higher education

University endowments grow despite economy

Fundamental economic issues … have not been addressed

SALVE Regina University, a Catholic institution in Newport, saw the biggest growth in its endowment among local schools, according to data published by The Chronicle of Higher Education Jan. 31.
Posted 2/1/12

WASHINGTON – Salve Regina University, a Catholic institution in Newport, saw the biggest growth of its endowment among local institutions last year, according to data published by The Chronicle of Higher Education on Jan. 31.

The data was based on the annual survey of endowment returns by the National Association of College and University Business Officers and the Commonfund Institute.

The survey, which does not release individual institutions’ returns on investments, found universities experienced a 19 percent increase in the value of their endowments in 2011. In 2009 there was a 19 percent drop in value, followed by a 12 percent rise in 2010.

The survey does report overall endowment growth - including gifts received and endowment money spent. It includes 839 endowments in the United States and Canada and compares fiscal years 2011 and 2010.

Following Salve Regina in its 21.1 percent endowment growth year over year were: Johnson & Wales University, 20.1 percent growth; Rhode Island College Foundation, 19.8 percent; and Bryant University, 17.9 percent.

Smaller growth was seen at Brown University, 15.8 percent; University of Rhode Island, 15 percent; and in last place - the Rhode Island School of Design, 11.2 percent.

University endowments grew in 2011 despite the “continuing struggles of the economy,” The Chronicle of Higher Education said.

“The bad news is that endowments have yet to rise from their pre-recession levels. And trouble may lie ahead for 2012,” it said. The Chronicle cited experts saying that more trouble in Europe and Asia could affect U.S. endowments, because 17 percent have their assets in international equities.

“In terms of our outlook going forward, we are very concerned and are positioned defensively,” said Bruce Zimmerman, chief executive of the University of Texas Investment Management Company.

“Our concern is that the fundamental economic issues, namely too much debt in the developed world, have not been addressed. It’s the 800-pound gorilla in the room that no one wants to talk about.”

The survey reports overall changes to the size of endowment – The University of California at Los Angeles’s endowment grew 49.3 percent, the result of “several large gifts;” Oklahoma State University and the University of Iowa also saw their endowments rise by more than 30 percent.

When looking at the Rhode Island endowments ranked by size, Brown University, with nearly $2.5 billion, took the cake at No. 28, followed by RISD, ranking No. 213 overall with nearly $318.7 million. Third locally, as well as No. 239 nationally, was Johnson & Wales, with $246.4 million.

In nearby Massachusetts, Stonehill College and Wheaton College saw their endowments increase 18.5 percent and 12.4 percent, respectively.

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