SU’s endowment makes comeback after seeing losses during recession
Breaking a two-year investment decrease, Syracuse University’s endowment fund will post its highest investment return in three years. SU raised a total of $894 million as of October.
The endowment is made up of gifts and other funds given to the university that are meant to be saved rather than spent. SU then uses the interest accrued off the endowment to fund various projects and operational costs. This year, SU used 17.2 percent of the accrued interest, in comparison to negative 6.6 percent and negative 25.5 percent in 2008 and 2009, respectively, according to the university’s records. This year’s return resembles the 21.1 percent from 2007.
And in comparison to other universities, SU brought back a good return, said SU Treasurer Barbara Wells.
‘I have only heard of one or two schools that exceeded (SU),’ Wells said.
The endowment total of $894 million is a 5 percent increase from July, when the last endowment reports went public. The endowment rebounded with the market recovering, Wells said. The next endowment report will be made in January 2011.
Since SU uses a small percentage of each donation, students may not always see an immediate effect from a large return, Wells said. The Treasurer’s Office uses market evaluations of the past three fiscal years as a basis for determining how to use money from the endowment returns. The endowment returns support anything from scholarships to providing funds for a specific college within SU.
The university’s Investment and Endowment Committee decides how much of the endowment goes to returns each year and where the funds go within the university. In many cases, the donor predetermines the purpose of the endowment funds, such as going to specific research or for particular professorships.
‘Think of it like a checking and savings account, but you are living off the interest,’ Wells said.
If a donor has no preference for the funds’ use, the donation money goes in SU’s budget for the following year, Wells said.
‘We have an obligation to support purposes, so it’s not just saving up to have a big endowment,’ Wells said.
But there is no guarantee the endowment will continue to rebound and cease dropping, Wells said. There is only hope that the market will come to more normal levels because investors are more inclined to invest in endowment in a brighter economy, Wells said.
Published on November 10, 2010 at 12:00 pm
