FY21 Annual Report by University of Illinois Foundation

UNST NSTOPPA F Y 2 1 A N N UA L R E P O R T

TOGETHER WE ARE UNSTOPPABLE

UNSTOP TOGETHER WE ARE UNSTOPPABLE

PPABLE

CONTENTS

LETTER FROM THE BOARD CHAIR & PRESIDENT/CEO

FOUNDATION WEEKEND & THE 86TH ANNUAL BUSINESS MEETING

FY21 FINANCIAL REPORT

FY21 NEW BUSINESS

CAMPAIGN AND FUNDRAISING HIGHLIGHTS

FY21 ENDOWMENT REPORT

FOUNDATION LEADERSHIP

LETTER FROM THE BOARD CHAIR AND PRESIDENT/CEO

TOGETHER WE ARE UNSTOPPABLE

YOUR GENEROSITY KNOWS NO BOUNDS

LAST FALL, when we presented the FY2020 Annual Report, there was great uncertainty about what our world would look like a year later. Now that we’re here, at least for the University of Illinois Foundation, we’re happy to report that we continue to break through that cloud of uncertainty. For the second consecutive year and only the second time ever, your generosity topped $400 million in new business and $400 million in cash in the same year! You proved us correct when we selected Unstoppable as the theme for our 2021 Foundation Weekend and our annual report. You are undeniably unstoppable, and we are incredibly grateful! From scholarships to facilities, University of Illinois donors stepped up with passion and pride—even in this tumultuous time, when the coronavirus is still ravaging the world and when civil unrest and political divides often take center stage. Your gifts provide the resources Illinois needs to remain a global leader in tackling educational, environmental, economic, and human health challenges. Because of you, our three campaigns—With Illinois, IGNITE, and Reaching Stellar—are also unstoppable. Both UIUC and UIS eclipsed their lofty goals in the last 12 months, and UIC is currently more than 94 percent of the way to its goal. We are proud of everything you have done to help us reach the system-wide target of $3.1 billion ahead of schedule. But there is still plenty of work to do, and we will be relentless in our efforts to exceed our goals even further by the time the campaigns close next fall. Although the Foundation’s Annual Meeting was presented virtually for a second consecutive year, we were able to host donors on campus for Foundation Weekend activities (per all CDC and campus guidelines, of course). It was wonderful to visit face-to-face with many of you and acknowledge you personally for all you do for the University of Illinois System. We hope to spend time with more of our loyal alumni and friends in the year ahead. Thank you for providing the philanthropic support to fuel the university’s mission of transforming lives and serving society. If you haven’t seen the Annual Meeting video, you can view it on the Foundation website to learn more about the UIF’s FY21 highlights. Further details also can be found within these pages. Your willingness to always be engaged and invest in the Altogether Extraordinary University of Illinois System is proof positive that together we are unstoppable! Thank you again for your investments, and as we near the halfway point of FY22, let’s keep the momentum going. Please mark your calendars for next year’s Annual Meeting and Foundation Weekend, Sept. 28-Oct. 1, 2022. We hope to see you there!

KAY M. SCHWICHTENBERG Immediate Past Chair, Board of Directors

JAMES H. MOORE, JR. President/CEO

TOGETHER WE ARE UNSTOPPABLE

Guests gathered for an evening garden party and reception at the University of Illinois System President’s House. The event was hosted by the University of Illinois Foundation on Thursday, September 30, 2021.

FOUNDATION WEEKEND & THE 86TH ANNUAL MEETING

TOGETHER WE ARE UNSTOPPABLE THE ANNUAL FOUNDATION WEEKEND was held at the University of Illinois Urbana-Champaign September 30–October 2, 2021. The festive weekend provided an opportunity to celebrate both the storied traditions and the generous philanthropic efforts that build world-class facilities and support pioneering research, life-changing health innovations, learning opportunities, and transformative scholarships. The Foundation Weekend program included events that were hosted across the University of Illinois Urbana-Champaign campus. On these pages you can peruse photos from the Doris Kelley Christopher Illinois Extension Center groundbreaking, a UIF garden party, a spotlight on the Carle Illinois College of Medicine, health sciences and research lightning talks, a ribbon cutting ceremony for the Sidney Lu Mechanical Engineering Building, and a dedication ceremony for the new Campus Instructional Facility. Foundation Weekend guests were also treated to a talk by Illini astronaut, Colonel Mike Hopkins. It is worth noting that the UIF Annual Business Meeting, a perennial marquee event of the yearly Foundation Weekend, was not held in person this year. However, via special video delivery, the 86-year tradition of sharing fiscal year highlights was continued with Foundation leadership presenting financial and endowment information, campaign progress, and university fundraising highlights. UI System President Tim Killeen also shared special remarks about how the system and universities navigated yet another unprecedented year and rose to the challenge in altogether extraordinary ways. If you are interested in viewing the 86th Annual Business Meeting video or checking out photo galleries from the in-person events, visit uif.uillinois.edu/AM2021.

SAVE THE DATE: Foundation Weekend and the 87th Annual Business Meeting will be held September 28–October 1, 2022.

“I AM GRATEFUL TO THE UNIVERSITY AND TO THE ILLINOIS EXTENSION FOR SETTING ME ON THE PATH TO LOVE MY WORK FOR MY ENTIRE CAREER, AND I AM DELIGHTED TO SEE THE EXTENSION CENTER COME TO LIFE. IT WILL TRULY PROVIDE A WONDERFUL PLACE FOR U OF I EXTENSION TO CARRY ON ITS IMPORTANT WORK AND CONNECTION THROUGHOUT THE STATE AND BEYOND.” —DORIS KELLEY CHRISTOPHER '67, UIUC ACES ALUMNA

Doris Kelley Christopher, UIUC alumna and Pampered Chef founder, addressed guests at the Foundation Weekend groundbreaking for the new Doris Kelley Christopher Extension Center. The Center will unite six state Extension offices into a new welcoming space at the Arboretum in Urbana.

Guests were welcomed at a ribbon cutting and dedication of the new Campus Instructional Facility.

Health Sciences Lighting Talks gave guests the opportunity to hear about a variety of topics including mental health and the use of therapy dogs by the University of Illinois Police Department.

Stephen Boppart, Executive Associate Dean and Chief Diversity Officer for Carle Illinois College of Medicine, speaks to guests outside the Medical Sciences Building at UIUC.

A ribbon cutting for the Sidney Lu Mechanical Engineering Building was held on Friday.

U.S. Space Force Colonel Mike Hopkins '91, NASA Astronaut, spoke to guests at the Illini Union about his mission as Commander of the Crew 1 Dragon Resilience and how his education helped lay the foundation for his journey from student to astronaut.

TOGETHER WE ARE UNSTOPPABLE

CAN'T STOP CAN'T BE WON'T STOPPED 10

FINANCIAL REPORT

THE UNIVERSITY OF ILLINOIS SYSTEM and the University of Illinois Foundation released fundraising information for Fiscal Year 2021. The Foundation reports $400.2 million for cash* and $446.0 million for new business**—the second year running that both figures crossed the $400 million threshold. Alumni and friends contributed the largest percentage to both the cash and new business totals. In the cash flow allocation, the top purposes donors supported were research, students, facilities, and academic programs, recording $238.8 million in gifts to these areas. Donors also contributed $128.1 million in unrestricted funds that can be used by deans or unit heads at their discretion. Nearly 70 percent of the FY 2021 cash gifts are designated as current use. “I am in awe of the new standard of sustained philanthropic success that is being established by our donors. Their generosity has been inspirational to our cause and motivational to our advancement professionals, our university and system leadership, our faculty and staff, and our stakeholders across the system,” said Tim Killeen, president of the U of I System. The combined active endowment for the U of I System and the U of I Foundation stood at $3.82 billion as of June 30, 2021. The Foundation’s endowment portfolio delivered a preliminary return of 34 percent, which compares favorably to the policy portfolio benchmark which returned 28 percent. “This past year our donors once again stepped up with generosity and loyalty, proving that when we come together around our common goal to advance the mission of the University of Illinois, we are truly unstoppable,” said UI Foundation President and CEO James H. Moore, Jr. The Foundation’s FY21 financial report was announced in conjunction with Foundation Weekend festivities, including a video delivery of the

Foundation’s 86th Annual Business Meeting, a cornerstone event that shares the impact of private support for the U of I System.

CASH AND NEW BUSINESS EXCEED $400 MILLION FOR THE SECOND STRAIGHT YEAR; UI SYSTEM CAMPAIGN PROGRESS AHEAD OF PACE AND TARGETS The U of I System is also ahead of pace in its fundraising initiative, which is comprised of three unique fundraising campaigns with a collective $3.1 billion goal. As of September 15, 2021, the campaigns have together raised an impressive $3.26 billion and will continue into 2022. *The cash figure includes outright cash gifts, pledge payments, annuity/life income gifts, and estate distributions. **New business includes new gifts, grants, pledges, and deferred commitments.

$446 MILLION FY21 NEW BUSINESS

New Gifts, Grants, Pledges, & Deferred Gift Commitments

66.3%

27.8%

0.8%

5.1%

$295.7 Million

$124.1 Million

$3.6 Million

$22.6 Million

TOGETHER WE ARE UNSTOPPABLE

URBANA-CHAMPAIGN

SPRINGFIELD

SYSTEM

FY 2017–2021 NEW BUSINESS GROWTH $498.5M

Fiscal Year (July 1–June 30)

$462.9M

$462.1M

$446.0M

2019

2020

2021

$286.3M

2017

CHICAGO

2018

FY21 NEW REVOCABLE & IRREVOCABLE COMMITMENTS

$134.7M

97.8%

$400M+ 4TH CONSECUTIVE YEAR

*Irrevocable gift arrangements administered by UIF

Revocable Estate Plan Commitments

1.3%

Charitable Remainder Trusts*

0.9%

$131,696,967

$1,813,310

$1,201,329

Charitable Gift Annuities*

FY21 NEW BUSINESS

Fiscal Year 2021 (July 1, 2020–June 30, 2021)

FY21 NEW BUSINESS SOURCES

39%

16%

15%

13%

17%

ALUMNI

FRIENDS

FOUNDATIONS

CORPORATIONS

OTHER

$172.3 Million

$69.6 Million

$68.6 Million

$58.9 Million

$76.6 Million

FY21 NEW BUSINESS DESIGNATIONS

Research $62.8M Facilities $50.4M Student Support $76.0M Academic Programs $45.9M Public Service $17.5M Faculty Support $20.2M Other $5.7M Unrestricted $167.5M FOR 15 CONSECUTIVE YEARS NEW BUSINESS HAS SURPASSED

DONORS IN FY21

GIFTS IN FY21

$250,000,000 144K+ 48K+

TOGETHER WE ARE UNSTOPPABLE

CAMPAIGN HIGHLIGHTS

WITH ILLINOIS

CAMPAIGN GOAL

OF GOAL

$2.42B 789,982 163,478 Raised

Gifts

Donors

PROGRESS AS OF 09.15.21 To learn more about the With Illinois campaign, visit with.illinois.edu or contact the University of Illinois Office of Institutional Advancement at vcia@illinois.edu or (217) 333-9174.

In March of 2021, the With Illinois campaign surpassed its bold and lofty fundraising target of $2.25 billion a full year ahead of schedule. But the campaign is far from finished and will continue into 2022. “The need for private support in higher education is greater than ever before, especially in these uniquely challenging times,” said Robert J. Jones, chancellor at UIUC. “We are so grateful to our alumni and friends who continue to step up with their tremendous passion and pride for the University. Their generosity is truly inspirational and contributes to a very bright future for the University of Illinois Urbana-Champaign.” From named colleges to COVID-relief funds, the success of the campaign is wide in scope and can be attributed to more than 780,000 gifts of all sizes from over 163,000 donors. The outstanding support for Illinois has been seen in all corners of the campus. Eight individual colleges and units have reached or surpassed their unique goals and another seven are at least 75 percent of the way toward completion. “As a trustee and donor, I am proud of the With Illinois campaign’s success, and deeply grateful to our supporters for their generosity and to our advancement team for its hard work,” said Board of Trustees Chairman Don Edwards, an Illinois alumnus whose gifts include a $10 million donation with his wife, Anne, that is the largest ever by a U of I trustee. “This historic campaign will reap benefits for the University and its students for generations to come.”

With You. With Illinois.

WITH.ILLINOIS.EDU

108%

U N I VER SI TY OF I LLI N OI S | U R B A N A-CHA MPA I GN

$2.25 BILLION

TOGETHER WE ARE UNSTOPPABLE

FUNDRAISING HIGHLIGHTS

TURNING PASSION INTO ACTION

In Fiscal Year 2021, thousands of donors from around the world once again contributed to the land-grant mission of the University of Illinois Urbana-Champaign. This generosity supports an extraordinary commitment to sustaining excellence, educating the leaders of tomorrow, and sharing the power of innovation with the world. On these pages, you can see just a few examples of the remarkable gifts from the past fiscal year.

FY21 FUNDRAISING HIGHLIGHTS

The Phyllis M. Wise Fund for Student Excellence was launched by donors Rick and Jeanene Stephens with a $1.5 million challenge gift to support student affairs programming in the Carle Illinois College of Medicine. The Stephens’ challenge has been embraced by the Champaign-Urbana community with additional gifts, including a $1 million commitment from Jane Hays and UI Foundation Life Director Dave Downey.

Stephen and Denyse Hadley made a generous investment of $500,000 to establish a scholarship to enhance diversity in veterinary medicine.

WITH.ILLINOIS.EDU

A visionary $45 million gift from distinguished ACES alumna and UIF Life Director, Doris Kelley Christopher will support the creation of an engagementfocused extension center. Located in the Arboretum on the UrbanaChampaign campus, The Doris Kelley Christopher Illinois Extension Center will serve as the future home of the Illinois Extension, uniting six state Extension offices into one vibrant, welcoming space. It will serve as a bridge between discovery research conducted at the U of I and the translation of that work into communities around the state and beyond.

U N I VER SI TY OF I LLI N OI S | U R B A N A-CHA MPA I GN

Rich and Leslie Frank honored their passion for media and journalism with a $7.5 million gift to establish the Richard and Leslie Frank Center for Leadership and Innovation in Media. The center will have a transformative impact on students and will define future excellence, particularly in journalism.

TOGETHER WE ARE UNSTOPPABLE

CAMPAIGN HIGHLIGHTS

IGNITE

CAMPAIGN GOAL

$750 MILLION 94% Raised

Gifts

Donors

PROGRESS AS OF 09.15.21 To learn more about the IGNITE campaign, visit ignite.uic.edu or contact the UIC Office of Advancement at advance@uic.edu or (312) 413-8272.

IGNITE, the campaign for the University of Illinois Chicago, is now more than 94 percent toward its $750 million goal. More than 127,000 donors have contributed to the campaign, and together with you, UIC is redefining the model for student experience and success, cultivating and empowering faculty leaders, driving life-changing discoveries, and strengthening connections to our communities. “Our most passionate and dedicated alumni and friends have shown great generosity and advocacy for UIC that has helped us make tremendous strides toward reaching the lofty goal set for IGNITE: The Campaign for UIC,” said Michael Amiridis, chancellor at UIC. “The wonderful partnership we share with our donors helps UIC immensely and we are forever grateful for your support.” As part of the event "An Evening with Legacies & Leaders" in June of 2021, Christine M. Schwartz, UIC philanthropist and alumna of the College of Nursing, spoke about her passion for her alma mater. “I give because UIC did for me what I think it does for so many generations of students—it opens up whole new worlds of opportunity.” Gifts to the campaign are supporting scholarships, research, public service endeavors, faculty, facilities, and so much more. Donor generosity has helped UIC continue to soar in rankings and enrollment. In a report released in September 2021, U.S. News & World Report placed UIC 46th among public national universities, a rise in six spots from 2020. UIC’s ascent in the publication’s 2022 Best Colleges rankings follows a historic record enrollment — 34,199 compared to 33,518 in 2020 — for the seventh consecutive year.

It all starts with a single spark.

IGNITE.UIC.EDU

$708.4M 127,377 49,020

U N I VER SI TY OF I LLI N OI S | CHI CAGO

OF GOAL

TOGETHER WE ARE UNSTOPPABLE

FUNDRAISING HIGHLIGHTS

SPARKING OPPORTUNITY Giving to the University of Illinois Chicago supports the life changing impact of an urban-research powerhouse. In the past year, UIC recorded nearly $125 million in new business from thousands of donors. These gifts—whether large or small—all help UIC support and inspire students. The examples on these pages are just a few of the life-changing gifts from this past fiscal year that will help UIC shape the future by supporting students, engaging Chicago and its communities, and operating in new ways to foster and advance innovation.

FY21 FUNDRAISING HIGHLIGHTS

UIC received a number of major gifts including several seven-figure gifts such as a $5.7 million gift to the UIC Fund for Liberal Arts and Sciences, a $5 million gift for community health advocacy, several endowed chairs in medicine, and a $3 million gift to the College of Law, the largest bequest in its history.

IGNITE.UIC.EDU

Philanthropist and novelist Mackenzie Scott made a $40 million gift to UIC. This is the largest single gift in university history. Ms. Scott’s gift will be used to create a Student Success Fund, reinforcing UIC’s commitment to support student experience and success.

U N I VER SI TY OF I LLI N OI S | CHI CAGO

In FY21, annual giving donors to UIC increased by 30 percent despite the pandemic.

TOGETHER WE ARE UNSTOPPABLE

CAMPAIGN HIGHLIGHTS

REACHING STELLAR

CAMPAIGN GOAL

OF GOAL

$40.1M 113,302 16,790 Raised

Gifts

Donors

PROGRESS AS OF 09.15.21 To learn more about the Reaching Stellar campaign, visit uis.edu/reachingstellar or contact the UIS Division of Advancement at advancement@uis.edu or (217) 206-6058.

Reaching Stellar, the largest fundraising campaign in the University of Illinois Springfield’s history, passed its $40 million goal nearly a year ahead of schedule. “Achieving the Reaching Stellar goal has been a top priority for me since I arrived last year. I knew that the excellent groundwork laid by Chancellor Emerita Susan Koch meant we would reach our goal early,” UIS Interim Chancellor Karen Whitney said. “I’m delighted that this fundraising goal has been met ahead of schedule and am grateful so many alumni, donors and friends all see the value and impact of investing in UIS.” Nearly $8 million has been committed to 72 new scholarship funds that have already benefited more than 250 additional students. The Student Union, the first at UIS and built thanks to both student fees and generous donor gifts, has become the heart of campus since opening in 2018. The Center for Lincoln Studies debuted in 2021 and has already become a national base for scholarship, teaching and public history about Abraham Lincoln’s life and legacy. And the $13.5 million in gifts given to “The Public Good” supports the Illinois Innocence Project, NPR Illinois, and the UIS Performing Arts Services which means the excellent service to others that is the cornerstone of UIS’ identity will continue to flourish. “Reaching Stellar has always been about enhancing the excellent opportunities that UIS offers its students, faculty and staff,” said campaign co-chairs Hy Bunn, president and CEO of Bunn-O-Matic Corporation, and Saul Morse, of counsel at Brown, Hay & Stephens LLC, and director, UIF Board. “The overwhelming campaign support means UIS will be able to continue to transform lives.”

The stars are aligned.

UIS.EDU/REACHINGSTELLAR

100%

U N I VER SI TY OF I LLI N OI S | SPRI N GF I EL D

$40 MILLION

TOGETHER WE ARE UNSTOPPABLE

FUNDRAISING CAMPAIGN HIGHLIGHTS HIGHLIGHTS

ELEVATING STUDENT EXPERIENCE At the University of Illinois Springfield, every donor and every contribution has been critically important to helping UIS deliver on its mission of providing a uniquely student-centered educational experience both in and out of the classroom. In the past year, UIS has received hundreds of gifts and this collection illustrates just few examples that help UIS remain the top regional university in Illinois (U.S. News & World Report).

The Center for Lincoln Studies, a priority of the Reaching Stellar campaign, opened in 2021 on President Abraham Lincoln’s 212th birthday. The Center is a national base for scholarship, teaching and public history about Lincoln's life, leadership, and legacy.

Each year the Faculty & Staff Campaign at UIS encourages employees to make a gift. In FY21, more than half of all employees made a gift, totaling nearly $550,000 in gifts to enhance the university.

UIS.EDU/REACHINGSTELLAR

The Staley Class Acts Fund, established in the 1980s to provide arts programing to children, received a substantial gift that will permanently endow a program that has already provided more than a half a million young people with the opportunity to see live performances and productions.

U N I VER SI TY OF I LLI N OI S | SPRI N GF I EL D

FY21 FUNDRAISING HIGHLIGHTS

TOGETHER WE ARE UNSTOPPABLE

CAMPAIGN HIGHLIGHTS

TREMENDOUS MOMENTUM

COLLECTIVE CAMPAIGN GOAL

$3.1 BILLION 105% Raised

Gifts

Donors

PROGRESS AS OF 09.15.21 To learn more about the U of I System visit uillinois.edu. To learn more about the campaign progress, visit the Foundation's site at uif.uillinois.edu.

Your generosity and passion are critical to the success of the University of Illinois System and its three universities in Urbana-Champaign, Chicago, and Springfield. In 2017 the collective goal for the university campaigns—With Illinois, IGNITE, and Reaching Stellar—was announced as $3.1 billion. This goal was considered lofty and ambitious. But, our donor support has been tremendous and as of September 1, 2021, the system-wide goal was surpassed and reported more than $3.2 billion in gifts. “Our donors make the U of I System the gold standard for education and innovation, a place the world can count on to help steer through even historic challenges and drive new waves of progress,” said Tim Killeen, president of the University of Illinois System, in video remarks given in the 86th Annual Business Meeting of the University of Illinois Foundation. Even though the initial goal has been achieved, the momentum for the campaigns is high and the work toward fundraising priorities is far from finished. “I look forward to keeping the excitement for the campaigns and their priorities going until 2022,” said James H. Moore, Jr., president/CEO of the University of Illinois Foundation. “Our donors continue to answer our calls to be engaged and invest in this extraordinary University of Illinois System. This commitment is what makes us undeniably unstoppable.”

UILLINOIS.EDU

$3.26B 1,056,398 228,332

U N I VER SI TY OF I LLI N OI S SYSTEM

OF GOAL

TOGETHER WE ARE UNSTOPPABLE

ENDOWMENT REPORT

ENDOWMENT REPORT EDWARD B. CREEDON, INTERIM CHIEF INVESTMENT OFFICER

ECONOMIC AND MARKET REVIEW

What a difference a year makes. Looking back, the end of Fiscal Year 2020 marked some of the darkest days in many of our careers. In the grip of the global COVID-19 pandemic, we were shut up in our homes, businesses were shuttered, thousands were losing their jobs, entire cities, entire countries were effectively closed. For a few short hours in May of 2020, the price of oil was actually negative. If you wanted to sell your barrel of oil, you had to pay someone to take it from you. Fast forward to the end of fiscal 2021 and the world is a very different place indeed. The successful development and rollout of vaccines has turned the tide against the coronavirus. Record levels of government stimulus (both fiscal and monetary) helped keep many businesses afloat and put cash into consumers’ pockets. Economies have reopened. Unemployment is falling. In fact, the biggest concern in the labor market today seems to be a shortage of workers. Consumer confidence has rebounded dramatically, and pent-up demand has led to a surge in economic growth (not to mention consumer prices). The U.S. economy grew

at an annualized rate of 6.5% in 2Q21, and the level of GDP is now above where it started pre-pandemic. Other major economies around the globe have similarly shown a strong rebound. Corporations also fared well in FY 2021. With the 2Q21 earnings season nearing its close, companies in the S&P 500 Index have reported near record-level earnings and revenue growth. Of companies reporting, 87% have beaten their earnings estimates, and earnings have been coming in 17% higher on average despite a majority of companies having raised their estimates intra-quarter. Top line growth has also been strong, with average revenue growth reaching 25% year-over-year, the highest level since 2008. After making their lows in March of 2020, global financial markets began to rebound in the final months of FY 2020. A rebound which has continued largely unabated throughout FY 2021. Surprisingly— or perhaps not—commodities and natural resource equities were the best performing asset classes for the year, driven in large part by a more than 80% increase in the price of oil. U.S. equity markets and Emerging Markets both rose 41% during the year. European equi-

$2.69 BILLION UI FOUNDATION ACTIVE ENDOWMENT

78.1%

16.2%

0.9%

4.8%

$2.1 Billion

$434.6 Million

$24.5 Million

$128.5 Million

URBANA-CHAMPAIGN

CHICAGO

UI FOUNDATION ENDOWMENT POOL

95.3% of the Active Endowment



SPRINGFIELD

OTHER

$2.6 BILLION

DISTRIBUTED TO THE UNIVERSITY OF ILLINOIS SYSTEM

$73M+

81.0%

15.1%

$59,441,322 Urbana-Champaign

$11,062,023 Chicago

1.0%

2.9%

$713,598 Springfield

$2,115,522 Other

ENDOWMENT REPORT

ties were similarly strong, returning 36%. Fixed Income markets were more muted as rising bond yields hurt U.S. Treasuries, which returned -3.2% for the year. The U.S. dollar also declined -6.7% in value as the “risk-on” posture adopted by investors resulted in outflows from safe-haven currencies. While equity markets were up across the board, there was a significant reversal in leadership. The big IT and Consumer Staples stocks, which had benefited from the “stay-at-home” trade in 2020, lagged behind more cyclical sectors such as Financials, Industrials, and Materials, as investors shifted capital to the “re-opening” trade. Value stocks had a very strong year, reversing their underperformance trend of the prior three years. Likewise small-cap stocks handily outperformed large-cap stocks, while quality and low-volatility stocks were the worst performing styles.

TOGETHER WE ARE UNSTOPPABLE

FISCAL YEAR IN REVIEW Following the challenging market environment in the first half of 2020, we entered FY 2021 with the endowment portfolio well-positioned to take advantage of the anticipated market recovery. As part of our ongoing risk management process, we run various scenario analyses and stress tests to ensure that the portfolio has sufficient liquidity on hand—in the form of cash and lower risk assets such as sovereign bonds—so that we can meet our current spending obligations to the University without having to sell assets at distressed prices. This approach placed the

portfolio in good stead as the COVID-19 pandemic hit and global markets declined precipitously in February and March of 2020. We took advantage of the market dislocation to strategically rebalance the portfolio, adding to those asset classes that had been oversold, and trimming back those whose relative valuation had increased the most. We also took advantage of our excess liquidity to selectively deploy fresh capital into unique investment opportunities that were brought about by the market dislocation. During the fiscal year, we funded five new mandates, made follow-on investments with two existing private market managers, and made a new co-investment with one of our private equity managers. Among the new mandates, three were in Emerging Markets—two active managers focused on India and Southeast Asia, and a passive index providing broad market exposure. These additions brought us close to achieving the new target allocation for Emerging Markets which the Foundation's Investment Policy Committee had increased to 10% in June of 2019. These seeds planted during the depths of the pandemic have borne fruit over the past year. The portfolio was well-positioned to capture and even exceed the broad market recovery that unfolded. For the fiscal year ended June 30, 2021, the endowment portfolio generated strong results, returning 34.6% net of fees and expenses. This outpaced the policy portfolio benchmark’s return of 28.6% by 600 basis points (see Exhibit 1), and the passive 60/40 portfolio by more than 1100 basis points. We are also pleased

EXHIBIT 1: ENDOWMENT POOL COMPARISON TO BENCHMARKS

Presented in years as of June 30, 2021 1

ONE

THREE

FIVE

TEN

Total Return (net of fees) 2

34.6%

11.0%

11.4%

8.4%

Total Portfolio Benchmark

28.6%

10.1%

10.2%

8.4%

Relative +/-

6.0%

0.9%

1.2%

0.1%

Annualized Effective Total Spending Rate 3

5.7%

5.3%

5.2%

1 Returns for periods greater than one year are annualized returns expressed in percent per year. 2 Performance is presented net of external investment management and incentive fees and includes legacy assets no longer relevant to the ongoing strategic management of the portfolio. 3Includes Administrative Fee. Spending is pursuant to the Foundation's policy and in consultation with the University. The policy is reviewed annually by the Foundation's Board of Directors. For 2021, the 5.7% total spending consists of a 4.3% "effective" spending rate and a 1.4% "effective" administrative fee. The Foundation currently distributes 4.0% of a six-year moving average of the corpus of most endowment accounts to the University.

that the return on the endowment pool has exceeded the Minimum Required Return for the 1, 3, 5, and 10-year periods. As a perpetual pool of capital, it is important to focus on the long term performance of the endowment. The longer-term performance of the portfolio has also been quite strong, exceeding the policy portfolio by 90 and 120 basis points annually for the 3- and 5-year periods, respectively. Another way of assessing long-term performance is to look at the cumulative return of the portfolio over time. Exhibit 2 illustrates the growth of $100 invested in the endowment over the past decade and compares it to an investment in the passive 60/40 portfolio. An investment of $100 in the UIF endowment in June of 2011 has more than doubled in value and would now be worth $226,

whereas the same amount invested in the passive portfolio would be worth only $193. This additional $33 represents the long-term value created by the Foundation’s active investment program compared to a passive implementation approach.

PRELIMINARY PERFORMANCE ATTRIBUTION The endowment portfolio delivered strong performance across the board. As can be seen in Exhibit 3, all of the portfolio’s major asset classes delivered positive absolute performance during the fiscal year, with seven of the 10 outperforming their respective policy benchmarks. The public equity portfolio’s bias towards value and small-cap stocks was a significant driver of returns. On an absolute basis, the largest contribu-

EXHIBIT 2: GROWTH OF $100 OVER THE LAST 10 YEARS

As of June 30, 2021

$240 $226 $220

$200

$193

$180

$160

$140

$120

$100

$80 2011

2012

2013

2014

2015

 UIF

2016

2017

 60/40

2018

2019

2020

2021

ENDOWMENT REPORT

tors to topline performance were U.S. Equity (+54%), followed by Emerging Markets (+45%), Global Hedged Equity (+43%), and Private Equity (+41%). The portfolio also performed well compared to the policy portfolio benchmark. The largest contributors to relative outperformance versus their benchmarks were Global Hedged Equity (2,000 basis points ahead), U.S. Equity (1,000 basis points ahead), and Real Estate (1,800 basis points ahead). The largest detractor from relative performance was Non-U.S. Developed Equity (-530 basis points behind). Although trailing its benchmark, Non-U.S. Developed Equity still showed strong absolute performance.

CURRENT ASSET ALLOCATION & THE POLICY PORTFOLIO

TOGETHER WE ARE UNSTOPPABLE

The policy portfolio benchmark represents the returns that hypothetically would have resulted

if each asset class had been weighted at its policy target weight and generated the average asset class return. The Foundation’s Investment Policy Committee, based on input and recommendations from the CIO and the Investment Team, reviews the policy annually. At its meeting in June 2021, the Committee voted to maintain the current asset allocation targets (see Exhibit 4). The policy portfolio is the theoretical mix of assets that will best support the program’s “intergenerational equity” or the balance between current spending distributions and future principal growth that can support spending in perpetuity. It is not a completely investable benchmark, nor can it be easily replicated especially as it pertains to its private asset components. However, it seeks to come as close as possible to a passive proxy for the endowment’s strategic policy. The policy portfolio is reviewed and discussed annually within the context of both expected returns (on

EXHIBIT 3: FY 2021 ASSET CLASS RETURNS

As of June 30, 2021

U.S. EQUITY

NON-U.S. DEVELOPED MARKETS EQUITY

EMERGING MARKETS EQUITY

GLOBAL EQUITY

PRIVATE EQUITY2,3

GLOBAL DIVERSIFYING

GLOBAL RATES

GLOBAL INFLATION-LINKED BONDS

REAL ESTATE2

NATURAL RESOURCES2 0%

10%

 POLICY BENCHMARK RETURN

20%

30%

40%

 ASSET CLASS RETURN1

1 Asset class returns are shown net of external investment management and incentive fees. 2 Asset class returns reflect June 30, 2021 statement values. 3 Policy Benchmark Return for Private Equity is preliminary.

50%

60%

ENDOWMENT REPORT

a 10-year forward basis) and estimated risk, but does not typically change significantly from year to year unless financial conditions or the University’s financial goals change dramatically. Although the investment team is highly attuned to the changing forces shaping the market, our primary goal is to manage around the long-term strategic target allocations within the ranges established by the Investment Policy Committee. Having an established long-term target within a reasonable range allows us to re-balance the portfolio after significant market moves.

TOGETHER WE ARE UNSTOPPABLE

THE YEAR AHEAD

“Unprecedented” was the word of the year in Fiscal Year 2021. We experienced a global public health crisis the likes of which hadn’t been seen in over a century— if ever. Entire economies were shuttered for months on end. Global trade and transit ground to a halt. Millions of human lives were lost. The response from governments around the world was equally unprecedented. Fiscal spending reached levels that haven’t been seen since the end of the Second World War. Central banks provided monetary stimulus that far exceeded the levels seen during the Global Financial Crisis. As we look forward to the coming year, there is much reason for hope. Businesses and consumers have shown us that human ingenuity should never be underestimated. We have adapted the way we work and live. Though it has been difficult, and often far from ideal, we have kept moving the ball forward. Doctors and scientists have developed life-saving vaccines and treatments that have allowed us to begin re-opening our economies. Government stimulus has staved off the worst-case economic scenarios and provided a kick-start to economic growth, which has come roaring back. Financial markets have embraced this optimism, delivering one of the strongest years on record and taking stock markets to near all-time highs. But make no doubt about it, these are uncharted waters. There is still a great deal of uncertainty that lies ahead. On the public health front, while much progress has been made battling the coronavirus, in recent weeks we have seen the emergence of the Delta variant. It has spread rapidly and continues to exact a heavy human and economic toll on society. Many cities and states have started to roll-back or delay the re-opening of their economies. For the first time in decades, markets and consumers are having to wrestle with the specter of sustained rising inflation. Consumer and producer prices have been steadily rising at rates well in excess of the Fed’s target rate of 2%. The Fed maintains that this increase

is “transitory”—the result of bottlenecks in the supply chain amidst the re-opening. While this most certainly explains some of the rise in prices, there is increasing evidence of price pressures broadening beyond just the re-opening segments. Importantly, labor shortages are prompting employers to increase wages, which puts further upward pressure on prices. We do not try to predict the outcome, but as prudent investors we would have to say the risks are weighted towards inflation remaining higher for longer, and we must prepare ourselves accordingly. The Fed has also indicated that it will begin to unwind—or “taper”—its quantitative easing (QE) program, possibly as soon as Q4 of 2021. QE was a novel monetary policy tool that the Fed and other central banks around the world implemented during

"WORKING TOGETHER, WITH THE INVESTMENT POLICY COMMITTEE, WE WILL CONTINUE TO BE GOOD STEWARDS OF YOUR CAPITAL." the depths of the Global Financial Crisis in 2009. It was intended as a temporary measure, but more than 12 years later the Fed is still actively purchasing treasuries and other securities on the open market for its own balance sheet. Indeed, the program was expanded in 2020 in response to the COVID-19 pandemic. The last time the Fed even spoke of attempting to reduce its asset purchases was in 2013. As you may recall, the resultant “taper tantrum” sent financial markets into disarray, forcing the Fed to walk back its plans to unwind the program. The central bankers have

undoubtedly learned valuable lessons from that episode, and have been much more cautious in their approach this time around. However, we should expect that there may be periods of significant (and possibly extreme) volatility in the markets as the tapering unfolds.

CONCLUDING REMARKS In a year where we all faced extraordinary challenges, having to learn and invent new ways to do our jobs, it is a great pleasure to be able share with you the strong results of the endowment’s investment program for Fiscal Year 2021. Exceptional years such as this one should rightfully be celebrated, but we nevertheless remain humble in the face of

the uncertain challenges that lie ahead. We do not know, and cannot know what the future will bring. Markets are unpredictable, and rarely behave as the pundits pronounce. The experience of navigating the COVID-19 pandemic over the past 18 months has taught us the importance of being flexible and ready to pivot in response to changing conditions. Working together with the Investment Policy Committee, we will continue to be good stewards of your capital, positioning the portfolio to weather the periods of market volatility that inevitably lie ahead. We will focus on continuing to achieve our long-term objectives, ensuring that we have ample liquidity to meet our spending obligations to the University, and growing the endowment to support future generations of University of Illinois students.

EXHIBIT 4: ACTUAL FY 2021 VS. POLICY PORTFOLIO ASSET ALLOCATION

UIF ACTUAL

CURRENT TARGET1

67.2%

63.0%

U.S. Equity

15.4%

14.0%

Non-U.S. Developed Markets Equity

12.6%

12.0%

9.8%

10.0%

Global Equity

16.7%

17.0%

Private Equity2

12.7%

10.0%

15.8%

17.0%

15.8%

17.0%

20.0%

3.1%

4.0%

Global Inflation-Linked Bonds

3.4%

4.0%

Real Estate

4.7%

6.0%

Natural Resources4

5.8%

6.0%

100.0%

GLOBAL EQUITY

Emerging Markets Equity

GLOBAL DIVERSIFYING Credit/Distressed/Absolute Return MACRO RISK HEDGES Global Rates3

TOTAL As affirmed by the Investment Policy Committee in June 2020. Includes LBO, Mezzanine, M&A, Growth Equity, International, and Venture Capital. 3 Includes short duration liquidity assets resulting from portfolio and gift cash flows. 4 Includes energy (oil and gas), timber, and agriculture. 1

As of June 30, 2021

FOUNDATION LEADERSHIP

OFFICERS OF THE BOARD CHAIR Anthony G. DiTommaso ’74, MS ’76 Managing Partner, Ecvall, LLC

IMMEDIATE PAST CHAIR Kay M. Schwichtenberg ’84 President & CEO, Central Life Sciences

PRESIDENT/CEO James H. Moore, Jr. SECRETARY Jacquline N. Schweighart ’03, EdM ’09 TREASURER & CFO Christine C. Devocelle MBA ’13 INTERIM CHIEF INVESTMENT OFFICER Edward B. Creedon

TOGETHER WE ARE UNSTOPPABLE

ASSISTANT TREASURERS Kelly L. Bennett ’04, MAS ‘05 Michelle S. Bolger MBA ’14 LEGAL COUNSEL Wesley W. Curtis ’83, JD ’86

GOVERNING DIRECTORS Shakeeb A. Alam ’97 Co-founder & President, East Bridge Capital Management

Donald E. Bielinski ’71 Managing Partner, SMB Interim Management, LLC

Mark D. Coe ’84 Managing Member & Chief Investment Officer, Intrinsic Edge Capital Management, LLC

Alan D. Feldman ’74, MBA ’76 (Retired) Chairman, President & CEO, Midas, Inc.

Laura L. Fraley ’77, MS ’79

Henry B. Blackwell II ’52

Roger L. Plummer ’64

(Retired) Global Personnel Development Manager, Ford Motor Company

(Retired) Counsel, Baker & Daniels, LLP

President, Plummer & Associates Consulting

Alice C. Campbell JD ’43

Gayl S. Pyatt ’64

Jean M. Manning ’72, MBA ’78, JD ’83

(Retired) Treasurer, The Robert Campbell Company

(Retired) Attorney, Gayl Simonds Pyatt, Attorney at Law

Emeritus Chief Counsel for Employment, United States Senate

Doris K. Christopher ’67

Mark A. Pytosh ’86

Founder & Chairman, The Pampered Chef, Ltd.

President & CEO, CVR GP, LLC

Richard G. Cline ’57 Chairman, Hawthorne Investors, Inc.

(Retired) Commissioner, Illinois Human Rights Commission

James R. DeBord ’69, MS ’71, MD ’74

Edwin A. Scharlau II ’66, MS ’68, PhD ’74

(Retired) Professor of Surgery, University of Illinois College of Medicine Peoria

(Retired) Vice Chairman, Busey Bank

A. Helen McGrath ’77, MS ’78 (Retired) Vice President, AT&T Inc.

Samuel Mendenhall ’88, JD ’91 Partner, Winston & Strawn, LLP

Saul J. Morse ’69, JD ’72 Attorney, Brown, Hay & Stephens, LLP

Richard C. Osborne MBA ’73 Senior Managing Director, Madison Industries

Deborah A. Paul, PhD MS ’79

Jane Phillips Donaldson ’65, MS ’67 Partner, Phillips Oppenheim

(Retired) Biochemist/Director, Business Development & Licensing, Abbott Laboratories

David J. Downey ’63, JD ’66

Mary Ellen Penicook ’81, JD ’87 (Retired) Corporate Attorney & Assistant Secretary, Federal Signal Corporation

José L. Santillan ’80 (Retired) Senior Securities Compliance Examiner/Industry Expert Division of Enforcement, US Securities & Exchange Commission

Khawar M. Siddique ’94, MD ’98 CEO, Beverly Hills Spine Surgery, Inc.

Paul T. Tucker ’70, MS ’71, PhD ’75 (Retired) Corporate Vice President, Computer Sciences Corporation

Jane Hayes Rader ’54

George T. Shapland ’55 President, Shapland Management Company

Bernard Shaw ’66

President, The Downey Group, Inc.

(Retired) Principal Washington Anchor, CNN

W. Robert Felker ’74

Michael T. Tokarz ’71, MBA ’73

Partner, Gator Trading

Chairman, The Tokarz Group, LLC

Juanita F. Francis ’70

Carl L. Vacketta ’63, JD ’65

President, F2 Family Foundation

(Retired) Senior Counsel, DLA Piper, LLP (US)

Louis A. Friedrich ’67 (Retired) Principal, Bernstein Global Wealth Management

EXECUTIVE OPERATIONS TEAM

John A. Georges ’51

James H. Moore, Jr.

(Retired) Chairman & CEO, International Paper Company

President/CEO

Barry Benson

Phillip C. Goldstick ’53

Senior Vice President; Vice Chancellor for Advancement, UIUC

(Retired) Chairman of the Board, G. Equity Investment Group, Ltd.

Wesley W. Curtis ’83, JD ’86

G. Stephen Irwin MD ’77

Vice President and General Counsel

(Retired) President & Chairman, The Center for Outpatient Medicine

Richard H. Darnell, Jr. Senior Vice President for Development

EX-OFFICIO DIRECTORS

Mannie L. Jackson ’60

Donald J. Edwards ’88

(Former) Chairman, Harlem Globetrotters

Christine C. Devocelle MBA ’13

Gail Veasman Kellogg ’65

Edward F. Ewald

Chief Operating Officer/CFO

Principal, Greenway Family Office, LLC

Chair, University of Illinois Board of Trustees; Chief Executive Officer, Flexpoint Ford LLC

Alejandra Garza ’88

Timothy L. Killeen

Shahid R. Khan ’71

President, University of Illinois System

President, Flex-N-Gate Corporation

Paul Ellinger

Robert Klaus ’57

Senior Vice President for Principal Gifts and Presidential Activities

Interim Vice President, Chief Financial Officer and Comptroller, University of Illinois System

President, Klaus Companies

Jeffrey D. Lorber

Gregory B. Lykins ’69

Senior Vice President; Vice Chancellor for Advancement, UIS

Founder and Principal, AGG Consulting

Karen M. Golz ’76 (Retired) Global Vice Chair, Ernst & Young Global Limited

Leon J. Loichle MA ’71

Mary Kay Haben ’77

James H. Moore, Jr.

(Retired) President, North America, William Wrigley Jr. Co.

President/CEO, University of Illinois Foundation

Cynthia M. Helle ’85 Director, The Josselyn Center and Providence Englewood Charter School Foundation

Stuart L. Levenick ’76 (Retired) Group President, Caterpillar, Inc.

LIFE DIRECTORS James M. Benson ’68 Chairman, Benson Botsford, LLC

Gary K. Bielfeldt ’58, MS ’59 Managing Partner, Bielfeldt & Company, LLC

(Retired) Partner, Hewitt Associates

Vice Chairman, First Busey Corporation; Co-Founder and Partner, Amory Capital LLC

Executive Vice President

Shari M. Fox

Jacquline N. Schweighart ’03, EdM ’09

Of Counsel, Sidley Austin, LLP

Senior Vice President for Central Development Services

William C. Merchantz ’79

Thomas F. Wamsley

R. Eden Martin ’62

(Retired) President & CEO, Lakeview Technology, Inc.

Steven L. Miller ’67 Chairman & President, SLM Discovery Ventures, Inc.

Senior Vice President; Vice Chancellor for Advancement, UIC

The University of Illinois Foundation, established in 1935, is an independent Illinois not-for-profit membership corporation dedicated to securing and administering private gifts for the University of Illinois System and its three universities. More than 150 Foundation professionals develop and support the vision and efforts of the advancement teams at each university. As the primary repository of private support to the University of Illinois System, the Foundation is committed to best practices, continuous improvement, quality service, upholding our fiduciary responsibility, and—most importantly—honoring donor intent. OU R VA LU E S : Exemplify Integrity // Practice Civility // Embrace Collaboration // Inspire Innovation // Create Impact Learn more about the University of Illinois Foundation at uif.uillinois.edu.

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