What is an endowment?
The University of Massachusetts endowment is an accumulation of funds, primarily gifts with donor-designated purposes, set aside and invested to support the University's teaching and research missions in perpetuity. To date, thousands of donors from the University's five campuses who have wanted to provide enduring support for UMass have made gifts. Each year, a fixed percentage of the funds' market value flows to the University operating budget from interest and investment appreciation, providing an important source of support for each of the University's five campuses.
Who is on the Investment Committee?
The University is fortunate to have a talented and committed group of alumni, parents and friends who are accomplished investment professionals who volunteer their time to provide counsel on strategy and investments. We also receive solid insight and guidance from our paid advisor Morgan Stanley.
What is the goal of the investment strategy of the Investment Committee of the University of Massachusetts Foundation?
Our committee mandate is to invest the University endowment in assets that will grow at a rate greater than inflation so that the spending power of our endowment over time continues to grow.
The UMass endowment has grown significantly over the past ten years, but we have much further to go. At the close of fiscal year 2008, our endowment stood at $350 million, which placed us in the top quartile of the 785 universities that reported their endowments.
How much of the University's budget is provided by the endowment?
Only about .5% of the University's budget is supported by the endowment currently. Aggressive growth of the endowment can help the University to secure enduring support for important initiatives including academic and campus life programs, financial aid, and facilities support.
Why do we need a larger endowment?
President Wilson, the chancellors, and the trustees have identified as a priority the need to increase the size of the University's endowment for three critical reasons:
- To maintain access to UMass for the most talented students regardless of their ability to pay. In 2007, UMass provided scholarship aid totaling approximately $85 million and met 91% of resident undergraduates' need. Since 2002, the University has increased total institutional financial aid by $50 million over the past five years, an increase approaching 150 percent. This is an extraordinary commitment to students because these funds must also support day-to-day operating expenses-from salaries and benefits to utilities and insurance. In order to continue to maintain-and hopefully to increase-our commitment to affordability, we must support a greater percentage of scholarship aid with endowment income.
- To help ensure that UMass is able to achieve excellence in our education and research programs. In order for the University to sustain and build its research competitiveness and to create a robust and well-supported environment that is an attractive destination for the best faculty members, income from endowment gifts designated for support of research and education initiatives must be available. Innovation is the engine, not only of our economy, but of our University. Research at the intersections and frontiers of academic disciplines is the foundation for excellent teaching and learning experiences for our students. Neither is possible without sustained support from endowment funding.
- To continue attracting the highest caliber faculty and students. It is crucial to attract and retain the best people in order to advance knowledge and educate students who will compete and lead in our global economy. We owe it to the people of our Commonwealth and our nation to support and advance the very best public University system possible.
How is the endowment doing in our tough markets?
Our advisor, staff, and investment committee volunteers have worked diligently to protect the assets of the UMass endowment. The asset allocation is of the pooled investments are guided by disciplined longer term investment objectives and strategies that will accommodate relevant, reasonable or probable events. Recent events have presented significant challenges to all investors-institutional and individual alike. The UMass endowment has performed, on a relative basis, in the top tier of University endowments and continues to do so through the nation's most recent economic challenges.