Georgetown University’s Newspaper of Record since 1920

The Hoya

Georgetown University’s Newspaper of Record since 1920

The Hoya

Georgetown University’s Newspaper of Record since 1920

The Hoya

Endowment Rebounds To $1 Billion

The university endowment posted a 12.3 percent return on its investments in fiscal year 2010, increasing its value to $1 billion, a bounce back from the 16.6 percent drop to $883 million sustained in fiscal year 2009, according to university spokeswoman Julie Bataille.

Though university endowments made inroads toward recovery in fiscal year 2010, Georgetown’s endowment remains significantly smaller than those of its peers.

Harvard’s endowment, the largest in the nation, increased 11 percent to $27.4 billion in fiscal year 2010, while Yale’s grew 8.9 percent to $16.5 billion, Columbia’s jumped by 17 percent to $6.5 billion and the University of Pennsylvania’s by 13 percent to $5.7 billion.

According to University Spokeswoman Julie Bataille, the university’s comparatively small endowment is nothing new.

“Georgetown historically began formal fundraising efforts much later than our peer institutions,” Bataille said in an email.

As Vice President for University Finances Christopher Augostini wrote in a press release, the university’s transition from a regional university to a national institution in the 1980s coincided with a spike in advanced – and costly – research. Though the evolution brought the university international acclaim, it also drained funds.

Additionally, until 2004, Georgetown’s endowment had been managed not by a full-time investment officer, but by an outside consultant and the board of directors. Since hiring Larry Kochard as chief investment officer to manage the endowment in 2004, the fund’s value has grown from $680 million to its current value of $1 billion.

“We’re recovering,” Kochard wrote in a press release when the endowment first hit the $1 billion mark in 2007. “We’ve gone from being below average to above average. To go from being above average to being among the elite, that will take from five to 10 years.”

Until then, according to Bataille, the university will continue to do what it has for decades: Do a lot of good with relatively little.

“The endowment accounts for only 6 percent of our overall operating budget – well below many of our peers,” Bataille said.

In comparison, Harvard relies on its endowment returns to cover about one-third of its operating budget, while Yale’s endowment accounts for almost half of its operating budget.

As the university plans for its next capital campaign, after having posted above-average gains in endowment funds in 2010, Bataille said it is well positioned for future growth.

“Georgetown’s financial team will continue to focus efforts to manage investment and develop a financial plan that will enable the university to meet strategic needs – such as building the science center and keeping our commitments to need-blind admissions and meeting full financial aid for undergraduates – in this challenging economic environment,” Bataille said.

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