Capital Region

Local colleges see (slower) endowment growth

Union College has seen is enrollment grow.
Union College has seen is enrollment grow.

The endowment wealth of Union and Skidmore colleges continued to grow last year, albeit more slowly than the prior year, according to recently filed financial statements.

Union’s endowment grew by 6.7 percent, to more than $456 million, between July 1, 2017, and June 30, 2018. Skidmore’s endowment grew by 4.5 percent, to more than $379 million over the same period.

Union’s endowment growth was enough to lift it above a level last reached in June 2015, just over $440 million. The fund lost more than 10 percent of its value the following year.

The local endowment gains mirrored growth experienced by colleges across the country: College endowments grew, on average, about 8 percent last year, according to analysis of more than 800 colleges by the National Association of College and University Business Officers and investment firm TIAA.

The growth rate of the country’s college endowments slowed compared with the budget year that ended June 2017, when both Union and Skidmore saw their endowments grow by about 10 percent.

The analysis showed endowments trended up last year but were still behind long-term growth targets. It also highlighted increased spending from endowments, which are managed to supplement ongoing expenditures while preserving and growing institutional wealth over time.

“We remain concerned, however, about the below-target long-term rates of return, which have made it much more difficult for colleges and universities to increase endowment spending to support their missions,” said Association of College and University Business Officers President Susan Whealler Johnston, in a prepared statement.

Union utilized about $21 million in endowment gains to cover spending in the 2017-18 budget, about $40,000 less than the prior fiscal year.

Union and Skidmore ranked among the top 250 largest endowments in the country, according to the study. Officials at the schools were relieved in 2017 when changes to the major Republican tax overhaul spared the colleges from a new endowment tax, which in its final version targeted only the nation’s wealthiest colleges – those with multi-billion-dollar endowments.

Still, higher education officials across the country feared the precedent created by taxing any college endowments.

Categories: News, Saratoga County, Schenectady County

Leave a Reply