Endowment rebounds by 22 percent
Finally rebounding from the financial downturn of previous years, the College saw a nearly 22 percent investment return in its endowment during the 2011 fiscal year ending June 30.
The endowment increases affected other Maine schools as well, with Bowdoin College seeing an increase by 22 percent to $901 million and Bates College an increase of 20 percent to $231 million. Financial analysts attribute the rise to an improving economic situation and the steadying of the stock market, as noted in Josie Huang’s Oct. 4 article for the Maine Public Broadcasting Network, “Maine Private Colleges’ Endowment Soaring.”
The College’s endowment rose to $611 million, an increase of over $100 million. As quoted in Huang’s article, the College’s Treasurer and Vice President for Administration Douglas Terp said, “It comes to just under $13,000 of support for each student that’s at the College.”
According to Huang’s article, Terp stated that many funds were gained because of a roughly 90 percent equity portfolio and about $289 million in contributions from alumni and sponsoring foundations. Older institutions like Bates, Bowdoin and Colby have economic advantages because of alumni support and the attraction of new students. Terp continued, “Obviously, [Colby, Bowdoin and Bates have] had more time to have relationships and have people have positive experiences and have commitment and ties to the institution and [alumni who] want to give back for the opportunity that they received as a result of people who contributed long ago.”
Terp said an e-mail that “since the endowment is invested mostly in equity-type investments...we expect that it will have a certain amount of volatility. The formula we use to determine how much support the endowment provides the operating budget each year tends to smooth out some of the volatility.” He noted that the June 30 value of $611 million is “an audited figure.” The College develops an estimated endowment value each quarter, and as of Sept. 30, the estimated endowment is roughly $564 million. “Colby’s endowment value will change as a result of a number of factors,” he said. “Financial market trends are certainly the key factor, and while the endowment is not pegged directly to the stock market, it will generally move in similar directions and orders of magnitude.”