Fina ncia l R eport on Endow ed Fu n ds YEAR ENDED JUNE 30, 2023
Valparaiso University Endowment Management The University assumes the responsibility for ensuring that your gift to the endowment supports its specified purposes. Gifts to the endowment are invested in the University’s overall endowment, which is a balanced portfolio invested in diversified asset classes. The Capital Planning and Investment Committee of the Board of Directors and senior financial management of the University oversee endowment investments and are supported by the University’s independent investment management advisors.
Asset Allocation as of June 30, 2023
Real Assets 13.9% Equities 68.9%
Fixed Income 17.2%
The Capital Planning and Investment Committee of the Board of Directors establishes the investment policy with an objective of achieving optimal returns within acceptable levels of risk and volatility.
Financial Report on Endowed Funds Endowment Policy The University’s endowment policy provides for both long-term asset growth and spending support for University programs. The two key components of endowment policy management — asset investment strategy and endowment spending — are designed to help achieve intergenerational equity. Intergenerational equity is the ability of the endowed assets to be equally available, in real terms, to both current and future generations. The Capital Planning and Investment Committee of the University’s Board of Directors regularly reviews and adjusts the endowment asset allocation strategy and monitors investment returns. During the fiscal year ending June 30, 2023, the University’s endowment benefited from its broad asset class diversification, including access to investments in private equity and venture capital. The University’s investment portfolio is constructed to serve as a perpetual asset pool and is managed to earn strong returns over longer time periods. The University cautions donors when measuring relative performance over one-year time periods given the longer-term objective of intergenerational equity. Results from the most recently published NACUBO Study of Endowments indicate that the University’s endowment investments performed in the upper decile as compared to 678 participating institutions for three-, five-, and 10-year returns.
Investment Returns as of June 30, 2023
1 Year
-0.9%
3 Years
13.7%
5 Years
10.0%
10 Years
9.5%
-3
0
3
6
9
12
15
Source: Commonfund
$46,074
$45,747
$60,000
$45,695
$110,025
$81,085
$74,012
$65,895
$80,000
$57,978
$100,000
$43,612
$150,000
$120,000
$43,400
$315,553
$326,748
$350,627 $254,282
$250,417
$235,218
$202,384
$200,329
$200,000
$177,976
$250,000
$163,350
$300,000
$204,706
$350,000
$259,042
$400,000
$110,239
Endowment Per Student as of June 30, 2023
as of June 30, 2023 (in thousands):
$119,301
Historical Endowment Investment Balances
$40,000
$100,000
$20,000
$0
20 20 20 20 20 20 20 20 20 20 20 20 12 13 14 15 16 17 18 19 20 21 22 23
20 20 20 20 20 20 20 20 20 20 20 20 12 13 14 15 16 17 18 19 20 21 22 23
$10,000
$23,756 $16,024
$11,220
$8,405
$15,000
$10,887
$20,000
$18,619
$16,837
$25,000
$8,871
The rate of spending from the endowment is approved annually by the Board of Directors at the time the annual budget is adopted. The established rate is combined with a smoothing provision that adjusts spending gradually to changes in the endowment’s market value. The amount available under the spending policy is based on a weighted average of prior spending adjusted for inflation and the current market value of the endowment. In addition, the Board of Directors is able to authorize further amounts for appropriation above the standard spend rate as it deems appropriate. In fiscal year 2023, the Board authorized an additional endowment spend of $6.5 million, of which $2 million was primarily in support of enrollment marketing initiatives and $4.5 million in support of the newly implemented Strategic Plan and campus operations.
$19,301
as of June 30, 2023 (in thousands):
SPENDING POLICY
$24,839
Endowment Spending
Endowment Payout
$10,502
$0
$9,469
$50,000
$5,000
$0
20 20 20 20 20 20 20 20 20 20 20 20 12 13 14 15 16 17 18 19 20 21 22 23
Investment Governance The Capital Planning and Investment Committee of the University’s Board of Directors oversees the endowment investments. The members of the committee have extensive backgrounds in financial management and investing. The
committee is responsible for developing and recommending investment policy, selection, review and evaluation of investment managers, endowment asset allocation, and developing endowment and spending policy recommendations.
510 Freeman St. | Valparaiso, Indiana 46383-4525 | donorrelations@valpo.edu | 219.464.5968 or 219.464.6818