FOR IMMEDIATE RELEASE

Higher Education Endowments One Year Return Rate Matches Long Term Investment Goals

Annual Earnings Enough to Cover Typical Yearly Educational Spending, Fees, and Inflation Rate

Please scroll to the bottom of this page for accompanying data tables.

Washington, DC, January 23, 2006 --- An average one-year return rate of 9.3 percent for fiscal year 2005 provided college and university endowments with the investment income necessary to pay for annual educational spending and various management fees along with adjustments to preserve the endowment against inflation. A matching ten-year compounded 9.3 percent return rate validates the investment strategies employed by higher education endowment managers to maximize both current and long-term spending for the benefit of their institutional stakeholders. This according to a survey released today by the National Association of College and University Business Officers (NACUBO) in conjunction with TIAA-CREF, a national financial services organization.

Taking into consideration an approximate annual inflation rate of three percent, a typical annual educational spending rate of five percent of total endowment holdings, and various operational management fees at one percent of total holdings, a nine percent annual return rate is optimal for many higher education endowments. Spending rate is the percentage of an institution’s endowment contributed annually to its operating budget, and is usually determined using recent annual performance data.

The NES is the largest and longest running yearly, voluntary survey of higher education institutions and their foundations about their endowment holdings. Survey information is collected and calculated on behalf of NACUBO by TIAA-CREF. Seven hundred forty-six (746) institutional participants from the United States and Canada with $299 billion in endowment holdings took part in the 2005 NES, the largest group in the 33-year history of the study and the fifth consecutive year of record-breaking participation since NACUBO began their partnership with TIAA-CREF in 2000.

A wide range of endowment sizes and investment return rates were reflected among this year’s participants, with most endowments holding less than $100 million in total assets:

NACUBO president James E. Morley, Jr. explains the importance of endowments to higher education institutions: “Earnings from endowment investments are a critical primary funding source for both independent and public institutions. Endowments -- and private financial support in general -- are one of three primary revenue sources for colleges and universities; the other two being public funds and tuition income. Endowment income is an increasingly vital funding element of many college and university budgets and will undoubtedly remain so for the foreseeable future.”

TIAA-CREF Asset Management Managing Director Nancy Heller adds, "TIAA-CREF is pleased to continue to work with NACUBO to produce such a valuable tool for the academic and research institutions that we have been serving for more than 85 years. Our detailed analysis of the 2005 NES data indicates that institutions should look beyond their asset allocation mix to understand long-term investment success factors. We found that while asset allocation is critically important, manager and strategy selection, as well as resources, also matter.”

The complete 2005 NES report is now available on CD-ROM. The report contains tables and graphs that illustrate essential data on all aspects of endowment management including endowment size, rankings, historical investment performance, asset allocation, spending policies, management expenses, and manager selection. The cost for the full study is $74.95 for NACUBO members and $199.95 for nonmembers. Both the 2005 NES CD-ROM and hard copy executive summary are available for purchase through NACUBO's online bookstore.

TIAA-CREF is a national financial services organization and the leading provider of retirement services in the academic, research, medical and cultural fields. With more than $360 billion in combined assets under management (9/30/05), TIAA-CREF is ranked one of Fortune magazine's 100 largest U.S. companies (April 2005). Further information can be found at www.tiaa-cref.org.

NACUBO, founded in 1962, is a nonprofit professional organization representing chief administrative and financial officers at more than 2,100 colleges and universities across the country. NACUBO's mission is to promote sound management and financial practices at colleges and universities. www.nacubo.org.

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Editors: Please e-mail Damon Manetta for abridged copies of the NES. (Available only to credentialed members of the press.)

Selected Tables From the 2005 NACUBO Endowment Study

1. All Institutions Listed by Fiscal Year 2005 Market Value of Endowment Assets With Percent Change Between 2004 and 2005 Endowment Assets
2. Average Investment Pool Compounded Nominal Rates of Return for Fiscal Year Ending June 30, 2005 and for Selected Three, Five, and Ten - Year Periods
3. FY05 Average Asset Class Allocation of Total Assets

Note: NACUBO does not provide return rates or asset allocations of individual institutions under any circumstances due to a confidentiality agreement with study participants.