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Endowment Growth Outpaces Peers in National Study

According to President Tori Murden McClure collaborative work has helped Spalding's endowment to grow.

According to President Tori Murden McClure collaborative work has helped Spalding’s endowment to grow.

For Spalding University, small, steady investments have produced large dividends as the university’s endowment growth outpaces its peers. Last week, Spalding University was identified by reporter James B. Stewart in a NY Times article as one of two top performers in the National Association of College and University Business Officers’ preliminary results for the 2013 Commonfund Study of Endowments®(NCSE)—released earlier this month. Spalding University’s $14.6 million endowment fund has more than doubled since 2006, and its perpetual growth and solid returns can be attributed to Spalding’s economical investment strategies and spending. While other universities and colleges have had to draw from their endowments to fund operating budgets during the recent economic downturn, Spalding has managed to avoid withdrawal. In fact, despite a growing enrollment and an expanding campus presence, Spalding has remained tight with its spending, managing to maintain its fiscal budget and even pay down its debt.

“We’re thrilled with the three- and five-year results on our endowment growth that have out-paced our peers,” says Spalding President Tori Murden McClure. “The collaborative work of the University’s leadership, Board of Trustees and Stock Yards Bank and Trust has paid off.”

Spalding University is on trend with other top-performing endowments, citing an 8 percent five-year return on investment and an 11 percent three-year return that was in sync with the 11 percent average three-year return for endowments under $25 million. NACUBO’s preliminary results—from the sample of 206 institutions that had completed the NCSE survey—suggest a decrease in institutions’ use of expensive alternative investment strategies, such as hedge funds, private capital, global venture capital, which often require management by investment consultants.

“We don’t have the capacity to pay consultants to manage those high-cost alternative asset classes,” Spalding’s chief financial officer, Mark Hohmann, stated in an interview with Stewart.

Stock Yards Bank and Trust, Spalding’s leadership team and the finance committee of the board of trustees manage Spalding’s endowment, which is primarily funded by donor trusts, charitable annuities and gifts. According to Hohmann, “Stock Yards Bank & Trust was identified as a local provider with reasonable fees and a core competency in investing endowment funds in traditional asset classes such as equities and fixed income. As a compassionate university, we appreciate that Stock Yards Bank & Trust employs stock screening techniques that allow us to invest in companies that give back their communities like Spalding does.”