Dive Brief:
- An annual survey by the National Association of College and University Business Officers and Commonfund revealed more limited growth in the endowment investment returns of 2015 than the prior two years.
- Inside Higher Ed reports the 2.4% average growth rate includes a range correlated with investment size — colleges with endowments of more than $1 billion averaged 4.3% returns while those with endowments between $25 million and $50 million averaged 1.9%.
- A similar range applies to the portion of a school’s operating budget covered by the endowment — from 4.7% at the lower-resourced schools to 16.5% at those with the largest endowments.
Dive Insight:
Investment returns in 2013 and 2014 topped 10%, following up on a bad year in 2012, when the average institution lost money on its investments. In general, the NACUBO-Commonfund study has reflected the standard ups and downs of investing, showing both gains and losses in the short-term. In 2015, the low price of oil has affected stock markets worldwide, as has China’s slow economy.
Student and alumni success in pushing divestment efforts, including in the fossil fuel industry, could cause a disruption in institutional investments in the years to come. Stanford and Syracuse universities are among those that have wholly or partially divested from the fossil fuel industry. But then there was Swarthmore, which refused to do so last spring in the name of greater returns to benefit the institution.