Generous gifts of endowment from alumni, parents, faculty and friends—and careful stewardship of their investments—are a vital component of Saint Mary's financial stability.
What is the endowment?
The endowment is composed of assets that are invested for the long term to support the College's educational purposes. As the cornerstone of the College's financial stability, the endowment provides program support funding that is not dependent upon enrollment, tuition or annual giving.
The College's endowment consists of approximately 300 individual funds established to support scholarships, professorships, programs and College priorities. It includes both donor-restricted assets and assets designated by the Board of Trustees to function as endowment.
Donors gifts made to the endowment buy "units" in the College's endowment investment pool. This pool operates similarly to a mutual fund -- the value of untis changes quarterly based on investment returns.
How large is Saint Mary's endowment?
As of March 31, 2011, the endowment market value has grown to $133.7 million. The increase in endowment is welcome as it follows the negative impacts of the credit crisis and recession, which resulted in two consecutive years of endowment decline. These negative impacts also spurred the Investment Committee of the Board of Trustees to adopt on a short-term basis a more conservative mix of investments in order to preserve the endowment's value. The College has recently been transitioning away from the more conservative investment mix toward longer-term targets which should help assure continued endowment growth over time.
How does the College invest its funds?
The College invests endowment funds following an asset allocation model which distributes investments over eight major asset categories, including U.S. equities, non-U.S. equities in both developed and emerging markets, private equity, core fixed income, cash equivalents, private real estate, and real estate investment trusts. Actual investments within these categories are made with multiple investment managers upon recommendation from the College's investment consultant, Wilshire Associates, and upon approval of the Investment Committee of the Board of Trustees. College financial staff, Wilshire Associates staff and the Investment Committee monitor the performance of individual managers and make adjustments as necessary.
How much does the endowment provide in operating funds annually?
The endowment provided $6.4 million of 6.1% of the College's $105.7 million operating budget for fiscal year 2010-11.
Is there an optimal size for the College's endowment?
Endowment goals are often expressed as a multiple of an institution's budget. The optimal size for our endowment is $317.1 million, or three times the size of last year's operating budget of $105.7 million. At this higher level of endowment, support of the operating budget would grow from 6.1% to 15.0% of total revenues.
What are the benefits of giving to the endowment rather than giving to current expenditures?
Both types of gifts are important to the College. The full amount of an annual or major gift provides support for a particular program or student for a limited period of time, typically one year. An endowment gift, in contrast, provides an ongoing and typically increasing level of support in perpetuity, although the amount available for annual use -- at least initially -- is much less. For example, a one-time gift of $100,000 will provide 20 $5,000 scholarships in one year. That same gift invested in the endowment will provide one $5,000 scholarship in the year after it is received, but will be awarded in perpetuity. Over time, the value of the endowed scholarship fund will grow as the overall endowment grows.
To learn more about the opportunities and rewards of establishing an endowment at Saint Mary's, please contact Carolyn Otis Catanzaro at (925) 631-4914. She is experienced in planning gifts to meet each donor's personal circumstances and can provide detailed information on Saint Mary's endowment options and guidelines.