The university’s endowment has made a significant increase in the past year, skyrocketing from $457 million to $675 million most recently.
The endowment is funded primarily by gifts from donors. That money is invested, and the university is able to use a portion of the income from the funds to benefit the school.
Jack Rich, chief investment officer and president of the Abilene Christian Investment Management Company, said of the almost 1000 individual endowment gifts break down into three main categories to support the university.
“Scholarships will be a big part of that, about a third, about 15-20% is used for departmental uses, and about 50% goes to the general university budget to help support everything at the university,” Rich said.
Of the $675 million, the university targets spending about 4.5% of the value each year, meaning the university will benefit around $24 million this school year.
Rich said that the majority of the growth in the endowment can be attributed to increase in value of the investments.
“Virtually all of it is due to performance,” Rich said. “We just had a really strong year of earnings this past year, and that is really what drove the increase.”
Despite the endowment’s benefits to the university, it provides funding to ongoing annual investments not one time recurring projects such as the copious amount of construction happening on campus.
“We have a policy with our board that all new construction will be funded entirely with gifts so when you see construction going on, as opposed to the endowment funding, that is traditionally and typically funded by gifts from donors,” said Dr. Phil Schubert, president of the university.
With the endowment being so large in comparison to the size of the university, ACU is in an elite position allowing it to invest in things schools its same size might not be able to do, he said.
“It gives us a sense of boldness, it gives us a sense of strength that would allow us to endeavor to accomplish things that other institutions of similar size just wouldn’t be able to pursue,” Schubert said. “That’s exciting because it creates conversation about strategic priorities, goals and new initiatives that are much broader in terms of what we can consider trying to do than if we did not have an endowment the size of the endowment we enjoy.”