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University of Southern California Endowment Fund

Name: USC Endowment

Assets Under Management:  $5 Billion (Source: University of Southern California)

Annual Report: University of Southern California Endowment Fund’s Financial Report_2013

Portfolio Insights: The University of Southern California is a not-for-profit, major private research university. The consolidated financial statements have been prepared on the accrual basis of accounting, in accordance with accounting principles generally accepted in the United States of America and with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 958, Not-for-Profits Entities, which requires the university to classify its net assets into three categories according to donor-imposed restrictions or provisions of law: unrestricted, temporarily restricted, or permanently restricted. All material transactions between the university and its subsidiaries have been eliminated.

The university is generally exempt from federal income taxes under the provisions of Internal Revenue Code Section 501 (c) (3). The university is generally exempt from payment of California state income, gift, estate and inheritance taxes.” (Source)

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Top University of Southern California Endowment Fund (USC Endowment) Headlines:

1) Lisa Mazzocco was named USC’s first chief investment officer effective April 18, 2011. Reporting directly to the president and working closely with the university’s chief financial officer and the investment committee of the USC Board of Trustees, Mazzocco is charged with building a staff that will bolster the investment function of USC’s endowment in support of the university’s academic aspirations. She also advises the investment and finance committees of the USC Board of Trustees with respect to endowment performance, and chairs the university’s retirement oversight committee.

Before joining USC, Mazzocco was chief investment officer for the Los Angeles County Employees Retirement Association (LACERA), where she had worked since 1992. At LACERA, she was responsible for asset allocation of a $31 billion pension fund, working with the association’s Board of Investments to develop implementation plans for its investment strategies. (Source)

2)  University of Southern California, Los Angeles, was awarded a $141 million federal contract by the U.S. Army Contracting Command, Research Triangle Park Division, Research Triangle Park, North Carolina, for research and development and other activities within the approved modeling and simulation core competencies in the areas of training, education, operations, health and other arenas where the research, technologies and methodologies may be applied. (Source)

3) In accepting your gift to its endowment, the university has assumed responsibility for ensuring that it will perpetually support its specified purpose. Gifts to endowment are invested in the University of Southern California’s endowment Fund, a balanced
portfolio invested in diversified asset classes, including global stocks and bonds, real estate, natural resources, private equity, and absolute return strategies. Recognizing that market volatility and economic change create both risks and opportunities, the
university employs a long-term and active investing philosophy that responds to changing environments and takes advantage of valuation extremes. This approach is designed to enable the endowment to grow in real terms, providing meaningful annual
returns that keep pace with inflation, while minimizing risk and volatility. (Source)

4) When you make a gift to the University of Southern California, you have tremendous flexibility in determining how the funds will be used, as well as many options for making your gift.

Unrestricted gifts are among the most valuable to USC, because they allow the university to allocate funds wherever the need is greatest, and to take advantage of unique opportunities as they arise. Your unrestricted contribution may be used to support costs associated with financial aid, innovations in teaching, research equipment, facilities, and much more.

Directed gifts allow you to designate your gift to a specific school or program, a support group, or a priority area at the university. When you make a directed gift to USC, you enjoy the satisfaction of knowing you are supporting a program that is personally meaningful to you. (Source)

5) Some fund-raising experts are questioning whether the University of Southern California can really reach its audacious goal of raising $6-billion by 2018.  No private organization has ever tried to collect that much from a single drive.

The observers, who all wish to remain anonymous, said they want to see the campaign succeed, because in the sputtering economy, “the last thing we need is for a big capital campaign not to be successful,” according to one seasoned fund raiser.

If the high-profile campaign does not achieve its goals, he said, it could undermine donors’ confidence in the viability of large nonprofit institutions and their ability to generate support.

The university—which had raised $1-billion when it publicly announced the campaign last month—went public with less than 20 percent of the  $6-billion goal in hand. Typically, fund-raising consultants advise raising at least 40 percent of the goal in the “quiet phase” of a campaign before it is publicly announced. (Source)

 

About Richard C. Wilson