As to why the endowment was down 0.43% before expenses and transfers, we currently manage the endowment to a target asset allocation of 35% fixed income, 35% domestic equity, 25% international equity, and 5% real assets. That allocation led directly to this year’s investment performance:
Asset Class Benchmark Index
Target Return Allocation 6/30/11– 6/30/12
Fixed Income
Barclay’s Aggregte Bond Index
35%
7.47%
Domestic Equity
DJ Wilshire 5000 Index
35%
3.78%
Foreign Equity
MSCI ACWI ex-US Index
25%
-14.57%
______________________________________________________________________________________
Real Assets DJ UBS Commodity Index 5% -14.32% ______________________________________________________________________________________ Total
100% -0.43%
While our allocations vary slightly over the year, and while we are not exactly invested in these indices, the overall return closely matches the endowment investment return.
Endowment In-Action Endowment income produces a stable, permanent, reliable flow of money that allows an institution to better plan for current students and for generations to come. A healthy endowment adequately supports financial aid, facility maintenance and improvements, educational programs, and teachers. In a nutshell, a healthy endowment is an insurance policy against tumultuous financial markets and swings in enrollment, and provides greater budget flexibility. In 2012 we transferred $175,000 from the endowment to the school, representing less than 1% of our annual operating budget. Our students benefit from a strong endowment as the school is better able to fund financial aid needs, enhance our academic and athletic programming and keep up with advances in technology and science. Our teachers benefit as the school is better able to provide more resources and professional development opportunities.
Goals for the Endowment Over the past several years, thanks to the generosity of our community, we have seen significant growth in our endowment. However, our endowment is well below the median of comparable Bay Area schools and we plan to make a concerted effort to further build our endowment over the next five years. An endowment of $15 million would bring us up to the median and would contribute approximately $600,000 to the school’s budget annually. With that kind of funding, French American and International would be better able to reinvest in the school’s most important assets: students and teachers. With your support we can enhance the school’s financial position and provide an unparalleled education year after year.
Ronald Kahn Endowment Board President
Endowment Board Members Frances Hochschild, Vice President and Secretary Keith Geeslin, Treasurer Martin Cohn James Kirk Joshua Margulies
To learn more or make a gift to French American International School’s endowment, please contact the Advancement Department at 415-558-2017 or advancement@frenchamericansf.org.
Communiqué 2011-2012 French American and International | 7