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In accordance with FASB Statement 157 and GASB research papers help Statement 31, institutions report endowment assets at their fair value.
The Statements say that the fair value of an investment is the price that would be paid in a current transaction between willing participants. Page 6 GAO-10-393 College and University Endowments Figure 2: Number of U. Institutions of Higher Education by Total Endowment Assets, 2008 Number of institutions 1,000 End-of-year endowment market value, 2009 dollars Source: GAO analysis of Department of Education data. In most cases, schools with relatively large total endowments also have relatively large endowments per student. As seen below in figure 3, most schools have relatively smaller endowments per student, and a few have much larger endowments per student. However, some schools with large total endowments may have much smaller endowments per student relative to other schools, and vice versa. Similarly, the total endowment for University of Texas system was the 4th largest in the country in 2008, but was the 118th largest per student. Page 7 GAO-10-393 College and University Endowments Figure 3: Number of U. Institutions of Higher Education by Endowment Assets per Student, 2008 Number of institutions 900 800 762 End-of-year market value per full-time equivalent student, 2009 dollars Source: GAO analysis of Department of Education data.
Among different types of institutions, private colleges and universities tend to have larger endowments than public ones. For instance, private institutions made up about two-thirds of U.
In 2008, for example, the median endowment size 10 We calculated numbers of FTE students based on fall enrollment of full-time and part- time graduates and undergraduates. Institutions with high minority enrollment also show a difference in endowment size when compared to other schools. The endowments of schools with at least 50 percent minority enrollment, both in total and per- student, are about one-third of the size of endowments at schools with less than 50 percent minority enrollment.
Nationally, total inflation-adjusted endowment assets held by U. Page 9 GAO-10-393 College and University Endowments Figure 4: Total Endowment Assets at U. Institutions of Higher Education, 1989 through 2008 End-of-year market value, 2009 dollars In billions 500 50 0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Fiscal year Source: GAO analysis of Department of Education data. Notes: The Department of Education did not have endowment data for any schools in 1990 and 1997- 1999 and for private schools from 2000-2002. Although this graph presents 20 data points for total endowment assets (including 7 missing years), it captures only 19 years of growth. This is because the first value — total endowment assets as of the end of 1989 — is equivalent to the beginning-of-year research papers help value for 1990.
Therefore, the growth represented in the graph is from the beginning of 1 990 through the end of 2008.
Eight of our case-study schools had data on market values for the 1989-2009 period. Data from those schools show that, despite recent losses, endowments at those eight schools showed substantial overall growth from 1989 to 2009. Page 10 GAO-10-393 College and University Endowments research papers help percent growth of endowments over their 1989 market values for the eight case-study institutions for which complete data were available. Figure 5: Percent Change in Endowments at Eight Case-Study Institutions, 1989 through 2009 Percent real growth over 1989 market value Fiscal year School 1 — — School 2 — — School 3 — — - School 4 research papers help ----- School 5 School 6. Notes: Percent growth was calculated using endowment market values in 2009 dollars. Although this graph presents 21 data points, it captures only 20 years of growth. This is because the first value — percent growth as of the end of 1 989 — is equivalent to the beginning-of-year value for 1990. Therefore, the growth represented in the graph is from the beginning of 1990 through the end of 2009. Only six of our case-study schools had data that permitted an analysis of what went into the change in endowment market value. Those data show that, since 1989, the largest contributing factor to the growth of endowments at the six schools was investment earnings. For example, officials at one case-study institution said that they generally target a rate of return for their endowment of 8. From 1989 through 2009, the average annual inflation rate for consumer prices generally was 2. For example, at one school, the average annual distribution rate from 1989 through 2009 was 4. The Higher Education Price Index is based on a fixed basket of goods purchased by colleges and universities, including faculty and administrative salaries, supplies and materials, and utilities. Page 12 GAO-10-393 College and University Endowments Distributions from Endowment Funds Are Typically Subject to Restrictions When donors establish an endowment at a college or university, they have the choice of leaving decisions about how to distribute the earnings generated by their gift up to the institution or designating research papers help how the funds may be used. The Department of Education does not collect information from all schools about endowment restrictions, so we developed information on endowment restrictions from our case-study schools. Data from case-study schools show that the distribution of most of their endowment assets is restricted for a particular purpose by the terms the donors stipulated when they made their donations. Officials at the schools we visited told us that it is unusual to receive an endowment without some sort of designation from the donor about how the endowment earnings are to be used.