Name: Swarthmore College Finance and Investment Office
Assets Under Management: $1.635 Billion (Source: Swarthmore College on 6/30/2013)
Annual Report: Swarthmore College Finnancial Report 2012-23
Portfolio Insights: “The past fiscal year was financially strong for Swarthmore College. Net assets increased by $163.4 million due largely to an 11.9 percent investment return on the endowment and record fundraising results. The year ended June 30, 2013, marked the transition of the budget from the years of adjustment following the economic downturn in 2008 to a more normal state of equilibrium. With the endowment continuing to sustain a positive trajectory since returning to its predownturn level in 2011, this past year—after several years at a reduced level—facilities capital spending was restored in the budget. The strategic plan implementation is now underway, and the early stages of the capital campaign are showing good success. This progress is tempered by recognition of a changed economic climate. As family incomes stagnate, there is growing attention to the value proposition of higher education, particularly for high-priced private institutions. Last spring, the Board of Managers convened a retreat of Board members from several key committees to discuss how this changed environment should factor into key financial and budget decisions to ensure continued financial sustainability. This was the first retreat of its kind in recent years. Board members representing the Finance, Audit and Risk Management, Investment, Development, Property, and Admissions and Financial Aid committees met to discuss each committee’s perspective, review financial scenarios, and integrate those discussions across committees.” (Source)
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Top Swarthmore College Endowment Fund Headlines:
1) At Swarthmore College, the endowment stood at $1.6 billion at the June 30, 2013 fiscal year-end. On a per-student basis, ours is one of the largest endowments in the country, and income generated by it allows us to spend on each of our 1,534 students well more than what tuition alone would cover. The endowment is not sitting idle. It is helping provide a broad curriculum with a low student/faculty ratio and over $30 million in need-based scholarships to the over one-half of our students qualifying for financial aid. The 2014-15 budget recently adopted by the Board of Managers calls for $67.6 million in endowment spending.
In explaining our endowment spending rate, I often use the analogy of a person’s retirement fund. If you were retired and knew you had one year to live, you could spend 100 percent of that fund. If you knew you had four years, you could spend 25 percent each year (ignoring interest and gains); if eight years, 12.5 percent, and so on. For a typical retiree with an average life expectancy, most financial planners would recommend a spending rate in the neighborhood of around 3 to 5 percent, depending on the investment profile and life expectancy. (Source)
2) Swarthmore College has a current endowment of $1.635 billion, some of which is invested in support of the fossil fuel industry, and yet historically the college has been a strong supporter of social justice in essentially all other aspects of its operation. The climate change — fossil fuel connection does not appear to be on its radar screen. Swarthmore’s president, Rebecca Chopp, maintains that “Sometimes this is difficult, sometimes people do not agree, and sometimes it does not work the first time. But we will always be proud that Swarthmore is a college that supports debate and disagreement. ” Rebecca, may I offer a thought for your kind consideration? Over the last 30 years, I have found in my studies that people who achieve success and long-term personal fulfillment all follow the same formula. I have also found that this formula works for institutions, as well. After all, institutions are but a collection of individuals, hopefully motivated and pulling together in the same direction to achieve a common set of agreed-upon goals. (Source)
3) The Fund for a Responsible Swarthmore is a project of Swarthmore Mountain Justice and a coalition of students, alumni, faculty, and staff concerned about the future of the college. We come together on this 150th anniversary of Swarthmore’s founding out of a love for the institution and a concern for its future.
Our goal is that the presence of this fund will encourage Swarthmore College to make the commitment to divesting its endowment from fossil fuels and reinvesting in real solutions to the climate crisis. This fund is designed to ensure that if the College agrees to the stipulations of the fund, the money raised will be used to support the College endowment. If the College does not agree to the stipulations outlined below, the money raised will be used to fund the continuing work of Swarthmore students who are organizing in support of climate justice. (Source)
4) “The endowment fund to establish the Scott Arboretum has been given to Swarthmore College to hold in trust and to use for the encouragement of horticulture in its broadest sense. The founders have wished to make possible a dream of Mr. Scott’s to help horticulture by visual demonstration. They have believed that the dream can be best realized by the planting in a public place of such trees, shrubs, and flowers as can be used by people of average means living in the Philadelphia suburban area. (Source)
5) Reporting to the Chief Investment Officer, the Director of Investments will be part of a small and collaborative investment team that manages the College’s endowment of approximately $1.8 billion. The endowment exhibits good long-term performance and is an essential part of the excellent financial health of Swarthmore. The College uses an extensive network of external investment management firms and is well diversified among assets classes, including domestic equity, international equity, marketable alternatives, private equity, real estate, natural resources, fixed income and cash.
The Director of Investments will be involved in all aspects of endowment management, including identifying, evaluating and recommending external investment managers and subsequent ongoing monitoring of them. The individual will work closely with the Chief Investment Officer to implement the overall investment program that includes an asset allocation strategy and investment policy guidelines. (Source)