IMPACT OF PHILANTHROPY
FROM THE PRESIDENT
As the University of Miami approaches its centennial in 2025, I am—more than ever—inspired by the wonderful generosity of all those who have created a legacy through endowed support to our institution. Endowed donations provide a lasting value in perpetuity and are of utmost impact to the University and its future. They are critical to our commitment to deliver a first-rate education to our students, generate and share groundbreaking knowledge, provide top-quality care for our patients, and serve our community and beyond with innovative programs and resources. It is because of the visionary philanthropy of donors like you that UM is able to fulfill this ambitious mission and pursue the highest levels of excellence in all that we do. We are pleased to enclose the 2017 Endowment Report, which illustrates the importance of your giving and the significant difference it has made. As of May 31, 2017, the University of Miami’s total endowment was $948,579,230. This figure has increased considerably since the previous fiscal year, and we remain committed to growing our endowment as dedicated stewards of your investment. As we continue to advance our bold initiatives through the Roadmap to Our New Century, we will make new connections across the hemisphere and around the globe, promote scholarly achievement, foster a spirit of innovation, and expand opportunities for all. Our endowed funds enable us to sustain this vital work, and for this, we are most grateful to you. On behalf of our entire community, thank you for your remarkable support as we move the U forward together.
Julio Frenk
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IMPACT OF PHILANTHROPY
Philanthropy helps sustain the University of Miami’s ongoing quest for academic and research excellence. Every aspect of our institution is stronger today because of the endowments provided by donors like you.
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IMPACT OF PHILANTHROPY
Your support bolsters the University’s mission of conducting outstanding teaching, research, and service. It enables us to provide resources for physician-scientists on the front lines of medicine; promote well-being in families, schools, and communities; support marine research; and enhance existing programs and create new ones—among many others. Through your generosity, you also help ensure that students with limited financial means have the opportunity to pursue an academic degree at our institution. Ultimately, your endowed gift transcends the borders of our community. Whether it be when our graduates go on to excel as educators, nurses, doctors, engineers, lawyers, and in a host of other professions, or when our researchers discover new knowledge with the potential to cure disease, make businesses more efficient, and help protect and restore our natural environment, an endowment is indeed the gift that keeps on giving. Your gift is endless, as is our gratitude.
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IMPACT OF PHILANTHROPY
Founded in
1925 classes began October 1926
IMPACT OF PHILANTHROPY
202,832 Alumni
“Your financial support is making it possible for me to pursue my dream, as a female, of being an industrial engineer in a male-dominated field. I look forward to building a career that makes it possible for me to bring better solutions to people and communities worldwide. I appreciate your commitment to the University of Miami’s scholastic excellence and the opportunities it affords students.” Blaise Garfall
Class of 2018, Industrial Engineering
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IMPACT OF ENDOWMENTS
IMPACT OF PHILANTHROPY
Endowments help strengthen the University of Miami’s future by providing ongoing support to various initiatives.
No.
44
out of more than 1,000 national public and private institutions on the Wall Street Journal/Times Higher Education ranking of U.S. colleges and universities 2018.
No.
46
on U.S. News & World Report’s 2018 best colleges list
5%
Current Degree Programs
42% of new freshmen graduated in the top 5% of their high school class, 60% in the top 10%.
115 BACHELOR’S 114 MASTER’S 63 DOCTORAL
Endowed gifts are invested in the University of Miami’s growth pool, and a portion of its annual investment return is used according to purposes specified by the donor.
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IMPACT OF PHILANTHROPY
The powerful impact of your endowed gifts to the University of Miami includes: Faculty Endowed chairs, directorships, and fellowships attract and retain gifted educators and researchers, enabling them to pursue their professional goals and make lasting contributions to our students, our community, and beyond. By supporting our faculty’s academic, scientific, and clinical research, endowments foster the pursuit of new knowledge and innovative approaches that can lead to significant breakthroughs. Scholarships and student support Thanks to our donors, we are able to offer endowed scholarships and fellowships to undergraduate, graduate, and post-graduate students from a wide range of backgrounds, opening doors to exciting new learning, research, and career opportunities. Your support also makes it possible to provide students with special enriching experiences, such as study abroad, internships, and entrepreneurship activities. Programs The University’s programmatic offerings are enhanced by endowed gifts that make it possible to enrich and expand existing programs and curricula and to create new ones. These endowments also support our libraries, centers, and museum, as well as lectures, faculty and student awards, and other initiatives that benefit students, professors, alumni, and members of the community.
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IMPACT OF ENDOWMENTS
“Attending the University of Miami was a dream of mine for many years and thanks to the generous support that I have received, I was able to make this dream a reality. My professors, patients, and classmates have given me unique perspectives on the inter-connectedness of culture, policy, and state-of-the-art clinical care.” Eva A. Williams, Class of 2019, M.D. Candidate
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ENDOWMENT GROWTH POOL
ENDOWMENT GROWTH POOL
Prudent Changes Foster Strong Year for Endowment ENDOWMENT VALUE
900
$948.6
800 700 600
300
Net increase (decrease)
200
Ending Balance
100
1
0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Ten Years
Fifteen Years
$ 678.7 $ 741.4 $ 427.0 302.7
276.7
547.9
39.9
156.4
280.1
441.0
104.0
269.9
207.2
521.6
$ 948.6
$ 948.6 $ 948.6 $ 948.6
HISTORICAL GP PERFORMANCE vs BENCHMARKS May 31, 2017
Public Equity
55-65%
60%
64%
Absolute Return
5-20%
13%
18%
Private Equity
5-10%
8%
3%
Real Assets
0-15%
4%
1%
Fixed Income
5-15%
13%
12%
Cash
0-5% 2%
3%
Benchmarks
Actual1
Total Portfolio
60/40
2013
16.73%
19.71%
15.41%
2014
12.92%
14.43%
11.29%
2015
3.42%
5.00%
4.36%
2016
-4.40%
-2.71%
-1.87%
2017
13.52%
13.75%
10.93%
1
13.52 percent investment return
n
Outperformance seen in nearly all core asset class benchmarks
n
Reduction in real asset allocation ahead of asset class underperformance
n
Multimillion-dollar reduction in fees paid to managers of a comprehensive review of GP portfolio that resulted in transitioning the majority of assets to new managers
F or most endowments, this is pursuant to the University’s Endowment Spending Policy.
POLICY PORTFOLIO TARGET AND RANGES Target
Five Years
n
n C onclusion
(43.1) (189.2) (349.6) (467.3)
Gifts and other net additions
400
One Year
Beginning Balance $ 844.6 Return, including unrealized appreciation (depreciation) 107.2 Distributions to operations, etc.1
500
Range
Highlights for the year included:
ENDOWMENT GROWTH AT MARKET (in millions)
(IN MILLIONS)
Thanks to a strategic shift in managers, reduction in costs, and strong investment returns, fiscal year 2017 was very successful for the University of Miami’s Endowment Growth Pool (GP).
In addition to relative returns, a key indicator of performance is relative to benchmarks. For the 12 months ending May 31, 2017, the GP returned 13.52 percent compared to its total portfolio and 60/40 benchmarks of 13.75 percent and 10.93 percent, respectively. This is the largest outperformance of the 60/40 benchmark in the past five years and the first year where the portfolio nearly matched the total portfolio benchmark. Individual manager performance is reviewed on a regular basis, and all managers are subject to the University’s rigorous due diligence process. As a result of a comprehensive review, the GP transitioned the majority of its assets to new managers. The Board of Trustees Investments Committee annually reviews the asset allocation for the GP. During fiscal 2017, the portfolio’s strategy was shifted toward a global allocation that optimizes risk-adjusted returns (net of fees paid). At May 31, 2017, some core asset classes were slightly above or below policy targets due to manager redemptions that were not yet received because of holding period restrictions (specifically in absolute return) or committed capital that had not been called (private equity). The University’s GP strategy is to ensure that current and future spending requirements are supported while preserving purchasing power through asset growth. Performance is measured over the long term and is based on meaningful asset class diversification, access to top active managers, and significant exposure to index funds. We are confident that the prudent changes implemented in fiscal year 2017, which helped realize significant gains, will provide a strong foundation for the future of the GP.
Net of Fees
Charmel Maynard, Associate Vice President and Acting Treasurer
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ENDOWMENT REPORT TERMS
Definition of Terms in your Endowment Report Endowed gifts are critical to the ongoing maintenance of the University’s operations. They make it possible to sustain and maintain scholarships, fellowships, faculty positions, and programs in perpetuity. The University is grateful for your ongoing support. Time frame Your report contains data about the fund from the University’s most recently closed fiscal year. The specific dates included in the reporting time frame are listed in the report (June 1 to May 31). Prepared for This category indicates the individual for whom the endowment report was prepared. Endowment Name The endowment name is the official name of the endowed fund. History and Purpose This category explains why the fund was created and the criteria by which the fund is used. These criteria were established at the time the gift was made, usually through a gift agreement or bequest. Total Contributed Value The total amount of gifts given to the fund since its creation; this includes all gifts, including those given by you, your family, friends, associated businesses, and any other contributors. Market Value The market value includes contributions, gains, and losses attributed to the fund as of May 31 of the most recently closed fiscal year.
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Donations to Fund in Fiscal Year This category indicates the total amount of gifts given to the fund during the reported fiscal year. This includes all gifts, including those given by you, your family, friends, associated businesses, and any other contributors. Spending Distribution for Fiscal Year The amount distributed for spending, according to the University’s Endowment Spending Policy, is used to support the fund’s purpose during the fiscal year. The University of Miami’s current endowment spending policy for fiscal 2017 allows for distribution of 5 percent of the three-year moving average market value of the Growth Pool, applied to individual endowments based on the number of shares each endowment owns in the Pool. For endowments that are not yet fully funded, spending distributions are reinvested back into the endowment, thus are not available for spending. This is done to help new endowments build an initial reserve and hedge against any market downturns. Endowment Highlights/Recipients How the income from the fund was used during the reporting time frame.
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“Your donations are more than opportunities, they’re a vote of confidence—a statement that it’s possible for students like me to succeed if freed from financial limitations. Thank you for your outstanding generosity and your confidence in our potential.” Elijah Hamm
Class of 2021, Microbiology