FISCAL YEAR 2023
ENDOWMENT FINANCIAL REPORT
In a nation divided by passionate debates and heated disagreements, there's a profound schism that eclipses political discourse: the age-old clash between Team Marvel and Team DC. Or so I came to understand one day when I found myself immersed in this conversation between two friends. It's not just a lighthearted conversation about comic book characters; it's a fierce debate delving into existential questions like, "Who would win in a head-to-head battle between Superman and Captain Marvel, Iron Man and Batman, Thor and Wonder Woman?" Although on that last match-up, my money is on Wonder Woman who deserves a moment in the spotlight because she stood for decades as the lone high-profile female superhero, navigating a hero world dominated by the boys. A situation familiar to anyone raised amid brothers and sons as one that toughens you up. After being immersed in debates about Iron Man's superior suit and Batman's ingenious gadgets, I walked away from this vociferous disagreement like I did from high school algebra, convinced I'd never use any of that knowledge again. However, much like most of life's unexpected lessons including algebra, I find myself reflecting on what I once deemed useless information and contemplating the concept of superheroes and their superpowers. Consider this: philanthropy is a superpower. As donors, we take on the responsibility of charging into a dangerous, crumbling, suffering, dark, and evil world. Armed with our powers of optimism, empathy, and generosity, we bring light, love, hope, and encouragement into a dark world. Our generosity makes us stronger than the Hulk, braver than Black Panther, and cooler even than Batman. Through our gifts to Furman, especially scholarships and endowed scholarships, we positively impact current students and generations of students to come. Philanthropy makes us immortal – one of the few things that does. You are Furman's superheroes. Your support for Furman and our students is genuinely saving the world. You are stronger than any fictional character, and your impact is everlasting. While we may not resolve the age-old dilemma of who would win – Black Widow or Black Canary, Captain America or Green Lantern, one certainty remains: you, our Furman philanthropy superheroes, have no rivals. We triumph because of you! A heartfelt thank you to each and every one of you for all that you give of yourselves to Furman. I hope on occasion you revel in your superhero-ness and throw out a Wonder Woman pose if for no other reason than it feels awesome. Thank you for being our superhero and for changing the world through your support of Furman.
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“I chose Furman because it was really important for me to attend a school where I could easily connect with faculty and feel engaged in the classroom. Furman's size and class structure allows for so many engaged learning opportunities which have been invaluable to my experience. Without this scholarship support, I would not have been able to attend Furman or experience any of the engaged learning that Furman has provided. Thank you for supporting Furman.” - ERIN V. ’25
“I am so grateful for the scholarship support I have received. It gives me the opportunity to be a thriving Furman student. I know I would have missed out on countless, impactful experiences if I was unable to come here. My mind goes to the people who have changed my life, the professors who encouraged me to push myself, and the organizations that have given me purpose during my time here. Thank you so much for your contribution to my education and success!” - SOPHIE P. ’24
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T
he Furman University endowment provides a significant source of revenue which supports the operations and programs of the university. As of June 30, 2023, Furman’s total endowment was valued at $787 million, of which $602 million was invested in the endowment pool (the portion under the decision-making authority of the
POOL
$592,996,843
Net Investment Return
401,870,412
Distributions
(322,541,103)
Gifts VALUE AT 6/30/2023
115,163,397
MILLIONS
ENDOWMENT Value on 7/1/2013
university). The remainder of the endowment is separately invested or managed by other entities, e.g. The Hollingsworth Funds. During the 2022-23 fiscal year, approximately $37.1 million was distributed from the total endowment. The endowment distribution contributed approximately 22.6% to the University's annual budget.
HELD BY OTHERS AND SEPARATELY INVESTED
$800
$650
$631
$610
FY15
FY16
$661
$703
$695
FY18
FY19
$839
$812
$787
FY21
FY22
FY23
$670
$600
$400
$787,489,549 $200
FY14
FY17
FY20
ENDOWMENT DISTRIBUTION NEW ENDOWMENT GIFTS during FY23
46.2% Scholarships 20.6% Departmental, library, programs, other 12% Facilities operation, maintenance, improvement 10.8% Professorships
TOTAL DISTRIBUTION during FY23
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10.4% Unrestricted budget support
ASSET ALLOCATION
22.5% Private equity/venture
10.1% Real assets/natural resources
20% International equities
6.5% Fixed income
18.1% U.S. equities
5.0% Cash
16.5% Hedged strategies
1.3% Private Credit
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SOURCES OF INCOME
T
otal distributions from the endowment and other university investments comprise approximately 25% of the university’s annual budget. The overwhelming majority, approximately 56.4% is generated from tuition, room, board, student fees and other auxiliaries. 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.
L
ike all perpetual funds designed to support current and future generations, endowments should be viewed through the lens of longer term performance. In the figure below, Furman’s endowment pool return, as of June 30, 2023, is compared to the Furman University policy index or benchmark. Furman’s annualized returns for the three-year, five-year and 10-year periods are 11.2%, 6.6% and 7.1% respectively. In addition to this comprehensive report from the office of investment, you will find statements charting the progress of your individualized fund(s) summarizing the 2023 fiscal year. The reports include beginning and ending market values, investment performance figures and the amount allocated to uses of the monies from your fund(s) labeled “spending distribution.” Similar to FY 2022, FY 2023 can be described as a “tale of two halves.” U.S. and non-U.S. developed equities were modestly positive in the first half of FY 2023 while fixed income and real assets were mixed. The Fed’s significant tightening campaign resulted in negative returns across most segments of the Treasury market. Riskier categories of credit such as loans and high yield outperformed investment-grade. Regarding real assets, REITs fell significantly with the rise in interest rates and concerns over commercial real estate while natural resources and most commodities rose with inflation. In the second half of FY 2023, both equities and fixed income rallied while real assets generally detracted. Key themes for FY 2023 were: inflation, central bank activity, and the inverted U.S. yield curve. As inflation became more entrenched, the Fed was compelled to initiate the sharpest tightening cycle in decades. Global central banks, experiencing a similar dynamic, had to become more hawkish as well and this had implications for asset class performance. After a strong start to the fiscal year, the S&P 500 reached new lows in October 2022 resulting from recessionary fears and a hawkish Fed. However, the market moved higher from there as inflation declined and hope for a soft-landing spread. Another event that occurred during the fiscal year related to the sharp increase in interest rates was the failure of Silicon Valley Bank (SVB). This led to a divergence in performance between
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56.4% Net tuition, fees, room and board, other auxiliaries 25% Distribution from endowment/other investments
12.5% Private gifts, grants and CARES Act 6.1% Other
growth vs. value and large vs. small as the bank heavy small cap indices trailed large cap growth, the latter of which had tailwinds from euphoria around artificial intelligence. Consequently, the “Magnificent Seven,” which account for a disproportionate share of the S&P 500’s weight, were responsible for a large part of the FY 2023 gains, leading to a very narrow market. Non-U.S. developed equities also had a strong year; however, emerging markets lagged as China detracted and is a large percentage of the MSCI Emerging Markets Index. India was the beneficiary of outflows from China. Given the strength of public markets, particularly global equities in the second half of FY2023, a global 70% (stocks) / 30% (bonds) portfolio rebounded from FY2022. However, more diversified portfolios that include alternative investments resulted in muted returns for institutional investors. Furman’s one-year return as of June 30, 2023, was 3.1%. While hedge funds were strong in the portfolio, negative private equity returns offset the positive contribution from public equities. Furman remains committed to the long-term strategic investment policy and believes there is a lot of embedded value in the portfolio. 12% 11% 10%
11.2 10.2
9% 8% 7%
6.6
6%
7.1 6.2
6.3
5 years
10 years
5% 4% 3% 2% 1% 0
3 years
Furman pool
Furman policy index
*Policy returns for 3 years, 5 years and 10 years = 10.2%, 6.2% and 6.3%, respectively
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 at 864.294.3704.
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