Description of the Endowment

The Dickinson Endowment has two distinct areas, pooled and non-pooled assets.  Pooled assets are directly controlled by the Committee on Investments of the Board of Trustees.  Non-pooled assets are comprised of various funds with specific investment objectives that the college does not manage, but the college receives support from some of the returns on a given basis. In 2006, Dickinson partnered with Investure LLC to manage the College’s pooled endowment. During the fiscal year 2010, Dickinson outperformed many institutional benchmarks with a 16.1% return, net of fees.  The College is very proud to be able to create value with its endowment while maintaining a unique perspective.

Dickinson College approaches its finances from a Triple Bottom Line perspective, i.e., the management of three bottom lines or net business outcomes: financial, social, and environmental.  The College Endowment is utilized to fund an extraordinary amount of social and environmental projects, many of which are aimed to support our local community and decrease our environmental footprint. 

Dickinson is a national leader in sustainability initiatives (2011 Green Report Card, Sierra Club ranking), and continues with a progressive approach to its endowment.  For instance, in the 2010 Green Report Card, the College improved from B to A in the category of Endowment Transparency.  Equally as exciting, the College is becoming increasingly conscious of its investments.  For instance, as of June 2010, Dickinson approved an initial $3 million allocation to the Sustainable Investments Initiative, which will be managed by Investure LLC.  The fund is planned to reach over $80 million.

Investment Strategy
 

From an investment strategy perspective, the Committee on Investments seeks to partner with investment managers who espouse a “preservation of capital” investment philosophy. The endowment assets are managed with the objective of generating a total return sufficient to cover spending in support of programming; to preserve the purchasing power of the endowment over the long run, that is, to exceed inflation; and to provide consistent support for academic and residential programming that grows both in dollars and as a percentage of the operating budget.

Because the College has been successful in achieving this goal, spending from the endowment – for financial aid, faculty salaries, benefits, library resources, facilities operations and the like – has become an increasingly large percentage of funding for the operating budget. Ten years ago, $4.4 million, or less than 8% of operating revenue, came from endowment spending. For FY12, the endowment is expected to provide $9.8 million or 9.2% of budgeted revenue. The portfolio is broadly diversified among geographic locations and asset classes and has a tilt toward equities and equity-like investments.

Asset Allocation
The College’s investment guidelines are based on a long-term investment horizon in accordance with the College’s status as a perpetual entity. The investment portfolio’s target asset allocation is based on this long-term perspective. With this perspective, the greatest threat to the investment portfolio and the value it provides to the College is a reduction in the purchasing power of the portfolio in inflation adjusted terms.

To achieve its investment objectives, the Endowment shall be invested in equity, debt, and alternative asset classes. The Committee on Investments retains the authority to determine the overall target allocation between these asset classes.

The Endowment will be diversified by geography and across the capital structure (e.g., bonds and stocks) and liquidity and leverage will be monitored carefully. The purpose of diversification is to provide reasonable assurance that no single security or strategy will have a disproportionate impact on the Endowment.

Following asset reallocations in spring 2009, the College’s only directly invested equity portfolio was closed and funds were moved into fund of funds structures developed by Investure. As a result, the entire pooled endowment is now invested in mutual funds. Of the remaining non-pooled assets (deferred gifts, other endowment funds, funds held in trust by others, and pledges receivable), all are held in mutual funds, pooled fund investments or real estate, with the exception of pledges receivable.

Investment performance
The College’s overall performance objective is to generate sufficient returns to support current operating needs while maintaining the long-term purchasing power of the endowment fund. Historical averages indicate that an annual return between 8-10 percent is needed to provide adequate support for operations while protecting against inflation and covering investment management fees over the long term. An additional goal is to generate return which exceeds the measure of inflation, achieving “real” growth of the endowment. 

Social and Community Support  
Dickinson is committed to engaging the world and the local community; it’s part of our ‘triple bottom line’ philosophy.  The College has remained committed to supporting Carlisle, Dickinson’s home, in many ways.  A vast amount of this support is financed from the College Endowment. Recently, Dickinson voluntarily paid over $330,000 in property tax, of which over 95% stayed in Carlisle.  Additionally, the College has provided a $100,000 contribution to fund Carlisle’s “High-I” initiative.  This project is designed to create retail revitalization of two blocks adjacent to campus.  During fiscal year ’11, Dickinson will continue supporting this initiative by providing $13,200 for training retail coordinators.  Dickinson College values its interdependent relationship with the Carlisle community, and will continue to work for an even better future.

Environmental Consciousness   
The College Endowment has provided many opportunities and successful projects for lowering its environmental footprint.  Recent projects, such as the $6 million high efficiency central energy plant, were financed by leveraging Dickinson’s pooled Endowment.  The new Rector Science Complex, a LEED Gold certified building, was a $34 million project and financed through the Endowment.  The College Endowment will continue to fund vital initiatives designed to lower Dickinson’s environmental footprint.