By Lian Bunny
News Editor
Student media has publicized St. Bonaventure’s declining enrollment numbers because of its implied financial consequences, however the media talks less about the $60 million in its endowment.
Endowments are financial gifts to a university or college. The money is invested, so the total asset value will remain unspent, and the school will only spend a portion of the money yielded from the investments. This makes the original gift amount remain constant and allows the gift amount to grow each year.
In a recent study on rates of return, the 2014 National Association of College and University Business Officers (NACUBO)-Commonfund Study of Endowments examined 832 institutions. A rate of return is the investments’ profit, expressed as a proportion of the original investment.
The study stated that U.S. colleges and universities nationwide returned an average of 15.5 percent for the 2014 fiscal year.
This means that the universities earned an average of 15.5 percent of the endowment value through investing the gift. This is an increase to the 11.7 percent the year before.
Of the 832 institutions, the study ranked St. Bonaventure as 581, with an 11.5 percent rate of return on its $60 million of endowments.
Mary Driscoll, associate vice president for development at the University Advancement Office, said endowments are usually given by alumni, friends, corporations, foundations, estates or community supporters.
The minimum amount for an endowment at Bonaventure is $25,000.
Brenda McGee, senior vice president for finance and administration, said the NACUBO-Commonfund study takes a whole host of schools with larger endowments than St. Bonaventure’s that have different opportunities in the investment market.
“We compare very favorably to the endowments our size,” McGee said.
According to McGee, the board of trustees’ investment committee decides how the endowments are invested, along with outside advisors and consultants from Prime Buchholz, an independent investment consultant company.
Endowments are invested in stocks and bonds mostly, with a small amount invested in inflation hedging and real estate. Inflation hedging protects an investment against the decreased value of a currency.
The university has a conservative investment strategy with a long-term outlook and no extremely risky investments, McGee said.
McGee also said the university has been successful with its endowments amount, according to the benchmarks, or goals, set by the board of trustees.
According to McGee, the one-year rate of return for the fiscal 2014 year was 10.3 percent versus the benchmark of 8.5 percent.
The three-year rate of return was 6.6 percent, beating the benchmark of 4.9 percent.
The university’s board of trustees established a policy in which the university can only spend 5 percent of the investment’s profits.
Endowment donors may allocate their gifts to a specific cause, such as scholarships or academic programs. The board investment committee determines how nonspecific gifts are allocated.
Approximately $21.4 million in endowments funded 251 separate scholarships in 2014.
About $6.5 million was allocated to academic programs, which funds programs such as the McQaude Center for Accounting Excellence. This $2 million endowment gives scholarship aid to incoming accounting majors; helps recruit, retain and support faculty; and provides support for student programming, advisement and professional development.
The Franciscan Institute, involved in research and publication of Franciscan works, received $5.3 million in endowments.
The Regina A. Quick Center for the Arts was allotted $3.5 million in endowments, which is used to maintain the museum and provide for a curator.
The Friedsam Memorial Library received $1.1 million in endowments. According to McGee, the money is primarily used to keep the library up to date on current works.
Approximately 2.2 million is allocated to a general endowment.
McGee said Bonaventure uses the earnings on the endowment to support the university’s annual budget, which is determined by the board of trustees.
In addition, the university has $4.8 million in unrestricted endowments. Unrestricted endowments can be used any way the recipient chooses.
The board of trustees decides how this $4.8 million endowment is spent at St. Bonaventure.
The remaining approximate $15 million consists of unspent endowment gifts’ investment earnings.
“The challenge is always balancing the immediate needs, the needs of our current students, and the needs of our future students, providing for them in an equitable way,” McGee said.
Driscoll said she thinks students should be aware of the financial assistance they are receiving. Then hopefully they will be able to give back after leaving St. Bonaventure and help the next generation of students, just as they were helped.
