Endowment Highlights
As of June 30, 2003, the market value of all endowments held by the Virginia
Tech Foundation Inc., including pledges to endowments, totaled $331.3 million,
an amount that was held in 2,040 individual accounts. Of the total endowment,
$312.5 million is invested in the foundation’s pooled consolidated endowment
fund, while $18.8 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 $11,821 for the same time frame.
The June 30 allocation of the foundation’s pooled endowment fund consisted
of 42.3 percent domestic equity, 15 percent foreign equity, 6.2 percent real estate,
10.9 percent in hedge funds, 4.2 percent alternative equity, 19.3 percent U.S.
bonds, and 2.1 percent cash and cash equivalents. The fund achieved a 3.3 percent
return over the trailing one-year period and an annualized return of 7.1 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, whose main focus is the asset allocation
of the fund and establishing spending policy. More than 90 percent of a fund’s
return is determined by its asset allocation versus individual money managers.
An endowment consultant is retained to assist the investment committee with asset
allocation decisions, the selection and retention of managers, performance monitoring,
and related endowment policy issues. To completely diversify its portfolio, the
foundation employs a large number of management firms offering a wide variety
of asset classes and investment styles.
Endowments at Market Value
June 30, 2002
| College or Area |
Total |
Scholarships |
Professorships |
Other |
| Agriculture & Life Sciences |
$15,244,988 |
$6,571,865 |
$3,695,426 |
$5,031,698 |
| Architecture & Urban Studies |
3,410,792 |
1,658,733 |
1,198,105 |
553,954 |
| Arts & Sciences |
10,474,170 |
3,619,008 |
4,880,781 |
1,974,381 |
| Business |
41,930,084 |
17,173,573 |
11,311,478 |
13,445,033 |
| Engineering |
46,394,384 |
21,250,809 |
19,228,617 |
5,914,958 |
| Natural Resources |
10,499,328 |
2,248,909 |
3,779,800 |
4,470,619 |
| Liberal Arts and Human Sciences |
5,428,743 |
4,012,767 |
3,779,800 |
4,470,619 |
| Veterinary Medicine |
13,350,219 |
6,611,700 |
2,572,004 |
4,166,515 |
| Athletics |
23,288,426 |
22,733,955 |
0 |
554,471 |
| Extension |
5,048,616 |
741,430 |
0 |
4,307,185 |
| General |
94,893,499 |
40,091,557 |
1,652,303 |
53,149,640 |
| Other Agency |
6,730,918 |
85,953 |
0 |
6,644,965 |
| Pratt/Animal Nutrition |
17,944,019 |
6,99,314 |
0 |
10,944,705 |
| Pratt/Engineering |
16,840,146 |
14,228,576 |
0 |
2,611,570 |
| Quasi-Endowment |
9,639,541 |
0 |
0 |
9,639,541 |
| VTCCA |
10,193,231 |
10.054,184 |
0 |
9,639,541 |
| Total Endowments |
$331,311,105 |
$158,028,334 |
$48,439,308 |
$124,843,463 |
Endowment Value per Student
| Year |
Endowment
Market Value |
Value
per Student |
| 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 |
| 2003 |
331,311,105 |
12,831 |
|
|
Endowment Purpose
June 30, 2003
| A. Scholarships |
$153,028,334 |
47.7% |
| B. Professorships |
48,439,308 |
14.6% |
| C. Other |
124,843,463 |
37.7% |
| Total Market Value |
$331,311,105 |
100.0% |
|
