ENDOWMENT REPORT2020-2021
Dear Trinity University friends and supporters,
W
e are pleased to present this report for Trinity’s 2021 fiscal year (FY2021), ending May 31, 2021. Trinity’s endowment ended the fiscal year at a record high of $1.725 billion, while providing university distributions of $61.8 million, of which $54.3 million went to the operating budget. These funds were critical resources for students, faculty, and strategic University endeavors. Additionally, through support from Trinity alumni, friends, and philanthropic partners, net new gifts made to the endowment totaled $4.8 million. The past fiscal year can be marked as one of resilience for the Trinity community. The extraordinary events of FY2021 have underscored the importance of the endowment to the success and stability of the University. Generations of alumni and donors made choices years ago, through endowed philanthropic support, that are providing a substantial benefit and impact to Trinity students and campus life today. This endowed philanthropic support—whether through restricted scholarships, faculty support, or any general-use purpose (restricted or unrestricted)—is a key contributor toward ensuring the quality of a Trinity education and achieving the University’s values of enduring excellence, intentional inclusion, and perpetual discovery. It allows access for students who otherwise could not afford a Trinity education, supports renowned faculty teaching and research, promotes a student-centric, interdisciplinary, liberal arts-focused educational environment, and provides Trinity the ability to invest in long-term strategic pursuits that preserve and advance the University’s educational mission. While FY2021 presented challenges and upheaval, it remains quite an exciting time at Trinity, and we carry incredible momentum into FY2022 regarding many important University projects. For example, just this past year, Trinity attracted one of its most academically strong and diverse student classes in its history, and that would not have been possible without the support of the endowment. Endowments are the ultimate pay-itforward vehicle for establishing a generational legacy, and because endowments grow over time, their impact continues to compound for future generations. We are honored and grateful to be stewards of our donors’ capital and to perpetuate their legacy in support of this wonderful institution. Sincerely,
Craig Crow Chief Investment Officer
Michael Bacon ’89 Vice President for Alumni Relations and Development
T R IN I T Y U N I V E R SI T Y E N DOWM E N T
At-A-Glance 2020-2021
$1.725 billion Value of endowment
37%
Portion of Trinity’s operating budget that the endowment supported
$54.3 million¹ Distribution to Trinity’s operating budget
$5.8 million
New gifts made to the endowment
4.5% 2
Endowment spending policy rate
624
Number of individual endowed funds Figures above as of May 31, 2021
+36.3%
1-year annual return*
+9.6%
10-year annualized return*
*Long-Term Investment Pool and directly held asset performance, net of fees, as of June 30, 2021 1. Total distribution does not include non-recurring ‘rainy day’ reserve distributions of $11.8 million. 2. Approximately 5% of endowments in the Cambridge Associates FY19 o C llege and University Investment Pool Returns survey reported a target spending rate ranging between 4-4.99%. n= 104.
Trinity University’s Endowment Portfolio Overview Beginning Value
$ 1,279
Gains & Income
$ 415.1
Net Endowment Gifts3
$
Other transfers4
$ 88.0
University Distributions
$ (61.8)
Ending Value
$ 1,725
3. $4.8 is calculated from $5.8 in outright gifts less $0.9 decrease in receivables
4.8
4. Other transfers include Board-designated proceeds and less net rainy-day reserves
(in millions, ex-Rainy Day)
Portfolio Value Growth Over Time
2011-2021 $1,725
$1,700 $1,600 $1,500 $1,400
$1,239
$1,200
$1,108
$1,000 $800
$930
$867
2011
2012
$1,150
$1,328
$1,287 $1,279
$1,068
$959
$600 $400 $200
$ in millions
2013
2014
2015
2016
2017
2018
2019
2020
2021
Long-Term Investment Pool (LTIP) –Managed by Trinity’s investment committee and internal staff Funds Held-In-Trust (FHIT) – Managed by third parties on behalf of Trinity Total Portfolio Value
36.3%
Compound Annual Returns The long-term financial objective of the Long-Term Investment Pool is to provide a stable and consistent level of ongoing support for the University’s operations while maintaining and enhancing the real purchasing power of the endowment fund in perpetuity. This chart illustrates annualized returns over trailing periods within the past 10 years.
13.0%
1 Year
3 Years
14.4% 9.6% 5 Years
10 Years
Trinity Investment Returns (net of fees) Performance data as of June 30, 2021, and includes LTIP and directly held asset performance
Source: Trinity University audited financial statements, as of 05/31/2021
The endowment value increased by a net $446 million in FY2021, rebounding strongly from the post-pandemic lows. Investment returns contributed $415 million across the Long-Term Investment Pool (LTIP) and Funds HeldIn-Trust (FHIT) portfolios, with $93 million provided through gifts and other additions and $62 million distributed to the University for the operating budget and non-operating activities.
Distributions
40.0%
The endowment is key to supporting Trinity’s educational mission Financial support from the endowment, in the form of cash distributions toward the operating budget, plays a significant role in the annual operations budget for the University. The endowment is the second largest financial resource for the University operating budget— behind student tuition and fees—and is twice as important to Trinity’s educational mission compared with other private universities. The amount of support the endowment provides to the operating budget is more than double the average of private colleges and universities5, which in turn is considerably higher than that of public universities. In FY2021, Trinity’s endowment distributed $61.8 million to the University. Of that amount, $54.3 million went to the operating budget, representing 37% of total operating revenues. The endowment’s ability to provide this level of support allows Trinity to offer all the benefits of a highly personalized university experience. Furthermore, every student attending Trinity pays less in tuition because of the overall impact of the endowment’s funding.
35.0%
37.3%
30.0% 25.0% 20.0%
17.8%
15.0% 10.0% 5.0%
3.0%
0.0% Endowment Support of Operating Budget
Trinity University
Private College & University Average
Public College & University Average
5. Cambridge Associates’ 2020 Spending Policy Report —Figure 10, 75 private colleges and universities included in data set.
Over the last five years, the endowment has distributed approximately $250 million to Trinity’s operating budget.
LTIP Asset Allocation Trinity’s Long-Term Investment Pool (LTIP) consists of assets managed by Trinity’s Investments Committee and the Office of Investments. To support the in-perpetuity status of the endowment, the University’s LTIP asset allocation strategy captures endowment growth through investments in a variety of asset classes across financial markets globally. Additionally, Trinity’s LTIP is diversified across asset classes and is actively managed by more than 75 external investment managers. Asset allocation, diversification, and manager selection are all critical to driving long-term endowment returns and managing the pool through different economic cycles. Trinity seeks to partner with the best investment managers in each asset class and continues to focus on the long-term build-out of the private investment portfolio, as seen by its steady increase within the asset allocation over time. The extraordinary events of 2020-21 were a good reminder of Trinity’s long-term investment horizon, as the Office of Investments and Trinity’s investment partners continued to make investments during the COVID-19 crisis. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1999
2001
2003
Fixed Income and Cash
2005
2007
Private Investments
2009
2011
Hedge Funds
2013
2015
Non U.S. Equity
2017
2019
U.S. Equity
2021
Campus Impact The Long-Term Investment Pool consists of 624 individual funds—an increase from last year’s 614, thanks to 10 newly endowed funds. Approximately 55% of those funds constitute true endowments, which are gifts restricted by donors to provide long-term funding for designated purposes. The remaining funds represent quasi-endowments, which is money that the Board of Trustees designates for key University purposes and treats as endowments. Both of these classifications are governed by the University spending policy and actively contribute to Trinity’s operating budget. The 624 endowment funds are broadly categorized and support many areas across the campus.
The endowment supports University expenses, such as recruiting and retaining exceptional faculty and funding undergraduate research.
Supporting Student Scholarships
LIBRARY 20 funds || $13 million
The endowment supports a loan fund program for student financial aid and academic support.
These funds provide Coates Library collection and resource support.
For FY2021, 308 endowed scholarship funds provided more than $10 million of annual distributions in muchneeded support to scholarships and student aid. However, the endowment scholarship distribution only covered 15.9% of the $68.3 million of institutional financial aid awarded last fiscal year, an all-time low. This downward trend has continued over time as Trinity students’ financial needs and the cost of providing a world-class education outpace endowed scholarship funds. Trinity remains strongly committed to raising endowed scholarships, an area of critical importance to the University.
70,000 Scholarship and Student Aid Support ($000)
The largest number of endowment funds supports undergraduate and graduate scholarships.
LOANS 8 funds || $51 million
GENERAL 191 funds || $733 million
$
30.5% 60,000
$
50,000
22.7%
40,000
$
$
38,600
$ 68,376 35% 65,300
30%
58,100
25%
46,300 19.1%
20%
17.2%
16.0% 15.9%
30,000
15% $
25,206
20,000
10% $
10,000
$ $
0
7,689
$
8,765
8,855
$
10,019
10,448
10,481 5%
$
0
2009
2014
2016
Total Scholarship and Student Aid ($)
2018
2020 2021
Endowment Scholarships ($)
Endowment Scholarship Support (%)
New Endowment Gifts Honor Trinity’s Own Two Trinity alumni created new gifts this year to “pay it forward” and thank others who have had an impact on their lives or those of Trinity students. Vannie Collins ’14 and his family created an endowed scholarship in honor of family friend, mentor, and Trinity Trustee Robert “Bob” McClane ’61, which will provide financial assistance to undergraduate students, particularly those studying business or finance. Trustee April Ancira ’02 and Ancira Enterprises established an unrestricted endowed scholarship named for Eric Maloof, Trinity’s vice president for Enrollment Management, after witnessing how he goes above and beyond each day to serve Trinity students, especially those most in need of financial support.
$6M $5,962
$5,964
$6,016
FY18
FY19
$6,685 $5,758
$5M $4M
$4,179
$3M $2M $1,810
$1M
FY15
FY16
FY17
FY20
New Endowment Gifts
FY21
Endowment Support (%)
SCHOLARSHIP 308 funds || $270 million
LTIP Funds Unrestricted: $579 million No donor restrictions but may contain designation by Trustees for an endowment Restricted: $715 million Includes temporary and permanently restricted donor funds Total: $1.294 Billion
FACULTY SUPPORT 65 funds || $145 million
BUILDINGS AND GROUNDS 32 funds || $83 million Funds from endowments support buildings on campus as well as the care of Miller Fountain.
Endowment funds support endowed professorships, lectureships, faculty development, and more.
Donor Spotlight Kay ’72 and Gerald “Geary” ’70 Reamey
The creation of endowed funds provides an opportunity for donors to strengthen an area of the institution that holds meaning for them. For the Reameys, ensuring access to a Trinity education was the perfect way for them to give back to their alma mater. Their Trinity story began when Kay and Geary met and married as students. Through law careers, teaching, and raising their daughter, Anne, who also studied at Trinity, the Reameys maintained close ties with the University and its faculty, staff, and fellow alumni. The Reameys even served on the Trinity University Alumni Association Board among other volunteer roles. The gratitude and affection they have always felt for Trinity provided the impetus for establishing an endowed scholarship. The perfect moment to formalize their intentions occurred this year, as Geary is celebrating his 50th graduation anniversary, they are celebrating their 50th anniversary of their marriage, and Kay’s 50th reunion is next year. The Reamey Family Scholarship supports undergraduate students who have the greatest financial need. “It is our wish to assist current and future students in enjoying the many benefits of a Trinity education without the financial encumbrances that can impede development in the early stages of their careers,” they say.
Student Spotlight MARIA ARTEAGA ’22 Majors in human communication and Spanish; minor in teaching Bertie Maples Butler Scholarship, Norine R. Murchison Scholarship, and Roberta W. King Scholarship
Though Trinity’s Mexico, the Americas, and Spain (MAS) program, Maria Arteaga ’22 received a scholarship to study in Madrid for a semester, taking classes led by MAS faculty. She explored Spanish culture in Madrid and surrounding sites, lived with a host family, interned for an NGO, and created lesson plans for a local public elementary school. Upon returning to Trinity, Arteaga's greatest shift in perspective involved how she saw herself.
I fell in love with the city of Madrid, but I also fell in love with my culture. I fell in love with myself.
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Investing In—and With—Students
If you have any questions about this report, please contact the Office of the Vice President for Finance and Administration at 210-999-7306 or the Office of the Vice President for Alumni Relations and Development at 210-999-7328.
Since 1998, Trinity’s Student Managed Fund (SMF) has provided real-time opportunities for select Trinity students to manage a portion of endowment assets. The Prassel Professor for Professional Practice in Finance, Karl Pichler, has successfully taught and challenged Trinity students over the past two years, providing them a “hands-on” approach to investment management. The investment approach at his helm has evolved into a $10 million fully invested portfolio with the foundation of core, passive exchange-traded funds exposure complemented by a smaller, actively managed satellite portfolio of stock holdings. The class has an advanced curriculum that includes both portfolio construction and in-depth equity research, where students measure returns and attribution based on asset allocation and stock selection. The class culminates with an overall presentation of ideas and analyses to peers, with the best “pitch” chosen to present to Trinity’s Board of Trustees Investments Committee. This comprehensive exposure to financial metrics and investment management offers Trinity students insight into potential financial career endeavors as well as the practical means to manage their own finances—setting up our students for future success.