College Endowments Highest in Three Years
According to their joint annual study, the National Association of College and University Business Officers (“NACUBO”) and Commonfund are reporting that college endowments are at a three-year high. For the fiscal year ending June 2017, the annual net endowment returns at colleges and universities averaged 12.2 percent. The percentage is a significant jump from the fiscal year 2016 average of -1.9 percent, and it marks the highest average achieved since the fiscal year 2014 (15.5 percent). Despite the turnaround, recent data reveals that the 10-year average annual return decreased from 5 percent in 2016 to 4.6 percent in 2017. More. Read More.
Senate Proposal Levies Same College Endowments Tax as House
The U.S. Senate’s proposed tax reform would levy the same tax to private college endowments as the House’s version. Both the Senate and the House are calling for a 1.4 percent tax on net investment income, which will impact about 70 colleges with endowments over $250,000 per student. The focus on endowments is part of Congress’ recent attempts on how endowments can help reduce the cost of attendance at colleges and universities. More on the proposed college endowment tax is available on the Accounting Today website.
Harvard Ordered to Release Donor’s Financial Information
A federal judge has ordered Harvard University to release any financial information it possesses on entrepreneur Charles Spackman. The decision is in response to a lawsuit filed by investor Sang Cheol Woo to collect a judgment from Spackman, one of Harvard’s wealthiest donors. The Woo ruling could impact the money Harvard previously received from Spackman, and the school could be sued if a fraudulent transfer took place. More on the Harvard ruling is available at the Nonprofit Quarterly website.
College Endowments Continue to Struggle
College endowments last year posted their worst returns since the 2008 financial crisis. A recent National Association of College and University Business survey revealed that endowments averaged -1.9 percent for the 2016 fiscal year. The drop marks another decline for colleges and universities, which had a return of only 2.4 percent during the 2015 fiscal year. More on the 2016 fiscal year college endowment numbers is available on Inside Higher Ed.
Ivy League Endowments Drop
Over a dozen Ivy League schools are reporting declines in university endowments. Institutions like Cornell University are posting two to three-percent losses, including Ivy League schools with assets over $1 billion (e.g., Dartmouth College, Duke University). The university with the largest endowment, Harvard, even reported a two-percent loss last year. Conversely, Yale University experienced a 3.4-percent increase in endowments. More on Ivy League endowments is on the Nonprofit Quarterly website.
Topics: College Endowments
Wealthy Colleges Asked to Disclose Endowment Spending
In a letter to 56 private colleges with assets over $1 billion, the Republican leadership of the Senate Finance Committee and the House Ways and Means Committee are asking how some of the wealthiest schools in the U.S. manage and spend their endowments. Sent on Monday, the letter features 13 sets of questions regarding costs related to managing endowment funds and how schools spent their investment income the past three years. The inquiry is part of Congress’ review of federal policies that allow schools to have tax-free investment earnings and donors to benefit from tax deductions, as well as the. Read More.
Topics: College Endowments