College endowments, which have been under considerable stress over the past few years due to poor stock market performance, made a marked comeback in 2004.
Tufts' endowment, though not hit as hard as other schools', continues to perform favorably. Improved market conditions as well as increased institutional giving have created a 14.6 percent return in the 2004 fiscal year, compared to 2.7 percent in 2003.
On average, colleges saw a 15.1 percent return on investments in the 2004 fiscal year, according to the National Association of College and University Business Officers (NACUBO), an organization which tracks data on over 2,500 institutions of higher learning.
This 15.1 percent figure contrasts sharply with the 3.8 percent average return that these institutions saw over the past five years.
"We're all pleased to see the good year, but there's still a long way to overcome the difficulties we've faced," NACUBO Research Director Jessica Shedd said on the association's Web site.
University VP of Finance Thomas McGurty confirmed the increase to a 14.6 percent return in the 2004 fiscal year in Tufts' endowment.
This increase leads to a 12.4 percent overall growth in the endowment, bringing it to a rough total of $752.4 million, up from $669.2 million in 2003.
McGurty attributed this year's growth to the stock market being up 20 percent and a flat rate of return on University bonds for the year.
Slightly more than half of the Tufts endowment is invested in equity asset classes. In 2003, the U.S. equity market posted a return of only 0.77 percent, while in 2004 the Tufts equity assets produced a return of over 20 percent.
In the long-term, Tufts' endowment has produced stable gains. As of June 30, 2004 the annualized return of the endowment over the past 10 years has been 10.1 percent. The under-performance of the past few years is represented in a 4.7 percent annualized return over the last three years.
Annualized return is an average of the returns over that period.
This comeback, attributed to changes in asset allocations and investment managers, resulted in a $556 million market value in Dec. 2004, up from $512 million in June 2004.
Financial gifts are also a large factor in endowment growth each year. In 2004, Tufts received a record amount of contributions totaling $116 million, said Lawrence Link, Executive Director of the University Advancement Office of Vice Provost.
Link attributed this year's "wonderful support" to the joint efforts of University President Lawrence Bacow, Provost Jamshed Barucha, and all the deans currently serving at the University.
"[They are] all on the same page as to what they want to do with the University," Link said. "[They] radiate a tremendous amount of enthusiasm."
Link praised the efforts of Bacow, whom he said loves working to improve the Tufts community and looking for opportunities and bringing in investors.
A significant portion of this fiscal year's contributions came from the Cummings Foundation which will donate $50 million over the next five years to Tufts' School of Veterinary Medicine.
Link said Mr. Cummings' relationship with the school as both an alumnus and a former trustee served as part of his decision to donate the money.
This is the single largest gift in the history of the University as well as one of the largest gifts ever given to either a veterinary school or a Massachusetts college or university.
Tufts also received an impressive amount of alumni contributions in 2004 totaling $22.6 million, the second largest alumni contribution.
Other local universities that struggled with deficits have likewise seen encouraging growth in their endowments. MIT is up 14.3 percent, Stanford is up 15.2 percent, and Harvard is up 17.5 percent - putting the Harvard endowment at just over $22 billion.
These universities are slightly under some other top universities such as Michigan, Northwestern, Notre Dame, Ohio State, and UNC Chapel Hill which all saw over 20 percent growth in their endowments in 2004, according to the NACUBO survey.
