NACUBO Releases 2018 Endowment Study

Title: 2018 NACUBO-TIAA Study of Endowments

Authors: National Association of College and University Budget Officers and TIAA

Source: National Association of College and University Budget Officers

The National Association of College and University Budget Officers (NACUBO) and TIAA recently released the 2018 edition of their annual NACUBO-TIAA Study of Endowments. The 2018 study surveys the investment allocations, growth, and distributions of 802 college and university endowments totaling over $616 billion in assets.

The survey found that participating institutions’ endowments grew 8.2 percent (net of fees) over FY 2018, down from 12.2 percent growth in FY 2017 on the back of weaker returns in U.S. and foreign equity markets, but well ahead of the 5.8 percent average annual growth over the past decade.

As in years past, larger endowments tended to be invested more aggressively—with larger allocations in alternative strategies like private equity and hedge funds—and yielded larger average returns. While endowments of under $25 million grew by an average of 7.6 percent in 2018, endowments over $1 billion returned 9.7 percent.

For the first time, the 2018 survey also asked how institutions distributed their endowment withdrawals. In total, participating institutions reported that 49 percent of their 2018 withdrawals were spent on financial aid, with smaller shares spent on academic programs, faculty positions, and other items.

—Sam Imlay