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As of June 30, 2002, the market value of all endowments held by the Virginia Tech Foundation, Inc., including pledges to endowments, totaled $328.7 million, an amount that was held in 2,315 individual accounts. Of the total endowment, $308.26 million is invested in the foundation's pooled consolidated endowment fund, while $20.4 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 was at $12,684 for the same time frame.
The June 30 allocation of the foundation's pooled endowment fund consisted of 39.2 percent U.S. equity, 16.4 percent non-U.S. equity, 7.4 percent real estate, 10.0 percent in hedge funds, 3.1 percent alternative assets, 22.3 percent U.S. bonds, and 1.6 percent cash and equivalents. The fund achieved a -5.8 percent return over the trailing one-year period and an annualized return of 8.3 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, and a payout-per-unit (or dividend) is paid quarterly. In an effort to maintain the endowment's purchasing power, the payout rate is adjusted annually to reflect the change in the Consumer Price Index over the preceding calendar year. Historical investment return data is used to determine upper and lower boundaries for total spending. 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 equity and fixed income 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. An endowment consultant is retained to assist the investment committee with decisions regarding the overall asset allocation of the fund, the selection and retention of managers, and related endowment policy issues. To completely diversify its portfolio, the foundation employs several management firms offering a wide variety of asset classes and investment styles.
June 30, 2002
| College or Area | Total | Scholarships | Professorships | Other |
|---|---|---|---|---|
| Agriculture | $15,222,233 | $6,491,526 | $3,849,558 | $4,881,149 |
| Architecture | 3,120,836 | 1,392,952 | 1,248,517 | 479,367 |
| Arts & Sciences | 17,704,257 | 6,030,641 | 5,082,636 | 6,590,980 |
| Business | 41,397,699 | 16,514,030 | 11,207,450 | 13,676,219 |
| Engineering | 46,860,432 | 21,243,124 | 19,942,705 | 5,674,603 |
| Human Resources and Education | 3,149,572 | 2,495,057 | 125,878 | 528,637 |
| Natural Resources | 11,045,854 | 2,360,787 | 3,651,338 | 5,033,729 |
| Veterinary Medicine | 12,844,116 | 6,546,214 | 2,106,536 | 4,191,366 |
| Athletics | 22,965,630 | 22,120,546 | 0 | 845,084 |
| Extension | 4,886,688 | 481,070 | 0 | 4,405,618 |
| Corps of Cadets | 9,876,942 | 9,737,815 | 0 | 139,127 |
| General | 86,726,099 | 37,539,958 | 1,721,825 | 47,464,316 |
| Other Agency | 6,768,259 | 89,569 | 0 | 6,678,690 |
| Pratt/Animal Nutrition | 18,699,030 | 4,674,758 | 0 | 14,024,272 |
| Pratt/Engineering | 17,425,928 | 15,857,594 | 0 | 1,568,334 |
| Quasi-Endowment | 9,986,354 | 0 | 0 | 9,986,354 |
| Total Endowments | $328,679,929 | $153,575,641 | $48,936,443 | $126,167,845 |
| Year | Endowment Market Value | Value per Student |
|---|---|---|
| 1990 | $120,170,954 | $5,243 |
| 1991 | 131,195,712 | 5,615 |
| 1992 | 147,933,178 | 6,187 |
| 1993 | 168,058,641 | 7,110 |
| 1994 | 169,304,165 | 7,094 |
| 1995 | 205,138,585 | 8,593 |
| 1996 | 244,537,663 | 10,329 |
| 1997 | 285,704,195 | 11,515 |
| 1998 | 331,013,180 | 13,129 |
| 1999 | 340,243,732 | 13,287 |
| 2000 | 368,196,579 | 14,281 |
| 2001 | 359,527,534 | 14,020 |
| 2002 | 328,679,929 | 12,684 |
June 30, 2002
| A. Scholarships | $153,575,641 | 46.7% |
| B. Professorships | 48,936,443 | 14.9% |
| C. Other | 126,167,845 | 38.4% |
| Total Market Value | $328,679,929 | 100.0% |