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Marquette Wire

The student news site of Marquette University

Marquette Wire

The student news site of Marquette University

Marquette Wire

Marquette’s endowment experiences growth, ranked in top 25 colleges

After taking a hit in the stock market in recent years, endowments at Marquette and universities across the country perked up and earned higher returns in 2011 than in the last three years.

Marquette’s endowments — gifts given to the university that are invested in the stock market — earned 22.3 percent returns last year. That return percentage puts Marquette into the top 25 percent of all endowments in the National Association of College and University Business Officers-Commonfund Study of Endowments (NABUCO). Nationally, endowments returned an average of 19.2 percent for the 2011 fiscal year, according to the study.

“Being in the top 25 percent says our assets are being managed well,” said Sean Gissal, chief investment officer at Marquette.

Endowments provide flexible resources for universities, Gissal said. Marquette’s current endowment is about $401 million. Annually, Gissal said, about five percent of the endowment’s market value is spent at Marquette.

The money taken out of the endowment each year is spent in three categories. Gissal said 40 percent is spent on academics, 40 percent goes toward student scholarships and the remaining 20 percent is spent on university operations.

Susan Teerink, director of student financial aid, said about 7 percent of all money available for undergraduate institutional student financial aid comes from endowments or current use gifts.

“Earnings from the endowment are included in the budget for student financial aid to ensure that they are utilized every year,” Teerink said.

Gissal said for every year from 2005 to 2011, Marquette has received endowment gifts in excess of the spendable amount approved.

“For those seven years, the endowment provided approximately $106 million in financial support to the university and endowment gifts received totaled approximately $141 million,” Gissal said. This means the university had $35 million more than the spendable funds withdrawn.

The goal of endowment investing is to achieve a return that provides a stable source of spendable income perpetually for the university, Gissal said.

Gissal said since 2004, the university has tried to diversify where endowment money is invested. Marquette’s was considered a ‘traditional’ endowment in which most of its money was invested in domestic stocks and its success was driven by the U.S. economy. Marquette has now diversified away from just U.S. exposure.

“This is a more stable investment approach, and hopefully it will provide higher returns over the long run,” Gissal said.

“It is easy to measure whether value is added,” Gissal said.

Gissal said endowment money accounts for about four percent of Marquette’s total operating budget.

Harvard University has the largest endowment in the country with $31.7 billion in 2011. Their endowment is about 30 percent of their operating budget.

Gissal said typically larger endowments have higher returns.

“Larger endowments tend to do better,” he said.

Dan DeWeerdt, senior director of engagement communication in University Advancement, said University Advancement works with alumni, parents and friends to align their interests and the priorities of the university in an email.

“Many benefactors understand that a strong endowment is critical for the long-term success of a university and choose to make a gift to an existing fund or establish an endowment for a lasting legacy in the name of their family or an individual,” DeWeerdt said.

He said donors have a great interest in scholarship aid. “Last year, 71 new endowed scholarships were created,” DeWeerdt said.

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