INVESTMENT RETURNS LEAD PAC-10
NACUBO: National Association of College and University Business Officers
Benchmark: 70% Russell 3000 Stock Index, 30% Lehman Aggregate Bond Index
The University of Oregon fared considerably better than most universities in donor contributions and investment returns during the worst year of the national recession, fiscal year 2008–09.
According to the annual Voluntary Support of Education survey, total private giving to American colleges and universities declined 11.9 percent—the steepest drop in the survey’s fifty-year history—in 2008–09 from the previous fiscal year. Going against the trend, the University of Oregon recorded the second-highest giving total in its history, just over $129 million, in 2008–09.
The UO is also on track for a positive fundraising year in 2009–10. Through April, the university had raised $91.9 million with two months remaining in the fiscal year.
The UO Foundation—a separate nonprofit organization that receives, invests, and distributes private gifts for the university—also did considerably better than many university foundations in endowment investment returns during the 2008–09 fiscal year.
The foundation was the top-performing endowment in the PAC-10, for both one- and three-year periods, ending June 30, 2009. It was the only endowment to generate average annual positive returns of 0.5 percent during the last three years. The foundation’s one-year drop of 16.5 percent in fiscal year 2009 was less of a drop than all other PAC-10 universities. The foundation reported the second-best performance in the PAC-10 over the last five years by returning 5.1 percent annually and ranked third-best over ten years with a 5.7 percent annual rate of return.
The investment return figures were compiled by the National Association of College and University Business Officers (NACUBO). Each year, NACUBO reports endowment performance statistics from roughly 800 higher education institutions across the nation.
The foundation’s investment success was largely driven by a combination of broad diversification across asset classes, avoiding overheated markets, and trying not to swing for the fences.
“To borrow a quote from one of our managers, we try to avoid the losers and let the winners take care of themselves,” says foundation Chief Investment Officer Jay Namyet. This formula allows the endowment, today valued at $425 million, to compound more smoothly over time and provide more consistent payouts to support the university’s initiatives.