2013 endowment figures slowly coming out...

<p>Michigan seems to have solidified its place as the 6th wealthiest university in the country. For the last four years, it has traded places with Columbia, always by a few million dollars. This year, Michigan's endowment has exceeded Columbia's by $200 million, $8.4 billion to $8.2 billion. Penn's endowment hit the $7.7 billion mark. Northwestern has not yet released their new figures, but they endowment is unlikely to exceed the $8 billion mark. </p>

<p>With Michigan set to start its new multi-billion dollar fund-raising campaign next month, the University endowment will only outpace that of other universities with similar endowments. In the last 6 months alone, three alums (Helen Zell, Charles Munger and Steve Ross) have donated $360 million! </p>

<p>As it is, the university's financial situation and bond rating is firmly planted among the top 20 in the nation, and it is likely to improve significantly in the next 5-6 years.</p>

<p>Why is the university campaigning so hard for fund-raising? I don’t know how it all works.</p>

<p>And if we’re #6 endowment, why are we only top 20 bond rating? What makes UofM’s bond rating waver from at least the top 10?</p>

<p>Michigan’s bond rating is #1, along with a dozen or so other universities. It has the highest bond rating of any university in the nation. It is its financial position that is among the top 20, primarily because of its size. Although its endowment is the 6th largest in the nation, Michigan has 43,000 students. The only reason why it is not among the top 10 is because there are too many well off universities that it is not possible to say for sure which are among the top 10. Caltech, Dartmouth, Harvard, Notre Dame, Princeton, Rice, Stanford and Yale are definitely among the the top 10, but beyond those, there are a dozen or so universities with enviable financial resources, and Michigan is one of them.</p>

<p>The University has been campaigning hard for the last three decades because it realized early on that it could no longer rely on the state. We discussed this at length in a previous post. The University has simply found an alternative means of raising money. In the 60s, Michigan relied almost entirely on the state to fund operations. In the last 50 years, the University has developed great relationships with alums and has developed its endowment to the point where its financial position (on a per capita basis) is on par with universities such as Brown, Columbia, Cornell, Johns Hopkins, Penn, Vanderbilt and UVa.</p>

<p>“Why is the university campaigning so hard for fund-raising? I don’t know how it all works.”</p>

<p>Don’t you know why alopez14? Just read all of your posts about how the state of Michigan is collapsing.</p>

<p>I understand that but guess I don’t understand why they need to campaign so hard if they already have an $8.4B treasure chest? Are they ramping up endowment efforts to offset more looming state cuts? What does a [larger] endowment offer? Like if the endowment jumped to $9B what is the impact felt on campus?</p>

<p>We may have a very large endowment, but we also have a very large school. I understand when people ask why Ross donated so much to the business school and the athletic department, but what people don’t seem to realize is that this takes a lot of stress of the rest of the University’s programs. </p>

<p>The rate that tuition is increasing sucks, but this is is happening everywhere. The larger the endowment is, the more scholarships can be issued and the better deserving individuals can pursue higher education here. </p>

<p>It all does have a sort of trickle down effect. Even just a few years ago, many dorms in the University housing system looked awful. Now there have been renovations to Alice Lloyd, Couzens, East Quad, and currently South Quad (on top of the construction of NQ awhile back). Similar type investments across the board do nothing but increase the University’s image on a national (and international) scale as it improves upon the resources by which students have access to.</p>

<p>@alopez14 Sure the University of Michigan has a pretty decent amount of money, but that isn’t to say that even stronger financials won’t be put to good use. The University of Michigan is one of the most expensive public universities in the country and the administration is trying very hard to change that without being forced to cut quality. The best way they believe that they can bring about this change is through a concentrated effort to dramatically increase the amount of money in the endowment proportioned towards student financial aid which has already been stated as the primary goal of this upcoming campaign.</p>

<p>UM is trying to provide more aid to the students particularly for the oos one. It has nothing to do with the State funding which is minimum anyway.</p>

<p>And Notre Dame’s 8.3B? </p>

<p>[Notre</a> Dame endowment returns 11.8 percent for fiscal year 2013 // News // Notre Dame News // University of Notre Dame](<a href=“http://news.nd.edu/news/43128-notre-dame-endowment-returns-11-8-percent-for-fiscal-year-2013/]Notre”>http://news.nd.edu/news/43128-notre-dame-endowment-returns-11-8-percent-for-fiscal-year-2013/)</p>

<p>NU reported $8.2B.</p>

<p><a href=“http://www.northwestern.edu/about/facts/finances.html[/url]”>http://www.northwestern.edu/about/facts/finances.html</a></p>


Honestly, I think they should’ve skipped a couple of those rennovations and torn down the Northwood building nearest to the Hubbard/Murfin intersection. Then make a high quality residence hall up there to make up being on North Campus.
Last year, I real jealous of people who got to live in Couzens/Alice Lloyd. Since not only were they on central, but the dorms seemed “too nice”.</p>



<p>You need to learn to read more carefully. Notice Notre Dame didn’t say its “endowment” reached $8.3 billion. It said its “endowment pool” reached that figure.</p>

<p>Similarly, Northwestern didn’t say its “endowment” reached $8.2 billion. It said its “endowment and other trust funds” reached that figure.</p>

<p>Both schools manage, in addition to endowment funds, “charitable remainder trusts”–a clever arrangement in which wealthy investor/donors entrust money to the school to manage for the investor/donors’ benefit during their lifetimes; the school gets the “remainder,” what’s left upon the investor/donor’s death. The investor/donor gets a guaranteed stream of income for life (usually around 5%) plus a present-year tax-deduction for the present value of the remainder being left to the university–which will be a fraction of the fair-market value of the money so invested, because the university doesn’t own the money outright, in fact it doesn’t get to use a nickel of it until the investor dies. Because the university doesn’t have complete control over these trust funds, it can’t be counted as “endowment.” But it can be counted in the “endowment pool” of invested funds (Notre Dame) or “endowment and other trust funds” (Northwestern).</p>

<p>In short, you’re comparing apples and oranges. To compare apples to apples, look at the annual NACUBO-Commonfund Study of Endowments (link below), which uses standard accounting methods to value each college and university’s actual endowment. As of the end of FY 2012, NACUBO had Michigan ($7.7 billion) comfortably ahead of both Northwestern ($7.1 billion) and Notre Dame ($6.2 billion) in actual endowment. There’s no reason to think either NU or ND overcame that gap between 2012 and 2013, though we’ll need to wait for the FY 2013 NACUBO figures to come out to be certain.</p>

<p>In the meantime, try not to let yourself be taken in by self-serving university PR spin.</p>

<p><a href=“http://www.nacubo.org/Documents/research/2012NCSEPublicTablesEndowmentMarketValuesRevisedFebruary42013.pdf[/url]”>http://www.nacubo.org/Documents/research/2012NCSEPublicTablesEndowmentMarketValuesRevisedFebruary42013.pdf</a></p>