2015-16 Oklahoma City University Endowment Report

OKLAHOM A CIT Y UNIVERSI T Y

endOwme n t Re PORt 2015–16

YOUR INVESTMENT IN OCU TOUCHES THE FUTURE The generosity of Oklahoma City University alumni and friends continues to change lives.

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During the 2015-16 academic year, a total of 966 individuals received their OCU degrees and moved on to build stronger lives and careers. Your support made that achievement possible. We are grateful for your investment in our students.

During the last academic year the Oklahoma economy faced significant challenges. Yet our supporters continued to provide resources to help OCU students thrive. The university benefited from gifts to endowed funds, including creation of an endowed academic chair in the Petree College of Arts and Sciences.

All support is vital to the strength of our university as we fulfill a great mission of private higher education. Gifts to our endowment have the ability to transform lives for decades to come. Whether through outright gifts to provide additional resources, or planned gifts which can open doors to incredible opportunities, your support touches tomorrow.

Thank you for demonstrating trust in our university and our mission. We seek to honor that trust through effective stewardship of endowment funds. We want the OCU endowment to exemplify the highest standards of excellence, just as we expect our graduates to demonstrate their outstanding educational experiences through their lives of leadership and service.

You are investing in the future through your endowment gifts. On behalf of the Investment Committee, the Resource Development Committee, and the entire Board of Trustees, we thank you for your generosity and extraordinary support.

RICHARD PARRY Chair, Investment Committee

GARY HOMSEY Chair, Resource Development Committee

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OUR GeneROUs and faithfUl dOnORs continue to provide a significant margin of excellence for students and the faculty, staff, and programs that support them. Their philanthropy makes a profound, positive impact and continues to help make Oklahoma City University the best educational institution possible.

Many of our donors choose to direct their gifts toward endowment. OCU’s endowment, including endowment held by other entities for the benefit of OCU, is made up of 616 individual funds designated to provide perpetual financial support for scholarships, faculty professorships and chairs, the various schools, library resources, and other endowed programs. Of these funds, 531 are held by OCU, 66 by the Oklahoma United Methodist Foundation, and 19 by the Oklahoma City Community Foundation.

ENDOWMENT Endowment Assets by School/Department Dance & Arts Management • 1.28%

Endowment Assets

by Purpose

Financial Aid • 8.44% General OCU • 4.26% Law • 8.68% Library • 0.38% Music • 10.06% Nursing • 0.82% Clockwise from top of graph:

Religion • 8.29%

Alumni • 0.14%

St. Paul School of Theology • 0.09%

Academic Professorships & Chairs • 11.81%

Arts & Sciences • 6.39%

Theatre • 0.66%

Scholarships • 49.90%

Athletics • 0.87%

University-Church Relations • 1.52%

Other • 38.30%

Business • 13.36%

Other • 34.76%

of Kramer School of Nursing grads who seek RN positions or graduate degrees are either employed or attending graduate schools

PAIGE KONGER Major: Acting Hometown: Tampa Bay, Florida Scholarship support helped Paige Konger’s dream of attending OCU come true.

“My scholarship has helped relieve the financial burden for my family while allowing me to focus on my studies,” she said. “It has allowed me to get the education I dreamed of without the financial strain I feared.”

Top 10

OCU’s safe, friendly, and nurturing environment set the school apart for Konger.

The Ann Lacy School of American Dance and Entertainment is listed as a “Top 10” dance program to consider for college

“With small class sizes and a close relationship with faculty, it’s a place where each student’s needs are met and students are given the opportunity to make bold choices without the fear of failure.”

Konger plans to return to her home state of Florida after graduation and pursue a stage acting and television career. She also has aspirations of managing and eventually owning her family’s business,

Investment Performance

OCU’s five-year investment performance is in line with Lipper Median peers. For the 2016 fiscal year, several factors, including a surging U.S. dollar, decline in non-dollar denominated bonds, and commodity/mineral interest declines affected performance results.

Net of Fees • As of June 30, 2016 The historical returns presented herein represent the actual historical returns of the OCU Endowment which reflect the deduction of fees charged by third parties.

35% S&P 500 Index / 20% MSCI EAFE Index / 45% BC US Aggregate Intermediate Index

OCU Endowment Lipper Median

The information in this document was obtained from sources believed to be reliable, however, accuracy is not guaranteed. Historical returns are not indicative of future performance.

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Notes

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% 23 6. % 08 %

10

5.

5.

% 08 % 6.

10

64

5.

4.

-1

7

%

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4 3 2 1 PERCENTAGE

Lipper Median returns from the Lipper mutual fund universe for balanced funds in the asset class category. As of 7/12/16, the universe consisted of 4,999 peers. Source: Wilshire Associates, Lipper, and Wespath.

2 Historical returns are time weighted for fiscal years ended 2016, 2015, 2014, and 2013.

Historical returns prior to 2013 were calculated using the simple Dietz method. Returns greater than one year are annualized.

3 Past performance is no guarantee of future returns.

“I plan to marry the skills I have learned about the entertainment industry at OCU with the educational and scientific components of the aquarium.”

.6 5 -0 % .4 1.4 0% 7%

Backstage (2016)

the Tarpon Springs Aquarium.

0 -1 -2 1 Year

3 Years

5 Years

MANAGEMENT & STRATEGIES Oklahoma City University is committed to prudent, time-tested investment strategies and fiscal policies. The Board of Trustees’ Investment Committee is charged with overseeing its funds and measuring the returns they produce against nationally recognized standards and metrics for investment performance.

The Investment Committee actively monitors the financial markets to control risk and evaluate exposure for all asset classes. The Oklahoma United Methodist Foundation serves as investment manager and advisor to the Board of Trustees’ Investment Committee.

In managing the endowment, the University seeks to balance the dual objectives of enhancing the future purchasing power of endowment funds and meeting current spending needs. The endowment is invested with a long-term horizon to ensure that it will grow at a rate above inflation, while providing a stable stream of income to support the purposes for which its funds were created.

Endowment growth is due not only to the generosity of thousands of alumni, friends, corporations, and foundations through the years, but also to the careful stewardship provided by the Board of Trustees.

Asset Class Overview OCU’s directly managed endowment portfolio of $60,389,639 was composed of these asset classes as of June 30, 2016. The guiding principle of OCU’s consolidated endowment program is that funds should be managed so that a gift today will fund a donor’s objective in perpetuity.

Broad Asset Allocations

Detail Asset Allocations

OCU Endowment — $60.4 million

OCU Endowment — $60.4 million

Equities • 55.6%

Cash • 4.7%

Fixed Income • 40.3%

U.S. Equity Fund • 34.7%

Alternatives • 4.1%

International Equity Fund • 20.9% Fixed Income Fund • 22.0% Inflation Protection Fund • 8.9% Alternative Investments • 3.2% Mineral Interests • 0.9% Notes Receivable • 4.7%

Assets and Distributions Assets Under Management

65

3.0

60

2.8

55

2.6

50

2.4

45

2.2

40

2.0

35

2012

2013

2014

2015

2016

1.8

MILLIONS OF DOLLARS

MILLIONS OF DOLLARS

Distributions from Assets Under Management

Our endowment has maintained strong financial growth as demonstrated by the five-year average return of 5.10 percent on endowment investments. The market value of endowment funds, including endowments held by other entities for the benefit of OCU, was $94,034,884 as of June 30, 2016. This report highlights those funds directly managed

by OCU trustees through the Oklahoma United Methodist Foundation.

85% of science students who applied were accepted into medical, dental, pharmacy, and biomedical research graduate schools in 2016

62 national championships— and more than any other NAIA university in men's and women's basketball, men's and women's golf, and softball

$2.84 million was made available through the endowment to support OCU students, faculty, and programs during fiscal year 2016.

ARRASH ALLAHYAR Major: Cell & Molecular Biology Hometown: Oklahoma City Arrash Allahyar is attending Oklahoma City University on the Great Plan Scholarship, an historical scholarship established to help STEM majors excel and encourage them to make advances in their respective fields.

“To be part of such a scholarship is truly inspiring, and I am blessed to have this opportunity, which has allowed me to pursue my desire to study medicine,” Allahyar said. “Had it not been for the Great Plan scholarship, I would most likely not have been able to study at OCU and would have lost the opportunity to receive the personalized and well-rounded education that this institution offers.”

Allahyar applied to more than 20 university and colleges during his senior year of high school.

“To this day, I do not have a single doubt that OCU was the right university for me.”

Allahyar said he instantly recognized the level of compassion and care among OCU faculty members.

“I saw an institution that could help me grow both as an intellectual and as a person,” he said, “and after three years of attending OCU, I can proudly say this institution has done just that.”

Allahyar plans to go on to medical school and is considering a career in pediatrics.

NEW ENDOWMENTS The following list represents new endowments established between July 1, 2015, and June 30, 2016. These funds will benefit future generations of outstanding and deserving Oklahoma City University students in perpetuity.

Mark and Jackie Darrah Professorship in Opera and Musical Narrative Mark and Jackie Darrah established this endowment fund in December 2014 to financially support, through an endowed professorship, excellence in teaching performance skills to students studying opera, musical theater, and other forms of musical narrative that may be developed. Those who hold this professorship shall excel in the teaching of musical performance or production skills in the areas of opera, musical theater, or other forms of musical narrative.

Michael Schafer Endowed Scholarship This endowment fund was established in 2016

by Eddie and Rochelle Schafer in memory of their son, Michael Shane Shafer, who graduated from Oklahoma City University in 2014 with a Bachelor of Music in Vocal

Performance. The fund will be used to create scholarship awards which will provide recognition and financial assistance to a deserving student or students enrolled in the OCU Wanda L. Bass School of Music.

The scholarship will be awarded to a student who meets the following criteria: pursuing a Bachelor of Music degree in Vocal Performance, with a GPA of 3.5 or higher, who is a 1st Tenor.

Dean Valerie K. Couch Endowed Scholarship Kay and Clark Musser established this endowment fund in 2015 to create scholarship awards. The purpose of this fund is to provide recognition and financial assistance annually to a deserving student or students enrolled at the OCU School of Law. Recipients will be selected in accordance with the following criteria: second or third year law students who have provided outstanding leadership and service and have demonstrated the need for financial assistance.

Richard and Jeannette Sias Art Preservation Fund Richard Sias established this endowment in 2015 to fund the renovation of and to provide endowment funds for preservation of the two Olinka Hrdy murals and other artwork which are part of the Oklahoma City University School of Law. Investment proceeds from the fund will be used for the long-term protection and potential repair of the Hrdy murals and other artwork which is part of the OCU School of Law collection.

Katherine and Mary Clary Chair of Creative Writing The estate of Mary Clary Sargent established an endowed chair in creative writing in the Petree College of Arts and Sciences at OCU. This endowment bears the names of sisters Katherine (Kay) Corinth and Mary Clary Sargent, both graduates of Oklahoma City University. The selected recipient must have demonstrated excellence in teaching and/or research and have attained a recognized level of accomplishment within his or her academic discipline. Earnings from the fund may be used toward reasonable expenditures that would foster excellence in the academic discipline toward which this endowed chair is directed.

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ENDOWMENT FAQs

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What is an endowment?

Whose name is on the endowment?

Individual endowments represent the legacy of benevolent donors who invest for long-term growth. An endowment is timeless because the corpus of the endowment fund is not depleted. Instead, the investment income and gains earned from an endowment advance the strategic vision of the donor on a continuing basis.

Donors are encouraged to name their endowed fund in a way that is meaningful to them. Many donors establish an endowment in honor of a specific person – a family member, professor or coach – and name the fund accordingly.

Endowments can also be named more broadly for the discipline they support or the group or individuals who establish them.

Why are endowments important?

Can I give to an existing endowment?

Endowments build a legacy of support that spans generations.

As a permanent legacy, they will continue to give educational opportunities to the most talented students long into the future.

They also allow OCU to recruit and retain the best teachers to build programs and act as esteemed mentors to our students.

Yes. Unless you state otherwise in your memorandum of understanding when the gift is established, the fund can be left “open” to future gifts from you or others who choose to support the fund. While there is a minimum of $25,000 to establish a new endowment, there is no minimum gift required for increasing the size of an existing endowment.

Can I choose what my endowment supports?

applicants for 36 places in the cohort that begins Physician Assistant studies in January 2017

Yes. A number of donors to Oklahoma City University choose to restrict how their funds can be used. You can designate your gift to support a particular school or program, special initiative, library, or other opportunity at the University.

How is an endowed fund invested?

OCU adheres to investment policies intended to provide a balance of risk and return in the portfolio. The investment portfolio is diversified to keep volatility within acceptable limits for the portfolio as a whole. This provides the greatest assurance that future generations benefit from the endowment as much as current students.

When will an endowment begin generating payout that can be spent?

Once the initial gift has been received, the minimum required funding levels have been achieved, and all required paperwork has been completed, initial payout of funds typically will become available within one year.

How is the amount of annual payout determined and then distributed?

What are the minimum endowment levels to establish a named endowed fund?

The minimum gift required to establish a named endowment fund is $25,000. Endowment gifts can be pledged and paid over a period of up to five years.

Some examples of minimum guides for named endowed funds are: • • •

Scholarship: $25,000 Professorship: $500,000 Chair: $1,000,000+

The amount of payout allocated each year varies because it is based on the market value of the endowment portfolio. The Board of Trustees reviews and approves the spending rate annually. The average spending rate for the past five years has been approximately five percent of the endowment’s average market value.

How does the endowment increase in value?

While investment returns help to fuel the growth of OCU’s endowment, the addition of gifts is more important over the long term. Recurring contributions are important because this allows for averaging the cost basis over time.

ADVANCING OCU Cash, securities or planned gifts are excellent ways to build an existing endowment or establish a new fund.

Office of Advancement & External Relations • (405) 208-7000 • give@okcu.edu • okcu.edu/give Marty O’Gwynn • Vice President for Advancement & External Relations • mlogwynn@okcu.edu Judy Reyes-Henderson • Assistant Vice President for Development • jareyeshenderson@okcu.edu