Rounding out fiscal-year reports by the major universities, Princeton last Friday announced that it had earned a 21.9 percent investment return on endowment assets for the 12 months ended last June 30—just behind Stanford (22.4 percent), right in line with Yale (21.9 percent), and just ahead of Harvard Management Company’s 21.4 percent, reported on September 22.
Two institutions with smaller endowments had the best rates of return reported to date: Duke, with a 24.5 percent investment return, and the University of Virginia, at 24.3 percent. Virginia’s endowment—reflecting the investment earnings, in combination with additions from gifts and subtractions from disbursements for the operating budget—apparently became the first substantial fund to recover all of the losses from the 2008-2009 financial crisis, and to show growth to a new high value.
Of note at Princeton, the endowment appreciated 18.8 percent—close to the investment return—no doubt reflecting gifts received from that institution’s current “Aspire” capital campaign, and its relatively low current rate of disbursement for operations. Thus, the endowment’s value climbed from $14.4 billion to $17.1 billion during the fiscal year, a more vigorous rate of recovery than at Harvard and Yale—both up 16 percent for the year—and in line with Stanford’s 19.5 percent gain. Stanford is also conducting a large capital campaign. (Yale concluded its campaign last June, but it became more dependent on endowment funding than other schools, and therefore has had a higher spending rate, holding down growth in the endowment proper.)
Because disbursements to support academic operations depend on the value of endowment principal, that combined effect—strong returns and growth through gifts—is especially important in volatile economic times. Harvard’s fundraisers and capital-campaign planners have taken note.
