Endowment Highlights

As of June 30, 2000, the market value of all endowments held by the Virginia Tech Foundation, Inc., including pledges to endowments, totaled $368 million, an amount that was held in 1,926 individual accounts. Of the total endowment, $343 million is invested in the foundation's pooled consolidated endowment fund, while $25 million is held separately in real estate partnerships, notes, deeds of trust, and contributions receivable, as well as other corporate securities. Endowment value per full-time student surged to more than $14,000, a record and an increase of more than 200 percent over the past decade.

The June 30 allocation of the foundation's pooled endowment fund consisted of 48.7 percent U.S. equity, 15.8 percent non-U.S. equity, 8.4 percent real estate, 2.5 percent alternative assets, 20.6 percent U.S. bonds, and 4.0 percent cash and equivalents. The fund achieved an 8.4 percent return over the trailing one-year period and an annualized return of 11.6 percent over the trailing 10-year period.

The overriding principle of the foundation's consolidated endowment program is simple: funds should be managed so that a gift today will fund a donor's objective in perpetuity. For example, if a benefactor wants to endow a scholarship, the money is managed to maintain the real value of the endowment and keep pace with inflation.

Each gift entering the consolidated endowment fund purchases units analogous to shares in a mutual fund. A payout-per-unit is determined each fiscal year, and payments are made on a quarterly basis.

Once a year, the payout rate is adjusted by the annual change in the Consumer Price Index. In an effort to maintain the purchasing power of the consolidated endowment pool, upper and lower boundaries are determined for total spending using historical real-return data. The foundation's policy increases endowment support at a steady pace to assure annual increases of at least the rate of inflation, or greater.

A three-year average is used to smooth out the unit values when determining if spending falls between the upper and lower boundaries. Without this moving average, funding might dramatically rise in one year, then fall drastically the next, leaving the beneficiaries of the endowments vulnerable to increased volatility in the financial markets.

Decisions on how to manage the foundation's consolidated endowment pool are made by its investment committee, which chooses money managers with philosophies consistent with the objectives of long-term growth embodied in the mission of the consolidated endowment program. To completely diversify its portfolio, the foundation employs several management firms offering a variety of asset classes and investment styles.

Endowment Value Per Full-Time Student

Endowment Purpose

A. Scholarships	$168,752,200	45.8%
B. Professorships	$61,986,717	16.9%
C. Other	$137,457,662	37.3%
Total Market Value	$368,196,579	100.0%

Endowments at Market Value

June 30, 2000

College or Area	Total	Scholarships	Professorships	Other
Agriculture	$19,877,304	$7,495,278	$5,797,525	$6,584,501
Architecture	3,556,187	1,392,048	1,547,851	616,288
Arts & Sciences	19,683,759	6,070,012	6,118,068	7,495,680
Business	44,031,299	14,221,891	13,126,168	16,683,240
Engineering	48,076,507	17,228,259	24,086,130	6,762,119
Natural Resources	10,516,017	2,720,988	4,439,240	3,355,789
Human Resources and Education	3,150,968	2,324,402	157,019	669,546
Veterinary Medicine	16,401,561	8,576,516	4,216,516	3,608,529
Athletics	25,239,447	24,978,157	0	261,290
Extension	3,472,756	566,389	0	2,906,367
General	106,094,238	55,500,559	2,498,200	48,095,479
Other Agency	7,298,412	117,286	0	7,181,126
Pratt/Animal Nutrition	23,325,078	6,297,771	0	17,027,307
Pratt/Engineering	22,539,474	21,187,106	0	1,352,368
Quasi-Endowment	14,933,571	75,538	0	14,858,032
Total Endowments	$368,196,579	$168,752,200	$61,986,717	$137,457,662