Annual Endowment Report

Annual Endowment Report

Sharon Henzler (’17) Major(s):

Mathematics & Economics

Hometown:

Seattle, WA

Endowment Gifts:

Providing Futures for Our Students Endowment gifts are lasting, far sighted funds that permanently support the ways in which Gonzaga will unfold the potential that exists in every student.

With these endowment gifts, Gonzaga Will: • Provide need merit-based scholarships •

service projects

Offer professorships and lectureships

• Honor academic and research excellence

with awards •

• Lead retreats/Christian life communities/ •

Fund innovation

• Maintain and update facilities, libraries

and equipment

Support internships •

Support other donor intentions

799

individually named endowments in the pooled endowment fund and other funds committed to endowment

2.8% of Gonzaga’s annual operating budget supported by annual endowment spending

$1,541 spent annually from endowments per undergraduate student

Financial Stewardship The oversight of the endowment is delegated to the Investment Committee of the Board of Trustees and supported by University Finance staff and an investment consulting firm specializing in institutionally-managed funds. Endowment gifts are pooled and invested on a portfolio basis. Gonzaga University’s goal for endowment assets is to provide a long-term annualized return equal to, or in excess of, annual spending plus inflation. The “spending power” of an endowment gift could diminish over time. Therefore, endowment gifts and any accumulated unspent earnings are invested in a manner intended to produce long-term growth while assuming a reasonable level of investment risk.

Growth of $1,000 Over 10 Years The following table illustrates the growth of $1,000 over 10 years (net of fees, prior to spending), as compared to Gonzaga’s policy index and target return.

$1,957 $1,669

$1,565

June 2007

June 2012 Gonzaga

Policy Index*

4.5% + Inflation

* Policy Index represents Gonzaga’s composite benchmark for the pooled endowment fund.

June 2017

Annualized Investment Performance The Gonzaga pooled endowment annualized investment returns (net of fees) for the one, three, five and ten-year periods (measured as of June 30, 2017) are included in the accompanying graph, along with comparisons to Gonzaga’s policy index and the NACUBO Commonfund Study of Endowments® (NCSE), the most comprehensive study of over 800 of the nation’s institutions of higher education with endowments. We are pleased to report that the pooled endowment net annualized investment returns rank in the top 10 percent among study participants on a one, three and five-year basis and the top 25 percent on a ten-year basis.

4.6%

4.7%

7.9%

5.2%

2.5%

4.2%

5.8%

5%

5.8%

7.5%

9.5%

10.0%

10%

12.2%

12.5%

13.5%

15%

15.8%

17.5%

0%

Gonzaga

Policy Index*

NCSE Average

* Policy Index represents Gonzaga’s composite benchmark for the pooled endowment fund.

Endowment Spending Each year the University spends approximately 4.5% of the fair market value of the pooled endowment measured on a trailing twelve quarter basis. Such annual spending is in fulfillment of the donor’s gift intent. Should an individual endowment suffer an investment loss that exceeds the historical gift amounts, the University funds the spending from unrestricted sources, thus ensuring that the donors intent is fulfilled each year regardless of investment market conditions.

Allocation of Spent Funds (2016-17)

24% Total Spending in 2016-17 was $8.2 million

17%

59%

Investment Policy Asset Allocation Target The investment of endowed funds is diversified among asset classes that may perform differently in various market conditions.

Fixed Income

International Equities

Domestic Equities

Alternative Investments

Real Assets

Aggregate Endowment Value – since 2005 (measured as of May 31) The accompanying graph illustrates the change in the aggregate endowment value (inclusive of gifts, pledges and planned giving) over the past 12 years, representing a 250 percent increase. $300 M $282.0

$250 M $218.8 $200.8

$200 M

$173.3

$150.5

$150 M

$212.9

$148.3 $122.9 $100 M

0

$112.1

2005

2010

2011

2012

2013

2014

2015

2016

2017

Learn more about the campaign, exciting progress and how to join in:

gonzagawill.com

Gonzaga University | University Advancement | 502 E. Boone Ave. | Spokane, WA 99258-0098 (800) 463.6925