Organic Benchmarks for University Endowments

March 2017

Can a university’s characteristics be a better indicator of an endowment’s effectiveness than endowment size? 

Summary

Organic benchmarks based on university characteristics – such as tuition discounts, per-student endowment, endowment payments to university budget, and total student enrollment – can be telling measures of endowment effectiveness. By comparing university goals with the use of endowment assets, this study shows that endowment size alone does not sufficiently measure endowment asset performance.

Key Insights
Organic benchmarks need to reflect the areas a university seeks to improve the most using endowment assets.
Endowment size is just as ambiguous as organic benchmarks in evaluating how effectively endowment assets are being employed.
Organic benchmark results should be compared only among universities similar enough to make legitimate comparisons.
Methodology

The author examined endowment performance at 898 universities between 2002 and 2014. Using data from NACUBO and the National Center for Education Statistics, he separated the universities into three groups based on endowment size and university characteristics to measure how effectively universities manage their endowment assets.

Larger endowments experience more growth when employing organic benchmarks.
Download Report Materials
Authors

About TIAA Institute

The TIAA Institute helps advance the ways individuals and institutions plan for financial security and organizational effectiveness. The Institute conducts in depth research, provides access to a network of thought leaders, and enables those it serves to anticipate trends, plan future strategies and maximize opportunities for success.
Related Publications

Related Publications

AGB Brief Cover

The Worth of Endowments in Higher Education

April 2019

U.S. colleges and universities hold more than $500 billion in endowment assets, but many people have a poor grasp of these assets’ purpose and value.

Higher Ed Philanthropy Image

Key Issues Facing Higher Education Philanthropy

March 2019

In an era of declining public funding, private philanthropy has played an increasingly vital role for both public and private institutions.

Adjunct Faculty Image

Adjunct Faculty: Personal Finances and Retirement Savings

March 2019

The ranks of adjunct faculty have increased rapidly in recent decades. How are these individuals faring financially?