University endowment doubled last fiscal year

Sarah King
Staff Writer

VCU’s endowment increased by $888 million in the 2013 fiscal year, a larger increase than Virginia Tech and the University of Virginia saw combined.

The market value of VCU’s endowment grew by $888 million, or 203 percent, in 2013 and now totals $1.3 billion. The University of Virginia’s endowment value grew by $377 million and Virginia Tech brought in $65 million in returns for fiscal year 2013.

VCU president Michael Rao, Ph.D., called for an increase in institutional resources for better faculty salaries and start-up packages for new colleagues, a more “robust endowment” and investment in new learning spaces.

“I fear that we will soon hit a ceiling, in terms of what we can accomplish, if our resources do not match our talents and ambitions,” Rao said during his State of the University speech in late January. “Nowhere is this more plainly true than in our ability to invest in the success of our people.”

Tuition increased by 4.19 percent for the 2013-14 school year.  While VCU also has been affected by declining state funding, the university saw its endowment grow for the fiscal year of 2013.

“The role of private philanthropy is huge in regard to state institutions and making improvements. At VCU, while we’ve been successful, there are lots of opportunities in regard to doing more,” said Marti Heil, vice president of development and alumni relations. The president plays a very critical role in sharing his vision and building relationships with corporations, foundations, alumni and friends.”

The Review of Academic Spending and Workload at Virginia’s Public Higher Education Institutions report by the Joint Legislative Audit and Review Commission also states that the only in-state school above the 60th percentile is U.Va. due primarily to endowments. Schools with the largest need are George Mason University, Virginia Tech and VCU.

Heil leads the fundraising team in looking for and devising ways to bring in more resources and revenue to the university. An example of this is when the president meets with alumni and potential donors in New York when the men’s basketball team is competing in the Atlantic 10 tournament.

“We’re working to engage cities with large concentrations of alumni, and host things like donor events where we bring a student or faculty along to speak with the president and share some of the exciting things going on at the university,” Heil said. “The purpose is to reconnect by bringing a piece of VCU to cities like D.C., Los Angeles and Atlanta.”

Heil’s team’s job is to assist Rao in examining prospects and understanding how the invested money is benefitting the VCU community.

“Generally speaking endowments don’t support research except to the extent that they help underwrite professorships,” said Lawrence Hinckner, Virgnia Tech’s associate president for university relations. “Remember that an endowed professorship account underwrites just a small portion of a professor’s salary.  It rarely underwrites the entire portion.”

While Rao stressed the importance of funding for salaries and research, other state schools have different interests.

“A current priority of our fundraising efforts is actually to build that endowment for financial aid,” said McGregor McCance, U.Va.’s senior director of media relations. Over time, the university hopes to grow it to a point at which earnings from the endowment for financial aid will play a much more significant role in providing need-based aid to students.”

McCance also said that U.Va.’s endowment strength allows for the university to provide financial support and flexibility as other revenue sources change.

“Declining state support means the university must increasingly rely upon existing gifts and continued donor generosity in order to sustain its margin of excellence,” McCance said.

U.Va., which ranks 19^th in the country for endowments, was valued at $5.16 billion last fiscal year.