mtrout wrote:How do you lose 8% in 2016 fiscal year? Are they day trading penny stocks with it?
Obviously, this article is premature. For fiscal year 2015, the NACUBO listed 95 schools with endowments over $1 billion. Of those 95 Universities, two were in Canada; therefore, 93 U.S. universities reported endowment assets over $1 billion in 2015. The cited article focuses on the first 25 private universities to report their numbers for fiscal year 2016, but ignores the performance of approximately 68 other U.S. universities. So, other universities with endowments over $1 billion may eventually show worse results, on a percentage basis, than SMU.
The SMU endowment's fiscal year ends on May 31st, but they apparently report the balance at June 30th to the NACUBO. The Second Century Campaign ended on December 31, 2015. We don't know the dollar amount of contributions collected between July 1, 2015 and December 31, 2015. It could be that most of the endowment gifts (scholarships, chairs, professorships, programs, etc.) were funded before July 1, 2015, and the later gifts were designated for different purposes. Also, the pace of contributions could have tapered off towards the end of the campaign. Regardless, the endowment numbers reported for the period ending June, 30, 2016 only overlapped with the Second Century Campaign for six months.
SMU reported that its endowment balance grew by $81.4 million between May 2014 and May 2015, from $1.423.6 billion to 1.505 billion. During that period, gifts were contributed in the amount of $40.2 million which should remain part of the endowment. We are then told that endowment funds grew at a rate of 6.18% over the period. Of course, we don’t know the timing of the contributions or distributions. If we take the average of the beginning and ending endowment balance we get $1.464.3 billion. If we then apply the 6.18% rate of return to the average balance ($1.464.3 x 6.18%) we get $90.49 million in estimated earnings. The endowment, however, made distributions to the University of $60.2 million, or approximately 66% of estimated earnings. The $60.2 million distribution accounted for 16% of the University’s revenue sources for the year.
Therefore, the increase/decrease in the endowment is a combination of earnings, gifts to the endowment and distributions to the university. Earnings could have been positive, but distributions to the University could have exceeded gifts and earnings. We won’t know exactly what happened until SMU issues its next report.
https://issuu.com/smudallas/docs/smu_annualreport_2015/41