Furman University Fiscal Year 2021 Endowment Financial Report

FISCAL YEAR 2021

ENDOWMENT FINANCIAL REPORT

A Message from the Vice President “Furman meant an open door to a dream … ” These words, shared recently by a Furman alumna, touched my heart.

Gathered as part of a collection of alumni stories, this simple statement says everything. The idea of open doors and ambitious dreams speaks to the fundamental purpose of philanthropy. In challenging times like we have all experienced this past year, now almost two, the optimistic act of philanthropy is what touches our soul and feeds our spirit.

Your philanthropy, along with the work of the university’s investment office and a robust market, has helped to fuel significant growth in Furman’s endowment. The numbers reflected in this report are a celebration of that success. They are impressive. More impressive, though, is the remarkable story of impact that these numbers tell.

Every number on these pages represents the dream of a Furman student to heal, to teach, to perform, to research, to produce, to analyze, to compete, to belong, to lead, and to change their community and the world. Every gift you made this past year to Furman and every endowment dollar that grew as a result throws doors open for Furman students, propels them through those doors, and ultimately inspires them to realize their dreams for the benefit of us all.

Furman’s mission is to challenge and support lifelong learners through rigorous inquiry, transformative experiences, and deep reflection to lead lives of meaning and consequence. Lives of meaning and consequence.

Meeting our mission is more important than ever, and YOU and your philanthropic investment in Furman inspire our work. Thank you for opening doors and dreaming with us.

With profound gratitude,

Heidi Hansen McCrory Vice President for Development

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“Thank you for providing a very generous scholarship to me at Furman!

I really appreciate your recognition of the arts and rewarding students for their hard work!” - Michael Leiby ’25

“Thank you so much for your generous donation. I quite simply wouldn't be here without your help. I am very grateful for this opportunity and won't let it go to waste. I am excited to transfer all of my passions to my new environment and give back to Furman just as much as it's given to me. I appreciate everything Furman offers and my experience here so far couldn't be more positive. Thank you again for everything.” - Kendra Lund ’25

“It is not easy to pay for college, especially a private liberal arts school.

Because of your support, I am able to further my education in what I love at a wonderful university. Thank you so much for your generous support.”

- Aaron Forster ’25

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ENDOWMENT OVERVIEW Endowment Valuation

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he Furman University endowment provides a significant source of revenue which supports the operations and programs of the university. As of June 30, 2021, Furman’s total endowment was valued at $839 million, of which $642 million was invested in the endowment pool (the portion under the decision-making authority of the university). The remainder of the endowment is separately invested or managed by other entities, e.g. The Hollingsworth Funds.

ENDOWMENT

During the 2020-21 fiscal year, approximately $31.7 million was distributed from the total endowment. These monies, along with other distributions from university working capital, contribute approximately 23.5 % to the University’s annual budget.

POOL

HELD BY OTHERS AND SEPARATELY INVESTED

Value at 7/1/2010 Net Investment Return Distributions Gifts

$498,281,706 555,357,865 (324,247,942) 109,579,586

VALUE AT 6/30/2021

MILLIONS

$839 $800

$600

$572

$550

$593

$650

$631

$610

FY15

FY16

$661

$703

$695

$670

$400

$838,971,215 $200

FY11

$7.2M

NEW ENDOWMENT GIFTS during FY21

$31.7M TOTAL DISTRIBUTION during FY21

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FY12

FY13

FY14

FY17

FY18

FY19

FY20

FY21

ENDOWMENT DISTRIBUTION

47% Scholarships 21% Departmental, library, programs, other 12% Facilities operation, maintenance, improvement 11% Unrestricted budget support 9% Professorships

Management and Asset Allocation

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he Furman University Investment Office is charged with managing asset allocation, implementing specific investment strategies, and selecting and subsequently monitoring external money managers. The office collaborates with the Furman University Board of Trustees’ Investment Committee, senior Finance staff and external consultants to: a) preserve and enhance the inflation-adjusted purchasing power of the endowment, and b) support the current and future operations of Furman.

The university has adopted an investment strategy that emphasizes strong, risk-adjusted returns over full market cycles, so that the distributions are made regardless of the market environment.

To achieve this goal, investments are diversified across a broad variety of asset classes, a strategy that, historically, has been shown to mitigate risk while enhancing portfolio performance.

The Investment Office and external partners are focused on the responsible stewardship and investment of philanthropic gifts. The endowment’s purchasing power is supported by rigorous selection, monitoring and review of investments, which aims to ensure that each gift invested in the endowment may continue to transform the University for years to come.

ASSET ALLOCATION

23.2% International equities 22.4% Private equity/venture 17.6% U.S. equities 17.5% Hedged strategies 8.8% Real assets/natural resources 7.5% Fixed income 3% Cash

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Sources of Income

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otal distributions from the endowment and other university investments comprise approximately 23.5% of the university’s annual budget. The overwhelming majority, approximately 62% is generated from tuition, room, board, student fees and other auxiliaries.

Not only do endowed funds enhance the Furman experience for current and future students, but they also enable the university to reduce the pace of potential tuition increases.

SOURCES OF INCOME

61.8% Net tuition, fees, room and board, other auxiliaries 23.5% Distribution from endowment/other investments 9.4% Private gifts, grants and CARES Act 5.3% Other

Performance

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ike all perpetual funds designed to support current and future generations, endowments should be viewed through the lens of longer term performance. In the figure below, Furman’s endowment pool return, as of June 30, 2021, is compared to the Furman University policy index or benchmark.

Furman’s annualized returns for the three-year, five-year and 10-year periods are 11.2%, 11.2% and 8.3% respectively.

Given the backdrop of an extended global pandemic, elevated geopolitical tensions, and strong cultural and political crosscurrents on the domestic front, the capital markets were nothing short of remarkable over the fiscal year. A mixture of fiscal and monetary policies provided the fuel for a risk-on rally, while lower risk assets (high quality global treasuries) struggled to generate a positive return. For the first time in several years, institutions with diversified strategies and larger “alternative asset” exposure, i.e. “The Endowment Model”, significantly outperformed more traditional “70/30” models. Major global equity indices were generally in the +30% to +40% return range.

However, many private capital strategies (venture capital, buyout, natural resources) generated returns in excess of 50%, 60%, 70% plus. For this past year, the larger the university endowment or the more venture capital invested, the higher the return. Furman’s one-year return as of June 30, 2021 was 37.4%.

Subsequent to fiscal year end, the endowment has continued to perform well and has returned approximately 6.7% through the six months ending December 31, 2021.

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In addition to this comprehensive report from the office of investment, you will find statements charting the progress of your individualized fund(s) summarizing the 2021 fiscal year. The reports include beginning and ending market values, investment performance figures and the amount allocated to uses of the monies from your fund(s) labeled “spending distribution.”

10% 9% 8% 7% 12% 10% 8% 6% 4% 2% 0 3 years

5 years Furman pool

10 years Furman policy index

LEARN MORE

For a more detailed look at Furman’s endowment investment information, including policies and historical data, please visit: furman.edu/endowment.

Please contact the Furman University Office of Donor Relations with any questions or comments you may have at donorrelations@furman.edu or by calling Rebecca Bilott at 864.294.3704.

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3300 Poinsett Highway

Greenville, South Carolina 29613