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College Endowment Average Return Falls to 2.4 Percent in FY15, Endowment Spending Up Sharply

January 27, 2016

Final results from the 2015 NACUBO-Commonfund Study of Endowments (NCSE) show that participating U.S. higher education endowments and affiliated foundations achieved an average investment rate of return of just 2.4 percent (net of fees) for the 2015 fiscal year (July 1, 2014 to June 30, 2015). This year's result is a sharp reversal from FY14, when endowments returned, on average, 15.5 percent. The lower return for FY15 contributed to a decline in long-term 10-year average annual return, which fell to 6.3 percent from last year's 7.1 percent.

Despite the lower returns, 78 percent of NCSE participants withdrew more funds from their endowments this year to support student financial aid, faculty research, and other mission-critical campus operations. The median increase among institutions that increased endowment spending was 8.8 percent, well above the 0.7 percent increase in inflation.
The latest NCSE report includes 812 participating institutions in the U.S. These schools collectively held $529.0 billion in endowment assets. While the average endowment was about $651.5 million, more than half the participants had endowments that were less than $115 million.

The press release and six tables from the 2015 NACUBO-Commonfund Study of Endowments are available on the public NCSE Web page.  

In addition, an online event, NACUBO Live! Results of the 2015 NACUBO-Commonfund Study of Endowments, will be broadcast direct from the 2016 Endowment and Debt Management Forum in New York City. Panelists will provide an overview of the results, look back at the challenges endowment managers faced in FY15, and review the strategies institutions used to confront volatile market conditions during the year. Registering for this event will allow you to view the session online and submit questions to the panelists. The session will take place on Thursday, February 4 at 10 am ET. Click here to register.

The 2015 NCSE final report will be available for purchase by March 2016. Once available, the online product will provide instant access to results of the study. Colleges, universities, and affiliated foundations that participated in the 2015 NCSE will receive complimentary access to the final report once it released.


Ken Redd
Director, Research and Policy Analysis