ISU Top 10 Endowment Performance (2022)

[LeaningCy]

According to wiki: https://en.wikipedia.org/wiki/List_of_colleges_and_universities_in_the_United_States_by_endowment

Endowment rankings for Iowa universities are as follows. Guess who's #2 in the state?

1. University of Iowa ($3.1B)
2. __________________ ($2.5B)
3. Iowa State University ($1.5B)

Spoiler

Grinnell College

 

[FouchodeHond]

According to wiki: https://en.wikipedia.org/wiki/List_of_colleges_and_universities_in_the_United_States_by_endowment

Endowment rankings for Iowa universities are as follows. Guess who's #2 in the state?

1. University of Iowa ($3.1B)
2. __________________ ($2.5B)
3. Iowa State University ($1.5B)

Spoiler

Grinnell College

Let’s launch a hostile takeover on second place.

 

[8bitnes]

Lastly, wish I had the source, but picture or post didn’t mention it.

Here is the source, but you have to buy the report

Page not Found

www.nacubo.org

 

[Drew0311]

I don't understand endowments. Is this just a university sitting on money? What are they doing with the money. If they have this much money, why are students paying so much for school. Not trying to start an arguement. I just don't really understand it.

 

[8bitnes]

Lastly, wish I had the source, but picture or post didn’t mention it.

Here's another article that discusses the report and reveals the results of how the 20 largest endowments performed.

Here’s how the 20 largest college endowments changed last year

Many of the largest endowments lost market value in a year of negative investment returns — but not all.

www.highereddive.com

Overall, nationwide the endowments averaged down 8%

Endowment returns plunge into negative territory

Investment returns followed one of the best years on record in 2021 with a very rocky 2022, data released Friday shows.

www.highereddive.com

IPERS, by comparison was down 3.9% for the same time period.

 

[nfrine]

Whenever I hear the word endowment I think of something else. This thread is disappointing...

 

[soccercy]

Grinnell College is #2...

They use the interest income on endowments to run things, right?

 

[LeaningCy]

I don't understand endowments. Is this just a university sitting on money? What are they doing with the money. If they have this much money, why are students paying so much for school. Not trying to start an arguement. I just don't really understand it.

It's invested like a retirement portfolio. The university draws from it in relatively small amounts to fund capital improvement projects and the like. To put it in perspective, I think ISU's annual operating budget is something like $750M, about half the total endowment.

When it comes to the big ivy league schools (e.g. Harvard at over $50B) there is definitely an argument to be made that they are hoarding wealth that could be deployed in more beneficial ways.

 

[Drew0311]

It's invested like a retirement portfolio. The university draws from it in relatively small amounts to fund capital improvement projects and the like. To put it in perspective, I think ISU's annual operating budget is something like $750M, about half the total endowment.

When it comes to the big ivy league schools (e.g. Harvard at over $50B) there is definitely an argument to be made that they are hoarding wealth that could be deployed in more beneficial ways.

Thats what I was thinking. I have heard Grinell has an insane Endowment and that school costs a fortune. Not much room for big facilites at that school either. Seems like some are just hording money.

 

[Acylum]

Thats what I was thinking. I have heard Grinell has an insane Endowment and that school costs a fortune. Not much room for big facilites at that school either. Seems like some are just hording money.

There are a bunch of schools that could completely stop charging tuition and still grow their endowments. The entire Ivy League IIRC. This was in an article I read pre-pandemic but I doubt it has changed much.

 

[FriendlySpartan]

Thats what I was thinking. I have heard Grinell has an insane Endowment and that school costs a fortune. Not much room for big facilites at that school either. Seems like some are just hording money.

Endowment funds have a ton of legal red tape to access and use funds. Usually there is a specific very small portion of the endowment fund that is allowed to be spent each year on operating costs and improvements. Also when reporting on a university endowment they are reporting the entire endowment. Many endowments are made up of a general fund and then special funds. For example both Michigan and Michigan state have endowments set up that can only apply to the medical school and in michigans instance the hospital system. Often there will be a business school endowment as well and there are very strict rules once again on what that money can be used for.

 

[cyclone1209]

View attachment 109904

Just ran into this picture on Twitter and was really proud to see ISU in the top 10. Especially since that was a very tough stretch for investments. Note fiscal year 2022 was through 6/30/22, so a few months old.

Lastly, wish I had the source, but picture or post didn’t mention it.

Whar Gary Barta??

 

[canker2323]

Thats what I was thinking. I have heard Grinell has an insane Endowment and that school costs a fortune. Not much room for big facilites at that school either. Seems like some are just hording money.

They aren’t holding mostly cash. They invest like other institutions.

 

[SCNCY]

Thats what I was thinking. I have heard Grinell has an insane Endowment and that school costs a fortune. Not much room for big facilites at that school either. Seems like some are just hording money.

The other thing about endowments is that the donor usually gets to decide what it’s used for. The principal amount is used to generate cash flow so that it can be used for the donors purpose. An endowment allows the donation funds to last for a longer period of time, with some of the cash flow to be retained to grow the principal, with the rest to be used for its purpose.

For example, if you ever hear of an endowed professor, it’s because a donor put up the principal funding to generate cash flow to pay for in whole, or part of that professors salary.

 

[SCNCY]

It's invested like a retirement portfolio. The university draws from it in relatively small amounts to fund capital improvement projects and the like. To put it in perspective, I think ISU's annual operating budget is something like $750M, about half the total endowment.

When it comes to the big ivy league schools (e.g. Harvard at over $50B) there is definitely an argument to be made that they are hoarding wealth that could be deployed in more beneficial ways.

Harvard is a business. The university is just one of those businesses.

 

[Mr.G.Spot]

According to wiki: https://en.wikipedia.org/wiki/List_of_colleges_and_universities_in_the_United_States_by_endowment

Endowment rankings for Iowa universities are as follows. Guess who's #2 in the state?

1. University of Iowa ($3.1B)
2. __________________ ($2.5B)
3. Iowa State University ($1.5B)

Spoiler

Grinnell College

Grinnell

 

[Mr.G.Spot]

I don't understand endowments. Is this just a university sitting on money? What are they doing with the money. If they have this much money, why are students paying so much for school. Not trying to start an arguement. I just don't really understand it.

It is a separate legal entity that controls These funds. It is a non-profit. The vast majority of Iowa State's earnings go back to Iowa State University to fund its operations and provide scholarships.

 

[Mr.G.Spot]

Thats what I was thinking. I have heard Grinell has an insane Endowment and that school costs a fortune. Not much room for big facilites at that school either. Seems like some are just hording money.

One of their trustees directed some of their endowment money and bought Brookshire Hathaway in the '70s

 

[Mr.G.Spot]

The other thing about endowments is that the donor usually gets to decide what it’s used for. The principal amount is used to generate cash flow so that it can be used for the donors purpose. An endowment allows the donation funds to last for a longer period of time, with some of the cash flow to be retained to grow the principal, with the rest to be used for its purpose.

For example, if you ever hear of an endowed professor, it’s because a donor put up the principal funding to generate cash flow to pay for in whole, or part of that professors salary.

If you donate $1 million then the annual appropriation is approximately $40,000.

 

[Mr.G.Spot]

The main thing that is driving these returns is the portion of the portfolio that is invested in private equity. Annually private Equity Funds will Mark to Market what they believe the private Equity Investments are worth. Schools that had a positive return last year generally have a healthy percentage, say 25%, in the private Equity world.

These are not liquid Investments. It generally takes 5 to 10 years to secure the return that they are estimating on an annual basis.