The DePauw endowment explained

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A year-by-year snapshot of DePauw University's endowment. 
GRAPHIC BY KAITLIN WIREY 
correction: The dollar amounts should read millions. 

 

One of the most important factors in the DePauw University experience most students know nothing about: the endowment.

 “I knew it was money,” said sophomore Zoe Cunningham, “but I don’t know entirely what goes on.”

The endowment is a large fund of donations that the university manages and invests to help support students and programming. It’s a little like a savings account that the university tries not to spend.

DePauw’s endowment serves two primary purposes: to help close the roughly $20,000 per student gap between what it costs to provide a DePauw education and what students actually pay, as well as special programming.

 “Our endowment is the most powerful differentiator that DePauw has to a student’s education,” said Brad Kelsheimer, vice president for finance and administration. “We’re able to provide the education and experience that we provide because of the endowment.”

Of the $628 million endowment, about $330 million is restricted, meaning that it can only be used for specific purposes. Most donors designate for what they want their money to be used.  They can choose to have it go into the endowment and what purpose they want it to serve.

“Scholarship, programmatic interests, that’s the majority of endowed gifts,” said Kelsheimer.  “It’s often times based on the experience someone had at DePauw.”

The endowment grows largely through investment.

“We have an expert investment firm that handles our investment management approach,” explained Kelsheimer.

CornerStone Partners LLC, a Charlottesville, Virginia, firm serves as DePauw’s chief investment officer and is guided closely by the investment committee on the board of trustees. The firm hires fund managers based on DePauw’s investment policy statements.

 “The advisor directs the placement of our funds into different asset classes and different fund managers within those classes,” said Kelsheimer.

Another firm, Northern Trust, holds the funds and operates under the direction of CornerStone.

The return on the endowment, or the interest, is what is spent. If the university had to dip into the donated money, the endowment deplete.

The endowment faired poorly after the 2008 recession, dropping $120 million, but University President Brian Casey proudly announced at the Faculty Institute on Aug. 22 that it has fully recovered, even going beyond what was projected.

The endowment at June 30 was the highest DePauw has ever reported, but that doesn’t mean it’s perfect.

“Are we happy with it? We’re very happy with the growth. Is 628 million enough? No,” said Kelsheimer. “For us to provide the access that we want to provide and the experience we want to provide, it needs to be a billion dollars.”

One of the “measures of prestige in higher education,” according to Kelsheimer, is endowment per student.

“Wabash has an endowment that’s not as large as ours, but they have a very small student body, so their endowment per student is very large,” Kelsheimer said.  “That signals that if they manage it right they can provide an experience that’s funded from their endowment that we can’t.”

At DePauw, the endowment per student is about $275,000. Wabash College’s endowment per student is about $382,000.

Though students know little about the endowment, it affects them greatly. For example, of the $51 million of scholarships awarded last year, about one-third came from the endowment. Additionally, off campus study, faculty development and special programming all benefit from the endowment.

“Because of our endowment we are able to offer experiences to our students that other schools aren’t able to offer,” said Kelsheimer. “Frankly the key to the future student at DePauw and the future at DePauw is growing that endowment.”

Kelsheimer continued, “How cool would it be if every student had an international or off campus experience and didn’t pay a dime for it? How cool would it be need wasn’t ever an issue, if we could always meet 100% of need? [A larger endowment] would open up all kinds of experiences for our students.”