JMU’s private giving rises
By Ben Baynton, staff writer
Posted on February 5, 2007

In a recent study conducted by the National Association of College and University Business Officers, the size of JMU’s endowment was ranked 548th out of 765 participating colleges. The growth rate of JMU’s endowment was 16.4 percent.

According to the NACUBO, the fair market value of JMU’s endowment is $39,073,000, which is the value of JMU’s endowment if it was all converted into cash.

However, other colleges, whose student bodies are much smaller than JMU’s, have seen their endowments increase tremendously. Jessica Shedd, director of research and policy analysis at NACUBO, said it is easier for smaller colleges to put up large percentage increases in their endowment because their endowments are much smaller.

For instance, Eastern Mennonite University’s endowment is almost $22 million and had a 19-percent increase last year, according to NACUBO. EMU’s student body’s size is approximately one-tenth the size of JMU’s. JMU’s total enrollment is 16,970 students.

Every year, students receive money from JMU in the form of scholarships. Money for those scholarships comes from endowments, which are usually started with a large monetary gift by a donor who wants something specific done with his or her money.

“If the endowment falls below its original value, then it will not be used that year,” said EMU’s vice president for Advancement Kirk Shisler.

The amount of stock that is sold depends on university policy.

“We determine what is a prudent amount to release to the university,” said Thomas Schaeffer, executive vice president and chief financial officer of JMU Foundation Inc.

“We look three years back at how the endowment has performed.”

 According to Schaeffer, the amount released is determined by the average performance of the endowment over the past three years multiplied by 4.5 percent.

“The larger institutions are more invested in longer-term investments than smaller institutions,” Shedd said.

Schaeffer added, “The best way to measure us is the long-term returns. We try and average a 10-percent average return over 10 years.”

 JMU itself does not handle its own endowments. This is very common for universities to do, with colleges such as William & Mary and Virginia Military Institute having their own subsidiary foundations for endowments. But when it comes to investing, JMU foundations use professionals.

“We hire professional money managers,” Schaeffer said. “We evaluate their performance every quarter.”