackner@post-gazette.com or 412-263-1977.


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