Indiana college endowments struggled in FY 2012

Endowments at most Indiana universities took a hit in the 2011-2012 fiscal year, causing them to stumble as they worked their ways back to pre-recession levels.

Eighteen of 24 Indiana institutions surveyed reported declines in their endowments, which pay for student scholarships, capital projects and operational costs, among other expenses.

And four of the six that grew increased less than 0.5 percent, according to the National Association of College and University Business Officers-Commonfund Study of Endowments released Friday.

Overall, Indiana schools experienced a 1 percent drop in their endowments, which totaled almost $12.6 billion dollars as of June 30, 2012.

But take out the University of Notre Dame, whose $6.3 billion endowment made up half the pot, and the 23 remaining institutions saw a 4.5 percent slide.

The average market value for the 831 universities that participated in the report dropped 0.7 percent last year, with the median down 1.8 percent, after they soared 19.2 percent the previous year before the investment market turned tepid.

The Standard & Poor’s 500 market index over the previous fiscal year—July 1, 2011 to June 30, 2012—increased 1.7 percent.

But endowments can’t just reinvest their returns. They have obligations to pay out certain amounts in grants and scholarships—commonly about 5 percent of their average values over three years.

As the IBJ reported in October, university endowments in the state have surged back since they hit bottom in the recession, but they have a long way to go. Obligations to give out certain amounts each year combined with weak fundraising environments often hinder progress.
http://www.ibj.com/article?articleId=37373

Purdue University attributes its 4.2 percent drop to $1.92 billion on a -2.5 percent investment return. The endowment ranked 32nd in the U.S. and Canada and second in Indiana behind Notre Dame.

Chief Investment Officer Scott Seidle, in a message on Purdue’s website, attributed the investments’ poor market performance to declines in emerging markets.

“As we navigate this period of uncertainty in the financial markets we are mindful of our fiduciary duty to our donors,” Seidle states. “The Purdue Endowment continues to utilize a diversified investment strategy to generate the returns that allows the University to spend today while saving for the future.”

Indiana University, which ranked No. 46, ticked up 0.1 percent to almost $1.58 billion.

“In such challenging economic times, we credit the investment committee of our board of directors and our investment staff with careful planning and a strategic, long-term focus, which will continue to provide vital support for the university for generations to come,” Dan Smith, president and CEO of the Indiana University Foundation, said in a prepared statement.

Ball State University had the largest recorded growth after it reported a 2.3 percent increase to $165.5 million. That was after revising the $140.3 million it originally reported for the previous year up to $161.7 million.

To summarize the Indiana schools standings at the end of the 2011-2012 fiscal year:

                    Market Value    Change    National Ranking
— University of Notre Dame:        $6,259,598,000    1.1%    13
— Purdue University:            $1,916,968,000    -4.2%    32
— Indiana University:            $1,576,615,000    0.1%    46
— DePauw University:            $483,047,000    -3.6%    153
— Wabash College:            $324,996,000    -4.6%    203
— Earlham College:            $324,381,000    -1.2    204
— Ball State University:        $165,450,000    2.3%    300
— Valparaiso University:        $163,530,000    -0.1%    302
— Rose-Hulman Institute of Technology:    $163,278,000    -8.4%    303
— Butler University:            $149,004,000    -5.4%    325
— Hanover College:            $127,858,000    -6.9%    350
— Mennonite Education Agency:        $127,417,000    -8.1%    353
— Saint Mary’s College:            $119,910,000    -6.3%    362
— Goshen College:            $94,011,000    -5.3%    411
— Franklin College:            $79,997,000    0.2%    441
— University of Indianapolis:        $70,880,000    -2.7%    480
— University of Evansville:        $70,537,000    -5.8%    481
— Indiana Wesleyan University:        $68,126,000    -0.8%    489
— Taylor University:            $67,505,000    -7.7%    493
— Manchester University:        $42,936,000    0.1%    598
— Indiana State University:        $42,472,000    -7.6%    600
— Indiana Institute of Technology:    $40,226,000    -2%    613
— Huntington University:        $20,637,000    0.3%    722
— Saint Mary-of-the-Woods:        $10,801,000    -2.2%    788