Home › Archived forums › Archived Forums › Meeting with Trustees, postponed… UPDATE: progress is being made! › Data-July 27, 2017
This topic contains 3 replies, has 1 voice, and was last updated by BeenThere 7 months, 2 weeks ago.
February 9, 2018 at 5:42 pm #533
Nonprofits including college and universities with large endowments are collecting more than twice as much money as they are spending on grants, facilities, administrative and other costs, a new data analysis of 1,600 organizations by The Chronicle of Philanthropy shows. In fact, for 253 of the more than 1,600 nonprofits studied, the dollars flowing into their endowments over six years exceeded the dollars flowing out by a ratio of more than four to one. The graphic above shows the ten largest endowment gains during the period (2010-2015) of the analysis. As reported by the Chronicle:
“The findings raise questions about the size of their swelling endowments at a time when Congress is taking a closer look at the issue. Orrin Hatch, the chairman of the Senate Finance Committee, has said big university endowments will be scrutinized as part of Republicans’ review of the tax code this year. Among the concerns is that the richest nonprofit institutions are sitting on huge and growing reserves — their investment returns are not taxed — even as many students struggle to pay for postsecondary education.
While colleges dominate the list of the biggest endowment holders, a Chronicle study of large nonprofit endowments shows that other types of nonprofits are also adding dollars much faster than money is going out.
The Chronicle’s analysis looked at nonprofits with at least four years’ worth of endowment data from the start of the 2010 fiscal year through the end of the 2015 fiscal year. It focused on endowments with at least $35 million and included community foundations but not private foundations. Private foundations are required to spent at least 5 percent of their endowments a year, while other endowments face no legal spending requirements. The analysis shows that:
Disbursement rates varied widely. At the top, New England Law, Boston, added $818 for every $1 going out. At the bottom, Albuquerque Academy was among the handful of shrinking endowments; it spent $1 for every 30 cents coming in.February 9, 2018 at 7:32 pm #538
Thanks for a great report, BeenThere.
At the bottom, Albuquerque Academy was among the handful of shrinking endowments; it spent $1 for every 30 cents coming in.
Just ran the numbers: this agrees nicely with the data in Mr. Hibbett’s chart.
Here again, more testimony that spending way beyond a prudent rate has caused the damage to the Academy’s endowment. The trustees have an ethical obligation to step up and take ownership of this problem.February 9, 2018 at 8:40 pm #547
Thank you for these wonderful posts. Very informative. I haven’t seen these stats before.
You also sound like you are doing your best to be objective and unbiased, which I appreciate.February 9, 2018 at 9:59 pm #555
Jack and Redux, thank you for your confidence. I am an educator at heart with a deep and abiding connection to the Academy. I count some members of the community among my good friends. I am not a native New Mexican, but I have decades of experience here and want only the best for this institution. I have no horse in today’s race, but hope to offer information and perspective that will help those who do to ask the right questions.
I have made quite a few statements about historical precedent, endowment management, and spending decisions. I would also recommend that fund raising be a topic of conversation. Who is in charge of this, and who authorized the launch of a campaign that amounts to simply making up for the mistakes of others? I would want to know:
1) what qualifications the head development person brings to the job?
2) who are the top five donors in the past five years?
3) what kind of participation they had in the launch of the campaign?
It is OK if fundraising leadership chooses not to reveal names. This is protective of the donors’ privacy and shows integrity in the fundraising program. However, pushing the issue on this should reveal something about the competence of leadership.
If potential donors do not feel part of a longer term strategic financial plan, they are merely re-arranging deck chairs on the Titanic.
The forum ‘Meeting with Trustees, postponed… UPDATE: progress is being made!’ is closed to new topics and replies.