Endowment Report 2021-2022

ENDOWMENT REPORT2021-2022

Dear Trinity University supporters and friends,

W

hen this endowment report was created six years ago, it was with the following goals: to provide transparency to supporters of the University regarding the stewardship of their gifted assets, to illustrate the critical importance of the endowment in accomplishing the University’s educational mission, and to highlight and celebrate important endeavors and milestones resulting from these endowed resources.

As we reflect on the last six years at Trinity, the journey together has been filled with many challenges and exciting milestones. Our Tiger community has had to persevere, overcome, and continue forward in building on the bedrock foundation of Trinity’s 153-year history—a foundation created by vision, gumption, and generosity that extends across multiple generations. This foundation has provided a path forward, and we believe Trinity’s best years continue to remain ahead as we work toward our aspirational goals. Here are a few recent milestones that illustrate key progress forward into 2023: • Vanessa B. Beasley, Ph.D., joined the University as Trinity’s 20th president and the first female president in school history.

• Trinity celebrated its formal arrival on the national stage: U.S. News & World Report listed the University as No. 55 in its 2022-23 rankings of best liberal arts colleges, placing Trinity in the top third of liberal arts colleges and universities in the country.

• Trinity’s incoming first-year class received more than 11,400 applicants for the 2022-23 academic year, a record for the University.

In an opening announcement to the Trinity community, President Beasley communicated, “There’s always a next level, and we will achieve it together.” As we collectively work toward Trinity’s ultimate goal of improving student success and outcomes, the endowment remains a crucial component. The endowment provides more than 40% of the University operating budget; in comparison, the average for other private universities is about half of that support. This unrivaled support from our endowment keeps tuition costs low for students and helps fund services, facilities, initiatives, and more across the entire University, together creating a high-caliber student experience. We are deeply grateful for the continued support of the Trinity community, including donors, Trustees, alumni, faculty, staff, parents, and students. Thank you for your support of Trinity’s past, present, and future.

Sincerely,

Craig Crow Chief Investment Officer

Michael Bacon ’89 Vice President for Alumni Relations and Development

T R IN I T Y U N I V E R SI T Y E N DOWM E N T

At A Glance 2021-2022

$1.713 billion Value of endowment

41.4%

Portion of Trinity’s operating budget that the endowment supported

$63.9 million¹ Distribution to Trinity’s operating budget

$10.1 million

New gifts made to the endowment

4.5% 2

Endowment spending policy rate

621

Number of individual endowed funds Figures above as of May 31, 2022

-0.8%

1-year annual return*

+9.4%

10-year annualized return*

*Long-Term Investment Pool and directly held asset performance, net of fees, as of June 30, 2022 1. Total distribution does not include non-recurring "rainy day" reserve distributions of $32 million.

2. Approximately 47% of endowments in the Cambridge Associates FY21 College and University Investment Pool Returns survey reported a target spending rate ranging between 4-4.99%. n= 175.

Trinity University’s Endowment Portfolio Overview The endowment value decreased by a net $12 million in FY2022 in the face of volatile markets. Investment returns contributed $84.5 million across the Long-Term Investment Pool (LTIP) and Funds Held-In-Trust (FHIT) portfolios, with $9.2 million provided through gifts and other additions and $106 million distributed to the University for the operating budget and non-operating activities.

Beginning Value

$ 1,725

Gains and Income

$ 84.5

Net Endowment Gifts3

$

Other Transfers4

$ (33.5)

University Distributions

$ (72.6)

Ending Value

$ 1,713

3. $9.2 is calculated from $10.1 in outright gifts and less $0.9 decrease in receivables

9.2

4. Other transfers include a "rainy day" reserve replenishment of $32 million.

Portfolio Value Growth Over Time

2012-2022 $1,725

$1,713

2021

2022

$1,700 $1,600 $1,500 $1,400 $1,200

$1,108

$1,000 $800

$1,328

$1,239

$867

$1,150

$1,287 $1,279

$1,068

$959

$600 $400 $200

$ in millions

2012

2013

2014

2015

2016

2017

2018

2019

2020

Long-Term Investment Pool (LTIP) –Managed by Trinity’s investment committee and internal staff Funds Held-In-Trust (FHIT) – Managed by third parties on behalf of Trinity Total Portfolio Value

Compound Annual Returns The long-term financial objective of the Long-Term Investment Pool is to provide a stable and consistent level of ongoing support for the University’s operations while maintaining and enhancing the real purchasing power of the endowment fund in perpetuity. This chart illustrates annualized returns over trailing periods within the past 10 years.

11.1%

10%

9.6%

9.4%

5 Years

10 Years

5%

0%

-5%

-0.8%

1 Year

3 Years

Trinity Investment Returns (net of fees) Performance data as of June 30, 2022, and includes LTIP and directly held asset performance

Source: Trinity University audited financial statements, as of 05/31/2022

(in millions, data as of May 31, 2022)

Distributions

40.0%

The endowment is key to supporting Trinity’s educational mission

41.4%

35.0%

Financial support from the endowment, in the form of annual cash distributions, plays a significant role in the operating budget for the University. The endowment is the second largest financial resource for the University operating budget—behind student tuition and fees—and is key in supporting Trinity’s educational mission. The amount of support the endowment provides to the operating budget is almost double the average of private colleges and universities5, which in turn is considerably higher than that of public universities.

In FY2022, Trinity’s endowment distributed $106 million to the University.

Of that amount, a net $63.9 million went to the operating budget, representing 41.4% of total operating revenues. This support has increased over time—as an example, in 2013, Trinity’s endowment supported 28% of the operating budget and has since steadily expanded. This growing support over time has bridged the gap between the cost to deliver a Trinity education and the amount students pay to attend the University, allowing Trinity to offer all the benefits of a leading liberal arts education.

30.0% 25.0%

21.8%

20.0% 15.0% 10.0% 5.0%

3.7%

0.0% Endowment Support of Operating Budget

Trinity University

Private College & University Average

Public College & University Average

5. Cambridge Associates’ 2021 Spending Policy Report—Figure 10. 75 private colleges and universities included in data set.

Over the last five years, the endowment distributed approximately $276 million to Trinity’s operating budget.

LTIP Asset Allocation Trinity's Long-Term Investment Pool (LTIP) consists of assets managed by the Office of Investments (a team of six investment and operations professionals) and governed by Trinity's Investments Committee (a committee of the Board of Trustees).

To support the in-perpetuity status of the endowment, the University’s LTIP asset allocation strategy captures endowment growth through investments in a variety of asset classes across global financial markets. Additionally, Trinity’s LTIP has a diversified asset base and is actively managed by more than 75 external investment managers. Asset allocation, diversification, and manager selection are all critical to driving long-term endowment returns and managing volatility through different economic cycles. Trinity seeks to partner with the best investment managers in each asset class and continues to focus on the long-term build-out of the private investment portfolio, as seen by its steady increase within the asset allocation over time.

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2002

2004

2006

Fixed Income and Cash

2008

2010

Private Investments

2012

2014

Hedge Funds

2016

Non-U.S. Equity

2018

2020

U.S. Equity

2022

Campus Impact The Long-Term Investment Pool consists of 621 individual endowed funds. Approximately 58% of endowed funds constitute temporary and permanently restricted endowments, which are gifts restricted by donors to provide long-term funding for designated purposes. The remaining funds represent unrestricted endowments, which can include quasi-endowments (money that the Board of Trustees designates for key University purposes and treats as endowments). Both of these classifications are governed by the University spending policy and actively contribute to Trinity’s operating budget. The 621 endowment funds are broadly categorized and support many areas across campus.

SCHOLARSHIP 309 funds || $271 million The largest number of endowment funds supports undergraduate and graduate scholarships.

GENERAL 188 funds || $734 million

LOANS 8 funds || $53 million

The endowment supports University expenses, such as recruiting and retaining exceptional faculty and funding undergraduate research.

The endowment supports a loan fund program for student financial aid and academic support.

LIBRARY 20 funds || $12 million These endowment funds provide support for the Coates Library's collection and resources.

72.4

$

$60M

65.3

$

30.5%

22.7%

$40M $30M

38.6

$

46.3 19.1%

25%

$

17.2%

Suzanne and John H. Moore III ’60, Ph.D. Many alumni were shaped by the tutelage and mentorship of John Moore, Ph.D., during his time as a Trinity professor and education department chair, and his family’s scholarship continues to help educational leaders today. Started by John’s grandparents in 1915 and increased by three generations of Moores, the Moore Family Education Scholarship has supported Trinity students that now number in the hundreds, all pursuing their dream to become educators, school counselors, or school leaders. Considered the longest continuing endowment at Trinity, the family’s scholarship as well as their extraordinary legacy will touch even more lives in the future.

20%

16.0%

15.8%

25.2

$

$20M

15% 10%

$

$10M 7.7

$

$

8.8

8.9

$

10.0

$

10.4

11.5

$

5%

$0

0

2009

2014

2016

Total Scholarship and Student Aid ($)

2018

2020

Endowment Scholarships ($)

Endowment Scholarships (%)

Donor Spotlight

30%

58.1

$

$50M

35%

2022

Endowment Support (%)

For FY2022, 309 endowed scholarship funds provided more than $11 million of annual distributions to much-needed scholarships and student aid. However, the endowment scholarship distribution only covered 15.8% of the $72.4 million of institutional financial aid awarded last fiscal year, an all-time low. This downward trend has continued over time as Trinity students’ financial needs and the cost of providing a world-class education outpace endowed scholarship funds. Trinity remains strongly committed to raising endowed scholarships, an area of critical importance to the University.

Scholarship and Student Aid Support

Supporting Student Scholarships

$70M

LTIP Funds Unrestricted: $541 million No donor restrictions but may contain designation by Trustees for an endowment Restricted: $763 million Includes temporary and permanently restricted donor funds Total: $1.304 billion

BUILDINGS AND GROUNDS 32 funds || $91 million Funds from endowments support buildings on campus as well as the care of Miller Fountain.

FACULTY SUPPORT 64 funds || $142 million Endowment funds support endowed professorships, lectureships, faculty development, and more.

In a dream world, I would like to do research on how music can affect and treat degenerative brain diseases such as Alzheimer’s."

Student Spotlight Caelia Marshall ’23 Neuroscience major and music minor Music Scholarship and Irene and Earl Wischer Endowed Scholarship Caelia Marshall ’23 is a singer. But, like many students pursuing their passion for music at Trinity, she isn’t actually a music major.

Caelia earned a music scholarship at Trinity that wouldn’t even require her to commit to being a music major, which meant that coming in as a firstyear student, she had more space in her courseload to explore different STEM fields. Caelia took a few basic courses—found that she didn’t like chemistry, for starters—then discovered neuroscience going into her sophomore year. She never looked back. The neuroscience major from Atascocita, Texas, now has her sights set on a career in research that combines science and music.

“In a dream world, I would like to do research on how music can affect and treat degenerative brain diseases such as Alzheimer’s,” Caelia says. “My uncle suffered from dementia, and by the end stage of this disease, he couldn’t say anything. But whenever we would sing to him, he could sing along.”

New Endowment Gifts Reach Recent High Trinity had a fantastic year for new endowed giving, nearly doubling the amount given compared to last year.

Of the many new gifts, one is especially meaningful for Trinity students and faculty. The Trinity community, led by the Board of Trustees, created an endowed faculty prize to recognize the legacy of Danny J. Anderson, Ph.D., the University's president from 2016-22. Research and discovery are at the core of the Trinity student experience, where students work closely alongside faculty to pursue cutting-edge research, an opportunity rarely found at the undergraduate level.

President Anderson strongly supported undergraduate research at Trinity, and the annual Anderson Prize will honor faculty who show outstanding mentorship and guidance to student researchers.

New Endowment Gifts $10M

$10.01

$8M $6M $4M

$5.96

$6.02

$6.69 $5.76

$2M $1M FY18

FY19

FY20

FY21

FY22

Preparing Students for Success In addition to offering financial support to the University, Trinity's Office of Investments provides students with hands-on internship and employment opportunities that prepare students for successful careers in finance post-graduation.

During the summer, the Office of Investments works alongside an allstar Trinity junior or senior intern to expand their investment horizons and asset management acumen. The coveted summer internship program has led students to strong full-time positions after graduation with various national consulting, audit, and real estate firms.

In addition to providing the summer internship program, the Office of Investments offers paid employment opportunities during the academic year and has partnered with the University's Center for Experiential Learning and Career Success as well as Academic Affairs to offer for-academic-credit internships to Trinity students.

All of these programs provide pertinent, degree-related skills to students while supporting Trinity's experiential learning initiatives.

“Every day I was challenged to learn new things and critically analyze information, ultimately helping me better perform in the classroom, in job interviews, and in extracurricular activities.”

– Adam Gryniewicz ’20 Associate Investment Director, Cambridge Associates Summer 2019 Office of Investments Intern “From learning the financial lingo and analyzing performance to ultimately underwriting and speaking with investment managers, this experience has enhanced my professional skills and has prepared me for my dream career in investment management.”

– Nicolás Díaz ’21 Financial Analyst, Greystar Summer 2020 Office of Investments Intern “There was a high degree of value placed on my work that extended well beyond the traditional ‘intern’ role. This was extremely satisfying, and it meant having to constantly enhance my professional and financial skill set to keep up with the team.”

– Omar Hinedi ’22 Capital Markets Rotational Analyst, USAA Real Estate Fall 2021-Spring 2022 Office of Investments Intern

If you have any questions about this report, please contact the Office of the Vice President for Finance and Administration at 210-999-7306 or the Office of the Vice President for Alumni Relations and Development at 210-999-7328.

For more information, visit gotu.us/investments.