Although the 2009 endowments and similar funds numbers are still being calculated, the University may raise its ranking among other colleges and universities throughout the country.
Set at more than $500 million in 2008, the Board of Governors and the Board of Trustees approved and established a new investment policy in June 2009 for the University’s endowment, said Vice President for Finance and Associate Treasurer Delanie Moler.
“Although the University’s investments were impacted negatively — down approximately 15.3 percent by the turmoil in the financial markets over the past year — our investment consultant believes Rutgers’s performance through June 30, 2009 will place us in the top quartile of college and university endowments, as measured by the annual National Association of College and University Business Officers study,” Moler said.
She said the study, which compares investment performance of close to 1,000 colleges and universities, is gathering information so the rankings will not be out for several months.
Students should care about the endowment because it has a direct impact on bolstering the University’s scholarships, encouraging research opportunities and hiring and retaining quality faculty, Moler said.
“Endowment expenditures are mainly applicable to student aid and instruction and departmental research,” she said. “These two areas account for approximately 85 percent of endowment expenditures.”
But Rutgers College senior Raguragava Sreetharan said while she understands the importance of the University’s $500 million endowment from 2008, she had difficulty trying to see it as anything more than an abstract number.
“It’s really not on the top of my mind. I see it as just like a number. I don’t have anything to connect with that number,” Sreetharan said. “I don’t realize that that’s where my student aid comes from. It’s just $500 million. I don’t know what they do with it.”
The University’s Web site states that the endowment is modest for a university of its size and complexity.
“While Rutgers has been a university since 1766, dedicated fundraising efforts were not formalized until the creation of the Rutgers University Foundation in 1973,” Moler said.
The Foundation raised more than $1 billion for Rutgers since its inception and only a portion of the money raised was contributed to the endowment, Moler said.
“Historically, much of the money raised for Rutgers was for current operations or capital projects,” she said.
The University is still in the process of calculating the 2009 number for “endowment and similar funds,” Moler said.
“The 2008 number is from consolidated financial statements, which have not yet been prepared for 2009. Therefore, we cannot provide the comparable number at this time,” she said.
In 2005, the University adopted the “Statement of Investment Objectives and Guidelines,” which lists policies and objectives regarding the endowment.
Based on the statement, the University’s annual spending policy is to spend an amount not to exceed 4.5 percent of a trailing 13-quarter average of the endowment’s market value. The long-term investment objective for the endowment is to attain an average annual real total return on investments of at least 5 percent, as measured over rolling five-year periods.
The new investment policy statement defined the roles and responsibilities for the various parties involved in the management of the investments, outlined investment philosophy, expanded the list of permissible investments and indices, clarified return objects and defined impermissible investments.
A copy of the policy can be located in the University’s Policy Library, policy number 40.2.14.
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