The purpose of an endowment is to provide a common source for new and existing funds to be collected, invested and grown, and to maintain the institution for future generations by establishing a secure financial health. Institutions use the investment returns for various financing expenses and balance the use between current and future spending needs. It is a strategic goal to only use a portion of these returns in order to avoid diminishing the endowment corpus over time.
The College has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor-restricted funds that the College must hold in perpetuity or for a donor-specified period, as well as board-designated funds. Under this policy, as approved by the Board of Trustees, the endowment assets are invested in a manner that is intended to produce results that exceed the endowment spending rate plus inflation, defined as the Consumer Price Index plus 1 percent, while assuming a moderate level of investment risk. To manage volatility, the spending rate is calculated on a 12-quarter moving average of the endowment’s fair market value.
To satisfy its long-term rate of return objectives, the College relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). The College targets a diversified asset allocation that places a greater emphasis on equity-based investments to achieve its long-term risk-adjusted return objectives within prudent risk constraints.
Through June 30, 2016, the College’s 10-year average endowment returns were 6.7 percent. While 1-year returns were disappointing, we continue to focus on our long-term goals to manage and grow the endowment. The College participates in the NACUBO-Commonfund Study of Endowments survey each year, which gives us the ability to benchmark endowment returns and other key metrics with peer institutions. The 2015 NACUBO-Commonfund Study of Endowments placed Dickinson in the 93rd percentile (top 7 percent) of over 550 reporting colleges and universities for 10-year average returns. The results of the 2016 survey will not be available until February 2017.
Division of Responsibilities
- Board of Trustees - The Board of Trustees appoints members of the Committee on Investments and designates the Chairperson. The Chairperson of the Committee on Investments reports periodically to the Board of Trustees on the status of the investments of the College and on the policies and practices of the Committee.
- Committee on Investments
- Investment Office
Sustainability and the Endowment
The endowment's role as an investment in sustainability is further explored within the Sustainability section of our website.