Posted: Feb 1, 2013 2:48 AM
Source: Associated Press
College and university endowments lost ground slightly during the fiscal year ending last June 30, with investments declining 0.3 percent on average, but the performance of the stock market since then suggests endowments may again be strengthening.
Endowments are the assets owned and invested by universities, who typically spend about 4 to 5 percent of their values annually to support things like financial aid, faculty salaries and other expenses - and then try to replenish the payouts through fundraising and investment returns.
The survey of 831 schools, conducted by NACUBO, a university business officers group, and investment adviser Commonfund, found that at the average university, the endowment kicks in about 9 percent of the operating budget.
Verne Sedlacek, president and CEO of Commonfund, says that to beat inflation and replenish payouts to support university spending, endowments have needed to return about 7.4 percent annually.