Endowment
The University's endowment provides financial stability and generates investment income that provides support for scholarships, academic programs, and other University needs.
The endowment's growth depends on three factors:
- the success of raising funds from individuals, foundations, and other organizations to establish and supplement existing endowments;
- the success of the investments for the endowment assets;
- the size of the annual spending rate, or the amount of funds applied annually to support University needs.
The Board of Regents has adopted a comprehensive investment policy outlining the targets for investment allocations of the endowment among domestic stock, international stock, fixed income, alternative investments, and other asset classes.
The policy also establishes performance targets for each of these asset classifications along with an overall endowment performance target measured against a standard set of benchmarks.
With this policy and the assistance of staff and investment consultants, the Investment Committee of the Board regularly reviews the performance of each sector of the endowment and, if necessary, changes those managers not meeting expectations.
The Board has also set the spending rate as a percent of the average of the most recent three year end balances of the endowment.
To enable the endowment to grow faster, the Board has been gradually reducing the spending rate from 5.5% to the current level of 4.5% of the three year average.
With the careful application of the investment and spending rate policies of the Board, along with a strong fund-raising effort, the University has realized marked growth in the endowment during the past twelve years (see chart).
The market value of Pacific's endowment was just over $220 million on July 1, 2007, up more than $24 million from the $195.7 million on June 30, 2006.
According to the latest survey of over 720 colleges and universities by the National Association of College and University Business Officers, Pacific's endowment size ranked 234th, and its nominal rate of return over the past five years was 17th highest among those surveyed.
