Annual Endowment Report
June 30, 2023
Overview
It is the policy of Morehouse College to manage its endowment funds (“Endowment”) in a manner that will maximize the benefit intended by the donor, to produce current income to support the programs of the College, and to achieve growth of both principal value and income over time sufficient to preserve or increase the purchasing power of the assets. Oversight on the Endowment is the responsibility of the Financial Sustainability Committee (the “Committee) of the Board of Trustees.
The Morehouse College Endowment is an investment pool composed of funds with a variety of designated purposes and restrictions. Although distinct in purpose or restriction, Endowment funds are commingled for investment purposes but tracked via independent accounting.
The Endowment’s primary investment objectives are to safeguard and preserve the real purchasing power of the Portfolio while earning investment returns that are commensurate with the College’s risk tolerance, liquidity profile and sufficient to meet its operational requirements.
Market Value
The Endowment totaled $254,125,270 as of 6/30/23.
Liquidity
The Endowment is managed to provide adequate liquidity to meet the spending and operational needs of the College. A thoughtful and structured approach should be taken to establish and maintain the desired allocation to illiquid investments. Portfolio liquidity is monitored using the following guidelines:
Due to the uncertain nature of commitments, drawdowns and distributions and market volatility the maximum target will be monitored carefully and managed as closely as possible.
Spending Policy
The Board of Trustees authorizes total annual spending from the endowment and of up to a total of five percent (5%) of a three-year moving average of aggregate investment value.
The approved endowment distribution is allocated to individual endowed funds based upon the Endowment Spending Policy noted above. It is the College’s policy that uses of endowment distributions are strictly in accordance with the original donor agreement and/or Board of Trustee resolutions.
Asset Allocation
To achieve its investment objectives, the Endowment utilizes a multi-manager structure of complementary investment styles and asset classes to invest the Portfolio’s assets. Investments may include separately managed accounts and/or mutual funds/co-mingled funds, including exchange traded funds, marketable and non-marketable alternatives, fund of funds, and limited partnerships. The purpose of allocating among a variety of asset classes and strategies is to ensure a proper level of diversification to enhance total return while avoiding undue risk and concentration.
The following target asset class table defines the Endowment’s current asset allocation, as well as the minimum and maximum allocation limits of each asset class.
Performance
The annualized performance of the Endowment is provided below. Results are detailed net of fees and expenses.
The benchmark is a blended composite of capital market indices that represent the target asset allocation and risk profile of the Endowment.