Endowment on the rise
Posted on February 21, 2008
The James Madison University Endowment grew by 30 percent during the 2007 fiscal year due to a combination of $6.4 million in cash gifts and $5.2 million in investment revenue.
“During the whole course of the [Centennial Capital Campaign] private giving has increased steadily,” said Joanne Carr, senior vice president of external affairs and fundraising.
Tom Schaeffer from the JMU Foundation said the foundation is a non-profit organization established to support the university through gifts.
Schaeffer said that the majority of people who give to the endowment are alumni, faculty and staff and people with an interest in JMU.
Carr said that the endowment is the equivalent of a bank account. She said the principle is not spent, but the revenue gained from the investment is. Carr added that the increase in the endowment size comes from combining new gifts with revenue from old investments.
“It’s a combination of new gifts that are received and the successful investment of what’s already there,” she said.
Schaeffer said that the endowment provides stability to the university finances. He also said that it helps the university weather state shortfalls in the budget.
“Endowments are really important assets for the university because it helps to stabilize financial resources,” he said.
In addition to stabilizing university finances, the endowment provides for scholarships and faculty support. Carr said that university endowments support hundreds of scholarships.
“A donor will make a contribution and set up scholarships that will last forever,” she said.
Schaeffer said that the university is expecting to see continual growth over the next few years. Although, Schaeffer said that another year of 18 percent returns on investment is not likely because it depends on the market state.
“[We] hope to average 10 percent return over an 8-10 year period,” he said.
As compared to other universities in Virginia, JMU has a relatively small endowment size. The University of Virginia has over a billion-dollar endowment and Virginia Tech has close to a billion dollars according to Schaeffer. He said JMU’s endowment size is comparable to Longwood University.
Both Carr and Schaeffer said that JMU’s endowment size is relatively small because JMU started fundraising later than usual. U. Va and Va. Tech have been in existence longer and have a much larger alumni base.
