The endowment also holds funds designated by the Board of Trustees to act as endowment, the income on which is used to support University needs.. Endowment and quasi-endowment funds are
Trang 1ENDOWMENT
PERFORMANCE
this year, has given the college a distinct advantage over most other independent liberal arts institutions This is especially true when considering the onerous fnancial strains on higher education caused
by the current global pandemic The cost of providing a safe and healthy environment for living and learning has increased dramatically And at the same time, many families’ ability to pay for their student’s college education diminished as a result of coronavirus
Many good schools, especially those highly dependent on tuition dollars, have found it increasingly difcult to deliver their students and faculty the support they need By contrast, with its high endowment per student, Denison has continued to maintain and increase that support throughout this challenging period From research to athletics “ Attending college
to the arts and beyond, our college continues to can make a huge thrive Especially notable is Denison’s ability to diference in a provide crucial fnancial aid and exceptional person’s life, but career resources when they are needed most attending a place
Success breeds success, and Denison is currently like Denison can experiencing unprecedented success in the area do something
of admissions, which is another distinction that extraordinary ”
few colleges can claim these days Ebony ’20
All of these achievements are clearly the direct result of your investment
in Denison’s endowment, and we all are exceedingly grateful
T he Denison endowment consists of approximately 1030 individual
endowed funds, many of which carry donor restrictions Donor restricted endowments generally are made so that annual income earned by the gift can support a specifc activity such as fnancial aid
to students or to support an academic department or professorship in perpetuity While some endowments are restricted as to their use, others are given without restrictions
The endowment also holds funds designated by the Board of Trustees
to act as endowment, the income on which is used to support University needs However, Board designated endowment (or quasi-endowment as
it is sometimes called) is unrestricted as to purpose The Board may vote
to spend the principal portion of quasi-endowment at any time
Endowment and quasi-endowment funds are invested together with University capital reserves and other smaller pools of capital in the University’s Long Term Investment Pool (LTIP), which is managed by the Denison Investment Ofce For investment purposes, individual endowment funds are treated as one pooled fund, and they own units (or shares) in the pool, similar to a mutual fund
Trang 2At June 30, 2020, the Long Term Investment Pool
was valued at approximately $914 million The
components of the LTIP are shown in the table below
INVESTMENT GUIDELINES
Investment Office staff operate under a delegation
of authority from the Board of Trustees and the
Investment Committee of the Board The governance
structure and the principal investment guidelines are set
forth in an Investment Policy Statement (IPS) approved
by both the Investment Committee and Board The
IPS sets forth the overall investment objectives and
guidelines to be observed in managing the LTIP assets
and provides a framework for both the Investment
Committee and Investment Office staff within which
to operate The IPS also sets forth the most recently
approved Policy Portfolio, which identifies the asset
class target weights and target ranges approved by the
Board
ASSET ALLOCATION
A primary objective in the IPS is to maintain a
well-diversified portfolio Investing across multiple asset
classes is the key to growing the endowment and
managing risks appropriately The Policy Portfolio
supports this by calling for investments to be allocated
across major asset classes Over the long run, the
allocation of the portfolio among these asset classes
may be the single most important determinant of the
fund’s investment performance
MARKET VALUE OF THE LONG TERM POOL
Endowment 582,420,200 Board Designated / Quasi Endowment 235,852,154
Capital Reserve Funds 91,501,979 Charitable Annuities 2,055,100 Denison University Research Foundation 2,474,094
$914,303,527
As of June 30, 2020, the Policy Portfolio refected the following target allocation to the major asset classes:
Cash: 2%
Fixed Income: 3%
Public Equities: 22%
Absolute Return: 41%
Private Equity: 20%
Real Assets: 12%
PORTFOLIO PERFORMANCE
The return on the LTIP as of June 30, 2020, is as follows These fgures are annualized and represent the net
return, after taking into account investment manager fees and expenses The policy portfolio is a weighting of the individual asset class benchmarks approved by the Board of Trustees as part of the policy portfolio, which
is documented in the Investment Policy Statement
1 year 3 year 5 year 10 year
Policy Benchmark 0.5 5.1 4.9 7.2
diference 4.3% 2.7% 1.0% 1.7%
SPENDING RULE
The Board of Trustees has established an endowment spending policy that attempts to achieve the proper balance between supporting the University’s present and future needs – i.e., supporting current students and annual operating budgets while preserving the real value
of the endowment and its long term purchasing power
to support future generations
The current spending rule provides an annual cash fow
to the operating budget This operating cash fow is determined under a calculation of spend per unit of the LTIP, which is weighted 70% on the infation adjusted level of the prior year’s spending level and 30% on a market value of the endowment
at a 5% spend rate
“ Your generosity allowed me the opportunity for a summer internship that gave me a sense of direction and purpose as I enter my senior
year I have been continually astounded by the support and generosity
of the Denison community My internship experience is another story
I get to share when people ask me why the family of Denisonians is so special to me I am so looking forward to the day where I can support future Denisonians the way you have supported me Thank you! ”
Abby ’21