CMU’s endowment fund ranks ninth in MAC following 2012 fiscal year

Editors note: This story has been adjusted by the author to correct an inaccuracy.

Central Michigan University’s endowment fund is ranked ninth in the Mid-American Conference following the end of the 2012 fiscal year, according to the NACUBO-Commonfund Study of Endowments.

CMU’s total endowment for the 2012 fiscal year was $81,590,000 ranked 440th out of the 843 U.S. and Canadian universities. It dropped five percent between the 2011 and 2012 fiscal years.

The percent change reflects the net impact of withdrawals to fund institutional operations and capital expenses, the payment of endowment management and investment fees, the additions from donor gifts and other contributions and the investment gains or losses.

“CMU follows its own investment strategies, and some years we rank higher,” said David Burdette, vice president for finance and administrative services.

The fiscal year differs from the calendar year, expanding from July 1 through June 30.

On average, the 843 universities saw a loss of 0.8 percent over the fiscal year. The average total endowment fund for the 843 institutions was $490,946,000.

“It’s important to not focus on just one period of time like the difference just in six months,” Burdette said. “It’s important, especially on endowments, to focus on a long period of time; that’s what the endowment is for.”

The long-term, 10-year returns for the 2012 fiscal year was 6.2 percent, a 0.6 percent increase from the 2011 fiscal year, which suggests an improvement in many institutions’ long-term performances.

Harvard University ranked No. 1 with a 2012 fiscal year endowment fund of $31.7 billion. The University of Texas ($18.3 billion), Princeton University ($17.1 billion), Stanford University ($16.5 billion) and Yale University ($15.3 billion) rounded out the top-five institutions.

“We’ve got a diversified set of investments, but Harvard can get into markets we can’t even think of,” Burdette said. “Not only do they have the dollars, but a lot of those investment options have entry fees we can’t even think about.”

Not only does Harvard have more to invest, but Barrie Wilkes, associate vice president of financial services, said a lot of private institutions have a large percentage of their operations budget coming out of their endowment fund.

While CMU differs from private institutions by separating endowment funds and their operations budget, Wilkes said he is always looking to see what other schools are doing with their investments.

“There are differences in size as far as opportunities, but we want to know what Harvard’s doing, or what Western (Michigan) is doing,” Wilkes said. “You see what they’re doing and you look at Yale and Texas and they’re doing something different. I don’t think there is an ideal strategy.”

Buffalo, ranked 143rd, is the highest-ranking MAC school with a 2012 endowment of $511,020,000.

The University of Michigan has the largest endowment in the state at almost $7.7 billion. Despite a decrease of 1.8 percent from its 2011 fiscal year, UM ranks seventh.

Michigan State University has the second largest-endowment in the state at $1.4 billion, ranking 51st overall.

WMU ranks 264th with a $204,124,000 endowment, and Eastern Michigan sits at the bottom of the MAC, ranked 566th with a $50,562,000 endowment.

Kent State was not included in the list, reducing the number of MAC schools included to 11.