2017-18 Oklahoma City University Endowment Report

Fiscal Year

2017– 2018

Endowment Report

Thank you Your Investment In OCU Changes Lives Thank you for your generous gifts supporting Oklahoma City University’s endowment.

Whether pursuing an education in business, art, law, nursing, science, religion or the performing arts, OCU students gain the knowledge and experience needed to succeed in an ever-changing global landscape. Through classroom instruction, experiential learning, internship opportunities, and extracurricular activities, your gifts enable OCU students to create, lead, and serve.

Endowment investments from alumni and friends of Oklahoma City University impact the lives of students now and pave the way for a sustainable future. Your investment allows the university to provide our students with the resources they need to reach their full potential while enabling us to build an enduring and thriving financial legacy.

The impact of endowment gifts can’t be overstated. They are vital to the strength of the institution and play a fundamental role in the continued growth and sustainability of Oklahoma City University. Your support helps ensure that generations of OCU students will enjoy an exceptional private university education that provides local impact with global reach and reputation. An endowment creates a lasting legacy, and the income it generates enables us to invest in generations of students and faculty, programs, and facilities that will strengthen the university and ensure our continued ability to thrive in the years ahead.

Richard Parry CHAIR ||

INVESTMENT COMMITTEE

Phil Busey CHAIR ||

RESOURCE

DEVELOPMENT COMMITTEE

During the last academic year, OCU endowment fundraising created several new endowed scholarships and raised more than $1 million in donations for existing endowments from 275 donors. As highlighted in the report, the Schneeberger Endowed Scholarship fund, established by former mathematics professor and department Chair Charles E. Schneeberger, aims to fund scholarships for students studying Mathematics, Physics, or Chemistry.

Thank you for investing in Oklahoma City University and our mission. We are committed to honoring your generosity through effective investment strategies and stewardship of endowed funds. We are so grateful for your support of our beloved institution and seek to exemplify the highest standards of excellence. Your gift enables us to impact lives and shape the future of our nation and beyond. On behalf of the Investment Committee, Resource Development Committee, and the entire Board of Trustees, we thank you for your extraordinary support.

OCU made Playbill’s “Big 10: The 10 Most Represented Colleges on Broadway in the 2018-2019 Season.”

Endowment Our endowment has maintained strong financial growth as demonstrated by the

five-year average return of 7.08 percent on endowment investments. The market value of endowment funds, including endowments held by other entities for the benefit of OCU, was $114,094,273 as of June 30, 2018. This report highlights those funds directly managed by OCU trustees through the Oklahoma United Methodist Foundation.

Total Endowment $114.1 million

Our generous and faithful donors continue to provide a significant margin of excellence for students and the faculty, staff, and programs that support them. Their philanthropy makes a profound, positive impact and continues to help make Oklahoma City University the best educational institution possible.

Many of our donors choose to direct their gifts toward endowment. OCU’s endowment, including endowment held by other entities for the benefit of OCU, is made up of 626 individual funds designated to provide perpetual financial support for scholarships, faculty professorships and chairs, the various schools, library resources, and other endowed programs. Of these funds, 541 are held by OCU, 67 by the Oklahoma United Methodist Foundation, and 18 by the Oklahoma City Community Foundation.

Endowment Assets by School/Department OCU Endowment || $71.9 million

OCU Endowment Managed by the Oklahoma United Methodist Foundation || 63.05% Other Private Foundations || 5.40% Oklahoma United Methodist Foundation Endowment for the benefit of OCU || 31.55%

Endowment Assets by Purpose OCU Endowment || $71.9 million

Dance & Entertainment || 1.83% Financial Aid || 12.36% Law || 15.34% Library || 0.53% Music || 14.03% Nursing || 1.71% Clockwise from top of graph:

Religion || 11.16%

Alumni || 0.11%

St. Paul School of Theology || 0.13%

Academic Professorships & Chairs || 16.44%

Arts & Sciences || 11.23%

Theatre || 0.77%

Scholarships || 54.06%

Athletics || 1.72%

University-Church Relations || 0.66%

Other || 29.50%

Business || 20.55%

Other || 7.87%

100% of School of Religion graduates who have applied to graduate school or seminary have been accepted.

Math professor Gives Back The Petree College of Arts and Sciences celebrates Charles M. Schneeberger, along with his wife and daughter, for establishing the Schneeberger Endowed Scholarship Fund. The fund’s annual investment income will be awarded to OCU students majoring in mathematics, physics, and/or chemistry. Through significant contributions each year and generous future estate gifts, the Schneeberger family intends to increase the fund’s balance to $1 million.

Dr. Schneeberger graduated with honors from OCU in 1964 with a degree in mathematics, topping off his distinctive academic achievements with OCU’s prestigious L.C. Mersfelder Award, presented annually at commencement from 1932 to 1968. Dr. Schneeberger returned to OCU as an associate professor and chair of the Department of Mathematics from 1972 to 1978.

As OCU builds its endowment to support academic programs, recruit and retain outstanding students, and enrich student experiences across the university, the continuing generosity and thoughtful gift planning of alumni and friends like Charles Schneeberger will advance OCU and ensure academic success for generations of future students.

Investment Performance For the 2017–18 fiscal year, the portfolio benefited from an improving U.S. economy and significant income tax reform legislation. OCU has outperformed its broad market index and Lipper Median peer benchmarks for the one-, three-, and five-year periods.

8% 6.3 2% 6.8 6%

7.0

10 8

Notes

6 4 Percentage

1 Lipper Median returns from the Lipper mutual fund universe for balanced funds in the asset class category.

As of 6/30/18, the universe consisted of 5,086 peers.

Source: Wilshire Associates, Lipper, and Wespath.

2 Historical returns are time-weighted. Returns greater than one year are annualized.

3 Past performance is no guarantee of future returns.

2% 5.8 1%

8.9

The information in this document was obtained from sources believed to be reliable; however, accuracy is not guaranteed.

Historical returns are not indicative of future performance.

1%

Lipper Median

5.2

The historical returns presented herein represent the actual historical returns of the OCU Endowment, which reflect the deduction of fees charged by third parties.

35% S&P 500 Index / 20% MSCI EAFE Index / 45% BC US Aggregate Intermediate Index

6.5

OCU Endowment

7% 6.1 4% 6.1 9%

Net of Fees || As of June 30, 2018

2 0 1 Year

OCU was named a 2018 Best College Value by Kiplinger’s Personal Finance.

3 Years

5 Years

Management & Strategies Oklahoma City University is committed to prudent, time-tested investment strategies and fiscal policies.

The Board of Trustees Investment Committee is charged with overseeing its funds and measuring the returns they produce against nationally recognized standards and metrics for investment performance.

The Board of Trustees Investment Committee actively monitors the financial markets to control risk and evaluate exposure for all asset classes. The Oklahoma United Methodist Foundation serves as the advisor and record keeper, and Wespath Investment Management serves as investment manager to the Board of Trustees Investment Committee.

current spending needs. The endowment is invested with a long-term horizon to ensure that it will grow at a rate above inflation, while providing a stable stream of income to support the purposes for which its funds were created.

Endowment growth is due not only to the generosity of thousands of alumni, friends, corporations, and foundations through the years, but also to the careful stewardship provided by the Board of Trustees.

Asset Class Overview

In managing the endowment, the University seeks to balance the dual objectives of enhancing the future purchasing power of endowment funds and meeting

OCU’s directly managed endowment portfolio of $71,934,272 was composed of these asset classes as of June 30, 2018. The guiding principle of OCU’s consolidated endowment program is that funds should be managed so that a gift today will fund a donor’s objective in perpetuity.

Broad Asset Allocations

Detail Asset Allocations

OCU Endowment || $71.9 million

OCU Endowment • $71.9 million

Cash || 3.2% U.S. Equity Fund || 32.4% Equities || 58.3%

International Equity Fund || 25.9%

Fixed Income || 37.8%

Fixed Income Fund || 22.3%

Alternatives || 3.9%

Inflation Protection Fund || 9.0% Alternatives || 2.9% Mineral Interests || 1.0% Notes Receivable || 3.3%

Assets & Distributions Assets Under Management

70 65 60 55 50 45 40

2014

2015

2016

2017

2018

3.0 2.8 2.6 2.4 2.2 2.0 1.8

Millions of Dollars

Millions of Dollars

Distributions from Assets Under Management

92% of Meinders School of Business graduates are employed or go onto graduate school.

2017-18 New Endowments Jerome K. Altshuler Endowed Scholarship Established in Spring 2018, this endowed scholarship honors the late Jerome K. Altshuler. Jerome’s family wanted to ensure that the university and students who had benefited from Jerome’s past gifts would feel his support for years to come. The endowed scholarship will provide recognition and financial stability to a deserving student or students enrolled in the Oklahoma City University Meinders School of Business to address their necessary educational expenses. The scholarship will be awarded to a student or students who meet the following criteria: majoring in business, hold a 3.0 minimum GPA. Financial need can be considered.

Michael Toney Memorial Endowed Scholarship In an effort to honor the late Michael Toney, Michael’s friends and family wanted to establish this endowed scholarship in his memory. Once fully funded, the endowment will provide scholarship funding to a student or students who are softball players, with preference

given to those from the Tulsa area. They must be pursuing a degree in either business accounting or a health profession, with preference given to those interested in Physical Therapy or Nursing.

Kramer School of Nursing Meinders Simulation Center Quasi-Endowment With gifts totaling more than $1 million, the Kramer School of Nursing opened the Meinders Simulation Center where nursing students receive hands-on training and access to a state-of-the-art, high-fidelity simulation center, which provides the opportunity for them to practice their skills on high-acuity patients or with

College Factual ranked the Kramer School of Nursing in the top 15% of U.S. colleges and universities in 2018.

Scholarship Recipient Becomes Scholarship Supporter Drew Williamson, a former president of the Alumni Board, has first-hand knowledge of how important scholarships can be for hard-working students dedicated to bettering themselves. Now a successful wealth management advisor, he established the Meinders Scholars Endowed Scholarship Fund as a tribute to the benefactor who meant so much to him.

“I received a Meinders Scholarship, and it made a huge difference, as my father was disabled from a horrible bout with cancer in the late ’80s,” Drew said. “I probably would have had to transfer if not for the financial aid I received. After I graduated, I had the unique opportunity to get to know Herman Meinders pretty well. I admire him for a lot of reasons, and I wanted to not only give something back, but also start a fund to honor Herman, as there are a lot of former OCU students out there who benefited greatly from his generosity.”

patients who have infrequent or unpredictable situations (i.e., childbirth) with no risk of harm to a living person.

The investment earnings and portions of the corpus will be used for general expenses of the simulation center including, but not limited to, new equipment, equipment maintenance, and material purchases.

Arts & Sciences Graduate Student Endowment Scholarship The purpose of this scholarship shall be to provide recognition and financial assistance annually to deserving graduate students enrolled in the OCU Petree College of Arts & Sciences, in order to meet their necessary educational expenses (tuition or fees). The recipients must be pursuing a graduate degree and have an undergraduate cumulative GPA of 3.25 or higher.

Or if the student has some graduate courses on their transcript, that cumulative GPA must also reflect a 3.25+ and they must be able to answer: “Why are you pursuing a graduate degree at Oklahoma City University?”

Dr. Ali M. Alli Endowed MBA Scholarship The family of Dr. Ali M. Alli wanted to honor their late father through the establishment of this endowed

scholarship. The purpose of the scholarship shall be to provide recognition and financial assistance annually to a deserving student or students pursuing a Master of Business degree, with preference given to a student pursuing a career in Operations Research. Dr. Alli was a faculty member, a friend, and a longtime supporter of students at OCU.

The Bass School of Music is home to the world’s oldest campus-based opera and music theater company.

Endowment FAQs What is an endowment?

Can I give to an existing endowment?

Individual endowments represent the legacy of benevolent donors who invest for long-term growth. An endowment is timeless because the long-term aim is to conserve both the corpus and purchasing power. The investment income and gains earned from an endowment advance the strategic vision of the donor on a continual basis.

Yes. Unless you state otherwise in your memorandum of understanding when the gift is established, the fund can be left “open” to future gifts from you or others who choose to support the fund. While there is a minimum of $25,000 to establish a new endowment, there is no minimum gift required for increasing the size of an existing endowment.

Why are endowments important?

Endowments build a legacy of support that spans generations. As a permanent legacy, they will continue to give educational opportunities to the most talented students long into the future.

They also allow OCU to recruit and retain the best teachers to build programs and act as esteemed mentors to our students.

What are the minimum endowment levels to establish a named endowed fund?

The minimum gift required to establish a named endowment fund is $25,000. Endowment gifts can be pledged and paid over a period of up to five years.

Can I choose what my endowment supports?

Yes. A number of donors to Oklahoma City University choose to restrict how their funds can be used. You can designate your gift to support a particular school or program, special initiative, library, or other opportunity at the University or establish an endowment whose income may be utilized at the discretion of the Board to meet strategic needs.

How is an endowed fund invested?

Some examples of minimum guides for named endowed funds are:

OCU adheres to investment policies intended to provide a balance of risk and return in the portfolio.

The investment portfolio is diversified to keep volatility within acceptable limits for the portfolio as a whole. This provides the greatest assurance that future generations benefit from the endowment as much as current students.

Whose name is on the endowment?

When will an endowment begin generating payout that can be spent?

• Scholarship: $25,000 • Professorship: $1 million • Chair: $2 million

Donors are encouraged to name their endowed fund in a way that is meaningful to them. Many donors establish an endowment in honor of a specific person — a family member, professor or coach — and name the fund accordingly. Endowments can also be named more broadly for the discipline they support or the group or individuals who establish them.

Once the initial gift has been received, the minimum required funding levels have been achieved, and all required paperwork has been completed, initial payout of funds typically will become available after 12 months. Individual gifts in excess of 50% of the market value will become available after 12 months.

How is the amount of annual payout determined and then distributed?

The amount of payout allocated each year varies because it is based on the market value of the endowment portfolio for the last twenty (20) quarters. The Board of Trustees reviews and approves the spending rate annually. The average spending rate for the past five years has been approximately five percent of the endowment’s average market value.

How does the endowment increase in value?

While investment returns help to fuel the growth of OCU’s endowment, the addition of gifts is more important over the long term. Recurring contributions are important because this allows for averaging the cost basis over time.

Advancing OCU Cash, securities, or planned gifts are excellent ways to build an existing endowment or establish a new fund.

Office of Advancement || (405) 208-7000 || give@okcu.edu || okcu.edu/give Lynann Sterk-Brooks Vice President for Advancement || lmsterkbrooks@okcu.edu Judy Reyes-Henderson Assistant Vice President for Development || jareyeshenderson@okcu.edu