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Endowment of $3.49B makes University of Pittsburgh 25th richest in U.S.

Debra Erdley
| Friday, Jan. 30, 2015, 12:01 a.m.

A half-billion-dollar bump in the value of the University of Pittsburgh's endowment last year boosted it into the company of the 25 richest university endowments in the nation.

A survey released Thursday that charts the value of endowments at 832 colleges and universities across the country ranks Pitt 25th with an endowment valued at $3.49 billion as of June 30, 2014. The school moved up from 26th the prior year, when its holdings were valued at $2.9 billion.

The annual National Association of College and University Business Officers-Commonfund Study of Endowments, found university endowments, which suffered during the 2009 downturn, averaged a 15.5 percent return on investment last year, up from 11.7 percent the prior year.

The new totals include returns on investments and new contributions, minus any withdrawals and fees.

For Pitt, where the endowment ranked 31st in the nation with $1.36 billion in 2004, the new numbers are heartening.

But families who expect a break in tuition and costs at Pitt, often cited along with Penn State as having the highest resident tuition of any public university, may be disappointed.

Although Pitt is sitting on a large investment portfolio, only a small portion of it — an average of 4.25 percent — trickles down to it each year.

“We've been very fortunate to have a number of very, very generous donors,” said Clyde Jones, university vice chancellor for health services development.

“The kind of endowed funds we are getting are increasingly more restricted. It's helped increase the number of (faculty) chairs, scholarships and research funds quite dramatically,” Jones said. “But donors are very savvy. They want to be sure we're being good stewards and that there is a good result for the money — that we're hiring top talent and recruiting the best students.”

It's that way at most universities, where the survey found disbursements from endowments accounted for an average of 9.2 percent of institutions' total operating budgets last year.

Commonfund Institute Executive Director John S. Griswold said the survey, which also looked at endowment investments, suggested universities are limiting risk after taking a hit during the financial crisis of 2007-09

Like Pitt, Penn State, which also recently closed a successful fundraising campaign, experienced growth. Its endowment increased from $2.9 billion to $3.44 billion, a number that earned it a rank as the 27th richest endowment in the nation.

Despite an increasing emphasis on fundraising, the Pennsylvania schools' endowments still lag behind the richest, including: Harvard's $35.8 billion fund; the University of Texas System, with $25.4 billion; and Yale, with $23.9 billion.

Carnegie Mellon University reported a significant increase in the value of its endowment — from $1.37 billion to $1.59 billion — but noted that the total included its combined endowment assets and a portion of assets held by the Dietrich Foundation, which eventually will benefit CMU.

Elsewhere, a single donor can make a significant difference at a smaller school. Chatham University's endowment value increased by 29 percent. It grew from $75 million to $97 million, owing in large part to a single $15 million gift from the Falk Foundation.

Debra Erdley is a staff writer for Trib Total Media. She can be reached at 412-320-7996 or derdley@tribweb.com.

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