ENDOWMENT REPORT2018-2019
Dear Trinity friends and supporters,
A
s we draw our 150th Anniversary year to a close and turn the corner to 2020, we are pleased to present this report for the past fiscal year. In 2019, Trinity’s endowment ended at $1.29 billion, with new gifts made to the endowment totaling $6 million. Funding sources to support Trinity have evolved tremendously since 1870, when founders used the University’s land as collateral to finance its academic and physical expansion. Sixty years later, the stock market crash of 1929 forced the University to use the endowment just to keep the doors open from one day to the next. Today, the endowment contributes 34 percent toward Trinity’s operating budget. Following a year of celebrating our past, we are refocusing on the future of Trinity and prioritizing perpetual discovery, in which students, faculty, and the entire Trinity community seek and create new knowledge, learn from it—then start the process all over again. In addition to presenting the growth and impact of endowment funds during the past year, this report offers several stories you won’t want to miss. Here are the highlights: •
Learn about Donald R. Philbin III Memorial Scholarship recipient Andrew Aertker ’21 and how his participation in the Stumberg Venture Competition shaped his Trinity experience.
•
Endowment fund diversification is driven by the prudent pursuit of investment options across asset classes. Recently, the endowment invested in an innovative sustainable real assets fund with a focus on environmentally-friendly, renewable resources.
•
Donors are at the heart of every endowment—for example, Phil and Linda Wetz established the Wetz Stoddard Scholarship for undergraduates 20 years ago.
James W. Laurie, president of Trinity from 1951-70, shared this insightful view of education in his valedictory: “Of itself, your degree is no certain mark that you are an educated person. That will be revealed by what you do with what you are—and what you have—and what you know.” Education and endowments have this sentiment in common—what matters most is the conscientious stewardship of what we have been given. It is because of you that the Trinity endowment remains robust and continues to serve the University and its students. Thanks to each of you for your part in accelerating everything that comes next for the University.
Gary Logan Vice President for Finance and Administration
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 2018-19
$1.29 billion
Value of endowment
34%
Portion of Trinity’s operating budget that the endowment supported
$49.2 million Distribution to Trinity’s operating budget
$6 million
New gifts made to the endowment
4.5%
Endowment spending policy rate
590
Number of individual funds that made up the endowment Figures above as of May 31, 2019
+3.7%
1-year annual return* (2018-19)
+7.8%
10-year annualized return*
*Long-Term Investment Pool, net of fees, as of 06/30/2019
Trinity University’s Endowment Portfolio Overview After several strong years of market performance, the endowment decreased by a net $41 million in FY2019. The decrease was driven by investment returns across the Long-Term Investment Pool (LTIP) and Funds Held-InTrust (FHIT) portfolios (+$11 million in investment gains and income) and gifts and other additions (+$4 million) while distributing $56 million to the University for the operating budget and non-operating activities. Beginning Value
$ 1,328
Gains and Income
$
11
Endowment Gifts
$
6
Other Additions
$
(2)
University Distributions
$ (56)
Ending Value
$ 1,287
DID YOU KNOW? Endowment gifts are at a five-year high.
University Distributions $49 million of the endowment’s distributions went to the University’s operating budget, while $7 million contributed to long-term University initiatives, such as building maintenance and renovation planning, that are not part of Trinity’s operating budget.
(in millions, rounded)
Portfolio Value Growth Over Time
2009-2019
$1,400 $1,239 $1,200 $1,000
$1,108 $833
$930
$800
$1,150
$1,328
$1,287
$1,068
$959 $867
$600 $400 $200 $ in millions
2010
2011
2012
2013
2014
2015
2016
2017
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
Source: Trinity University audited financial statements, as of 05/31/2019
2018
2019
Distributions
35.0%
The endowment is critical to supporting Trinity’s mission
34.0%
30.0%
As a leading liberal arts and sciences university with a 150-year history and commitment to undergraduate education, Trinity aspires to redefine liberal arts education for the 21st century by exemplifying what it means to provide a transformational academic experience for students. Driven by strong core values, embracing innovation, and a focus on the individual, the University strives to offer all the benefits of a highly personalized, small university experience with large university resources. This vision and mission could not be accomplished without the support of the endowment, as it represents one of the largest funding sources for the University operating budget. The endowment’s ability to provide this level of funding is driven by the performance of the LTIP and FHIT investment portfolios and the continued support of its alumni and donor community. In FY2019, the Trinity endowment contributed $49 million to the operating budget, representing 34 percent of total operating revenues. The amount of support the endowment provides to the operating budget is double the average and median for private colleges and universities1. This level of support allows Trinity to maintain its commitment to the student experience, which includes strong scholarship and financial aid support.
25.0% 20.0% 15.0%
17.5% 14.1%
10.0% 5.0% 0.0% Endowment Support of Operating Budget
Trinity University
Private College & University Average
Private College & University Median
1. Cambridge Associates Private Colleges and University’s 2018 Annual Review of Endowments. Data set includes 76 endowments.
Compound Annual Returns The long-term financial objective of the LTIP 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 into perpetuity. The following chart details the annualized returns over trailing periods within the last 10 years:
Long-Term Investment Pool (LTIP) LTIP Asset Allocation Diversification provides benefits to an investment portfolio through exposure to assets with different sources of economic return. In an effort to better serve the long-term mission of the University and deliver superior risk-adjusted returns, Trinity has continued to diversify the LTIP over the past 20 years. The University maintains a portfolio allocation that captures long-term endowment growth through investments in a variety of asset classes across financial markets globally. 100%
9.0% 7.9%
90% 80% 70% 60%
4.6%
3.7%
50% 40% 30%
1 Year
3 Years
5 Years
10 Years
Trinity Investment Returns (net of fees) All figures as of June 30, 2019
20% 10% 0% 1999
2001
2003
Fixed Income and Cash
2005
2007
Inflation Hedge
Emerging Market Equity
2009
2011
2013
Hedge Funds Global (ex-U.S.) Equity
2015
2017
2019
Private Equity and Venture Capital U.S. Equity
Campus Impact The Long-Term Investment Fund consists of 590 individual funds—an increase from last year’s 585, thanks to five newly endowed scholarships. Approximately 58 percent of those funds constitute true endowments—gifts restricted by donors to provide long-term funding for designated purposes. The remaining funds represent quasi-endowments— money that the Board of Trustees designates for key University purposes and treats as endowments. Both of these endowment classifications are governed by the University spending policy and actively contribute to Trinity’s operating budget. The 590 endowment funds are broadly categorized and support many areas across campus. LOANS 8 funds $35,871,782 The endowment supports a loan fund program for student financial aid and academic support.
GENERAL 177 funds $479,988,497 Endowment funds support university expenses, the recruitment and retention of exceptional faculty and staff members, and undergraduate student research across a variety of disciplines.
Tigers often make endowment gifts to combine their passion for Trinity with a desire to honor someone close to their heart or to create possibilities for future students. This year, alumni and parents gave scholarship gifts in honor of two members of the Trinity community who passed away—sociology professor Michael Kearl and student Robert Foye. Other gifts created opportunities for student fellowships and chemistry research.
$911,854,648
UNRESTRICTED: $355,222,090 No donor restrictions but can be designated by the Trustees for an endowment
RESTRICTED: $556,632,558 Includes temporary and permanently restricted donor funds
SCHOLARSHIP 293 funds $211,395,167 The greatest number of endowment funds support undergraduate and graduate scholarships.
BUILDINGS AND GROUNDS 32 funds $62,570,484 Funds from endowments not only support buildings on campus but also provide money for the care of Miller Fountain and the Parker Chapel organ.
FACULTY 61 funds $112,048,410 Funds supports faculty in 18 different disciplines, including endowed professorships, lectureships, fellows, and faculty development.
Endowment Gifts have reached a five-year high.
TOTAL
$5,962
$5,000
$5,964
$6,016
FY18
FY19
$4,179
$4,000 $3,000 $1,810
$2,000 $1,000 $ in thousands
FY15
FY16
FY17
Donor Spotlight The Wetz Stoddard Scholarship A gift to the endowment provides a permanent and continuous impact on the University and its students. In 1999, Phil ’73 and Linda ’72 Wetz established an unrestricted undergraduate scholarship in honor of their parents, Arnold and Loraine Wetz and John and Edna Stoddard.
COATES LIBRARY 19 funds $9,980,308 Funds have been spent on resources for the education collection, including Studies in Art Education, School Arts, Literacy Research and Instruction, Journal of Education and the Journal of Learning Disabilities. Endowment funds also help support SocINDEXFull-Text and American Sociological Review.
Endowment scholarship distribution (~$11.017 million) covers 17.5% of student financial aid requirement (~$63 million).
Investment Spotlight In FY2019, Trinity made its first commitment to a private investment fund that focuses on investing in sustainable real assets—real assets that have renewable inputs or are fundamentally more efficient than conventional real assets. The fund’s investments extend across energy, agriculture, transportation, and real estate with a goal to produce strong financial returns while generating a direct, positive environmental impact. As long-term stewards of capital, the University is tasked with bridging the past with the future and must manage risks over multiple time horizons, ranging from the risk of losses in a severe
market dislocation to long-term risks, such as climate change. Perpetual discovery is an important factor in successfully navigating these portfolio dynamics, and through this commitment, Trinity has partnered with some of the leading investors in sustainability. Importantly, the investment firm tracks its sustainability footprint. In calendar year 2018, its investment program successfully avoided 178,000 tons of C02 equivalent emissions, sustainably managed 9,000 acres of land, and contributed to a more ecologically friendly global community and environment.
“We had three goals in funding this endowed scholarship. First, we wished to honor our parents’ sacrifices, which allowed us to benefit from a Trinity education. This was particularly important for Phil since he was the first in his family to attend college and received financial aid. Second, we wanted to thank the Trinity staff and faculty members who believed in us before we believed in ourselves and provided a foundation which changed the course of our lives. Finally, we wanted to help future students who needed financial aid and who would benefit from the Trinity experience, as we did. Since every course we took at Trinity (from music appreciation to calculus) benefited us in some way, we wanted this scholarship to be open to all students and have been pleased that the recipients’ majors have ranged from drama to pre-med. Each time we meet a Wetz Stoddard scholarship recipient, we give thanks that this is a gift which keeps on giving.” –Phil and Linda Wetz
“This scholarship is helping me fulfill my dreams here at Trinity as a biology major and ancient Mediterranean studies minor.” –Jenna Shultz ’21
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If you have questions, 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 210-999-7320.
In 2018, Andrew Aertker ’21 and his business partner Gavin Buchanan ’20 founded the medical startup company PATCH—Pill-Administering Technology for Compliance Healthcare. This smart pill bottle allows clinical trial researchers to ensure their patients are taking the correct dosage of medication. The startup was awarded $15,000 in prize money from the Stumberg Venture Competition in 2018. Since their win, the pair has raised two rounds of funding, with the latest at a $10 million valuation, through private investment to finance their burgeoning company. Aertker is the recipient of the Donald R. Philbin III Memorial Scholarship, which supports students who are involved with entrepreneurship.
“I took a gap year before coming to Trinity and spent the latter half of that year working at a tech startup in Madrid. Coming to Trinity, I wanted to pursue the startup culture and building an idea from ground zero. The kinds of things I’m learning through working on our business are invaluable—understanding the fundamentals of corporate law, writing and developing software to function at scale, and dealing with actual negotiations with large pharmaceutical companies. When I talk to some of our advisors about what we’re doing, they’ve said, ‘You’re getting your MBA right now. It’s the best way to learn.’ I’m receiving a comprehensive education at Trinity that I really couldn’t have gotten anywhere else. It’s an adventure that I never expected to take.” ANDREW AERTKER ’21 Bachelor of Science in Computer Science Bachelor of Arts in Philosophy