Furman University Fiscal Year 2020 Endowment Financial Report

FISCAL YEAR 2020

ENDOWMENT FINANCIAL REPORT

A Message from the Vice President Dear Friends, Pandemic. Unprecedented. Pivot. Zoom. Mask. Quarantine. Virtual. A word cloud from 2020 undoubtedly would highlight our unique vocabulary from this past year. In spite of the uncertainty, loss, polarization, and despair that at times seems to completely cloud our view, I would offer an alternative list of words. Optimism. Resilience. Innovation. Community. Above all others …

Gratitude.

Gratitude for our students and the care and responsibility they showed each other, their faculty and the staff. Gratitude for faculty who adjusted and reimagined their teaching and classes.

Gratitude for staff who supported and strengthened every aspect of the Furman experience. Gratitude for the entire Furman community for their resilience and unwavering commitment to the University’s vision to inspire purposeful living and foster thriving communities through learning, creativity, and innovation. Gratitude for YOU! Through your philanthropy to Furman, you improved the life of a student and his family through a scholarship.

You impacted the economy through the start of a new small business developed by an alumna. You enhanced a school through the volunteer efforts of an alumnus. You made the world more connected through a study away experience. You developed bi-partisanship through athletic teamwork. You started the next great medical discovery through a summer research experience. You solved a community’s challenge through an institute’s partnership. Everyday you inspire the work of the Furman community through the gifts of your philanthropy and yourselves. We are grateful for you.

As we work together to fulfill Furman’s mission to challenge and support lifelong learners through rigorous inquiry, transformative experiences, and deep reflection, and to solve challenges and build community across our towns, cities and nations, you are our inspiration. Now more than ever, the world needs Furman-educated thinkers, leaders and doers; now, more than ever, Furman needs you.

Thank you for your loyalty, your investment and your inspiration.

With gratitude,

Heidi Hansen McCrory Vice President for Development

“Furman has made me a better person. Your generosity doesn't just benefit the recipient – it benefits all we have met and built strong and meaningful relationships with. Without you, those relationships with professors and classmates may not have happened at all, and how sad that would be. So, to sum it all up, thank you. Thank you so much.” – Zach Jones ’21

“Through my experiences at Furman, I have learned so much about others, myself and my place in the surrounding world. The people and experiences here have shaped me as a human being, and Furman has shaped me as a person.

I cannot thank you enough for making that possible.” – Sarah Feingold ’21

“Your generosity has made it possible for myself and many others to attend this gorgeous campus to pursue our dreams. People say Furman is one of the most beautiful campuses, but what really makes it beautiful is the wonderful people like you in our Furman community.” – McCrae Sanders ’21

“Donors like you allow the dream of coming to Furman become a reality, and I am extremely grateful. Your investment in students like me scatters seeds which are cultivated through all the amazing opportunities Furman provides.”

– Joshua Butler ’21

“I learned many lessons about myself as a person, a student, and a future veterinarian. I will take this experience with me throughout my time at Furman and into my future education. I feel blessed to have been able to have this opportunity and it reminded me once again of just how unique the Furman Family is.” – Quinn McConnell ’23

ENDOWMENT OVERVIEW Endowment Valuation

T

he Furman University endowment provides a critical source of revenue which supports the operations and programs of the university. As of June 30, 2020, Furman’s total endowment was valued at $670 million, of which $484 million was invested in the endowment pool (the portion under the decision-making authority of the University). The remainder of the endowment is separately invested or managed by other entities.

During the 2019-20 fiscal year, approximately $34.3 million was distributed from the total endowment. These monies contribute approximately 21.2 % to the University’s annual budget.

Endowment Pool and Total Endowment $800M

NEW ENDOWMENT GIFTS during FY20

$600M $400M $200M 0 FY09

$11.4M

FY10

FY11

FY12

FY13

FY14

Total Endowment

FY15

FY16

FY17

FY18

FY19

FY20

Endowment Pool

$34.3M TOTAL DISTRIBUTION during FY20

Professorships 9% Scholarships 48%

Facilities operation, maintenance, improvement 12%

Unrestricted budget support 10%

Departmental, library, programs, other 20%

Endowment Distribution

Management and Asset Allocation The Furman University Investment Office is charged with managing asset allocation, implementing specific investment strategies, and selecting and subsequently monitoring external money managers. The office collaborates with the Furman University Board of Trustees’ investment committee, the university’s finance team and external consultants to preserve and enhance the purchasing power of the endowment and support the current and future operations of Furman.

The University has adopted an investment strategy that emphasizes the prudent management of risk, while working to

Cash 2.3%

generate long-term total return. To achieve this goal, investments are diversified across a broad variety of asset classes, a strategy that, historically, has been shown to mitigate risk while enhancing portfolio performance. The Investment Office and associated entities are focused on the responsible stewardship and investment of philanthropic gifts. The endowment’s purchasing power is supported by rigorous monitoring and review of investments, which aims to ensure that each gift invested in the endowment may continue to transform the University for years to come.

International equities 22.6%

Fixed income 9.1%

Hedged strategies 20.9%

Real assets/ Natural resources 9.8%

Private equity/Venture 16.7% U.S. equities 18.6%

Asset Allocation

Sources of Income

Net tuition, fees, room and board 63.6%

Private gifts and grants 6.2%

The endowment comprises approximately 21.2% of the University’s annual budget. The overwhelming majority, 63.6% is generated from tuition, room, board, and other student fees. Not only do endowed funds enhance the Furman experience for current and future students, but they also enable the university to reduce the pace of potential tuition increases.

Endowment 21.2%

Sources of Income

Other 9%

Performance Given market cycles and the perpetual time horizon, it is also appropriate to view endowment performance over a longer period. In the figure below, Furman’s endowment pool return, as of June 30, 2020, is compared to the Furman University Policy index. Furman’s annualized returns for the three-year, five-year and 10-year periods are 3.0%, 4.0% and 7.2% respectively.

The first half of fiscal year 2020 started with strong US equity performance dominated by a narrow group of higher-growth technology stocks. Then, the COVID-19 related selloff produced one of the sharpest market declines in history during the first calendar quarter of 2020. Fiscal and monetary stimulus programs provided much needed relief, and the subsequent market rebound during the second quarter of 2020 was a tale of ‘the haves and the have-nots’ stocks. Again, the overall market performance was driven by a handful of large technology companies that sustained revenue growth, while the majority of companies did not recover to pre-COVID levels. International and smaller US indices generally fared worse than larger US stock benchmarks.

Subsequent to fiscal year end and for the past six months ending December 31, 2020, the endowment portfolio had returned over 17.4% as the rebound continued. In fact, the multi-year endowment pool returns improve to 6.1%, 8.3% and 7.2% on a three-year, five-year and 10-year basis, respectively, as of December 31, 2020.

10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0 3 years

5 years Furman pool

10 years Furman policy index

LEARN MORE

For a more detailed look at Furman’s endowment investment information, including policies and historical data, please visit: furman.edu/endowment.

Please contact the Furman University Office of Donor Relations with any questions or comments you may have at donorrelations@furman.edu or by calling Rebecca Bilott, Director of Donor Relations, 864.294.3704.

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