Endowment Investing
In Banner Fundraising Year, Wealth Gap Between Universities Widens
Fundraising figures in 2011 were better than average for nearly all colleges and universities, but the discrepancy between the top 20 wealthiest universities and all others continued to widen drastically. As the San Francisco Chronicle reports, the top 25 wealthiest universities accounted for 86 percent of all $30.3 billion in 2011 fundraising. Last year’s fundraising total nationally remains $1.3 billion below the 2008 peak of $31.6 billion, and while some non-elite schools had good years, many were still struggling as the economy sputtered last year. Roughly two-thirds outside the Top 20 saw fundraising rise by less than the 8.2 percent national average.
College Endowments Up 19% in 2011
Fiscal year 2011 was a good one for college endowments, with an average return of 19.2 percent. In a study by the National Association of College and University Business Officers (NACUBO) of 823 U.S. colleges and universities, the double-digit growth built even further on 2010′s 11.9 percent jump. However, as the Chicago Tribune reports, endowment funds, while up, are still not fully recovered to 2008 levels. Colleges typically spend around 5 percent of their endowment annually to boost spending on things like faculty salaries, student financial aid and other operating costs. Most colleges depend largely on tuition revenue and government support, but at elite universities, endowment spending accounts for a substantial. Read More.
Lawmakers Consider Making Nonprofit Universities Pay More Taxes
As 2011 comes to a close, large universities are looking back on a very good year for their endowment funds. As The Fiscal Times reports, Harvard University, which holds the largest endowment fund in the nation, showed a 21.4 percent return on investments, growing by $4.4 billion to a total of $32 billion. Cash-starved government entities are paying more attention than ever to the discrepancy between these profits and the extensive tax relief offered to these institutions. “At some point, a nonprofit gets so rich that it seems kind of obscene to let wealthy universities get out of paying taxes,” said James Miller, an. Read More.
College and University Endowments Up Nearly 12% in 2010
In its annual study of college and university endowments, the National Association of College and University Business Officers ( NACUBO ) found that, in the period between July 1, 2009 and June 30, 2010, endowments grew by 11.9 percent. This figure, net of all investment fees and expenses, represent a record high in the 40-year history of the study. “This most recent study strengthens the case for reviewing the investment and payout policies of endowments in the context of tax reform,” said Senator Chuck Grassley , Ranking Member of the Finance Committee. “Taxpayers and students deserve to understand what they’re getting in return for the tax benefits. Read More.
CB&H Seminar: Topics and Tactics for Nonprofit Success (5/11/10, Richmond, VA)
Join us for an all-day seminar focusing on some of the most important tax, accounting and business matters facing the nonprofit sector. You will hear from a variety of subject matter experts on the most pressing operational and financial issues facing nonprofit senior management today. Topics will include:
Save the Date! CB&H Hosts Annual Richmond Not-for-Profit Seminar (May 11, 2010)
Topics to include: Fundraising in tough economic times Effective use of Boards Tax Update A&A update including FIN 48 and FASB 157 Endowment management Wellness in the workplace