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UI endowments exceed national average

BY CHASTITY DILLARD | NOVEMBER 09, 2011 7:20 AM

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The University of Iowa's endowment programs exceeded the national average during fiscal 2011, according to a preliminary report.

Nationally, university and college endowments saw an average increase of 19.8 percent in fiscal 2011, according to the preliminary report created by the National Association of College and University Business Officers and the Commonfund Institute.

However, University of Iowa officials said their endowment gains for the fiscal year saw a hike of 28.2 percent — a combination of contributions to the UI and the UI Foundation.

Despite the rise, the report suggests institutions will have to wait a while to regain losses from the 2008 to 2009 credit crisis.

Tiffani Shaw, the chief operations officer for the UI Foundation, said the foundation is very pleased with the returns.

"We just had a very good year," she said. "The market is always going up and down, but over the long term is the way that we invest money."

Gifts to an endowment fund are invested based on the foundation's asset allocation. each year, approximately 5 percent of the endowment, or $50 million, is spent by the UI according to donor intent.

Shaw attributed the good performance to a diversified asset-allocation strategy — meaning the foundation invests endowed monies in numerous sources.

And both the UI and the UI Foundation continue to maintain an endowment level slightly exceeding $1 billion, Shaw said.

William Jarvis, managing director and head of research in the Commonfund Institute, said there have been a couple years of return, but the real challenge is the initial loss.

If an institution has $100, but loses 50 percent, that's $50 for next year, he said. But if the institution gains 50 percent for the next year, the amount is now $75.

"Institutions can control some things," Jarvis said. "It's a possibility but not a certainty. Most would say the only way to increase return is to increase risk, and no one is really in the mood for that."

But some schools, such as Iowa State and University of Northern Iowa, maintain a positive outlook.
University of Northern Iowa Foundation Vice President for Financial Services, Kristi Even, said they are seeing the same result.

"[The endowments] haven't fully recovered," she said. "We still have a number under water."

UNI Foundation saw a gain of 18.45 percent— just slightly below the national average.

"We haven't necessarily changed our strategy," Even said, noting that recovery is close for the foundation. "We continue to meet with our invest finance committee to review our finance allocations."

But Iowa State Foundation officials said there was a higher combined growth of 20.5 percent for the 2011 fiscal year.

Lisa Eslinger, the senior vice president for finance and operations for the Iowa State Foundation, said endowment levels have reached $612 million — up from June 2008's $550 million.

"We were fortunate enough to do a little bit better than the other institutions," said Eslinger. "We have actually come back from where we were in 2008."


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