University Foundations in Iowa Earn Double-digit Returns on InvestmentsOctober 30, 2007 |
DES MOINES Iowa
The state’s three public university endowments earned double-digit returns on investments last fiscal year, foundation records show.
But despite the growth, the University of Iowa Foundation endowment fell short of its goal for the second straight year.
Investment returns at Iowa, Iowa State and Northern Iowa ranged from almost 17 percent to 18.3 percent for the year that ended June 30.
The larger the return the more money a foundation can give for scholarships, salary supplements and programs.
The Iowa State Foundation endowment, valued at $436 million, had the highest return rate at 18.3 percent, surpassing its goal of 17.3 percent.
“We’re very pleased with our results,” said Lisa Eslinger, vice president for finance at the foundation.
She said the foundation benefited by putting more money in emerging markets, such as China, India and Brazil.
The University of Iowa Foundation endowment was valued at $692.2 million but had the lowest rate of return among the three university foundations at 16.9 percent, missing its benchmark of 17.1 percent.
Tiffani Shaw, chief financial officer for the Iowa Foundation, said its investment team added international investments in fiscal year 2007, but was not vested enough to fully benefit from the jump in those investments.
The University of Northern Iowa Foundation endowment saw a return of 17.4 percent exceeding its goal of 15.3 percent and finished fiscal year 2007 valued at $55.8 million.
Iowa spent 5 percent of its endowment in fiscal year 2007, while Iowa State spent 4.6 percent and Northern Iowa spent 3.24 percent. The foundations use different formulas for determining payouts, but they usually involve an average of several years.
Drake University, a private college in Des Moines, had a $153.3 million endowment at the end of fiscal year 2007 and spent 5 percent of its endowment, said Victoria Payseur, vice president of business and finance.
She said she doesn’t favor a minimum payout because some years the market is down and endowment managers must maintain the fund’s value.
“You don’t always have years when the market is strong,” Payseur said. “You have to balance between current students and future students.”
Information from: The Des Moines Register, http://www.desmoinesregister.com
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