Georgetown’s endowment increased by over $200 million over the span of a year and a half starting in 2005, surpassing administrators’ projections and moving the figure ever closer to the $1 billion benchmark.
The university’s endowment stands at over $951 million, according to the latest available figures, which are through November 2006, university spokesperson Julie Bataille said. In June 2005, Georgetown’s endowment was just over $741 million.
According to The Chronicle of Higher Education, the endowment was the 76th largest in the nation as of June 30, when it stood at over $834 million, rising two slots from its 2005 fiscal year ranking.
“Georgetown’s board of directors and senior leaders are optimistic about the university’s financial position and potential for future growth,” Bataille said. “We’re meeting all key metrics and are operating at better-than-projected rates.”
Bataille said that the endowment increase is not likely to significantly affect any of the university’s ongoing construction projects, including the proposed McDonough School of Business Center and science center, because only a small portion of the endowment goes towards the annual operating budget.
The university’s investment portfolio, toward which most of the endowment goes, saw a 13.8 percent return in the 2006 fiscal year ending on June 30, said Meghan Woodsome, executive assistant in the university’s investment office. Endowment portfolios returned an average of 10.7 percent nationally during the 2006 fiscal year, according to the Chronicle of Higher Education. Georgetown’s portfolio increased 10 percent in the 2005 fiscal year, slightly higher than the national average.
Woodsome said that the university has diversified its portfolio in recent years by investing more in global markets, especially after Lawrence Kochard was named the university’s first chief investment officer in 2004. She said that the portfolio had previously been overcommitted in the U.S. stock market.
“It takes a while to implement” strategic changes, Woodsome said. “We have a much more holistic asset allocation.”
The university’s endowment, ranked 68th in the country in 2000 at over $745 million, decreased by more than 20 percent before 2003, but has increased in each of the three years since.
Bataille agreed that the creation of the CIO position has helped the university build its endowment each year.
“This … enables us to better respond, in a very competitive investment environment, in a more sophisticated and timely manner to market opportunities,” she said.
Harvard University had the highest endowment in the nation at the end of the 2006 fiscal year, at close to $29 billion. Yale University’s endowment rose 18.4 percent over the last fiscal year and, at just over $18 billion, was the second largest in the United States. Each of the eight Ivy League institutions has an endowment over $2.1 billion.
“Georgetown historically began formal fundraising efforts much later than our peer institutions and as a result [continues] to lag behind them in endowment revenue,” Bataille said.
“Our financial plans include efforts to continue to grow the endowment to be more comparable to our peer group and that will take place through a combination of investment and fund raising strategies,” Bataille said.
