Mizzou's endowment reaches $1 billion
With the help of some recent big gifts and positive trends in the market, the University of Missouri-Columbia hit a new milestone: Its endowment reached $1 billion.
A hearty endowment makes universities look good when they’re competing for top faculty who are going to bring in grant money, as well as for top students.
It’s all about competition, and for a while, some other universities have had an advantage over Mizzou, according to Tom Hiles, vice chancellor for advancement.
Despite misconceptions about what a university endowment exists for, it’s not a pool of money that schools can tap for whatever they want.
Endowments don’t fix ongoing budget issues caused by declining state money and tuition revenue. Most schools pull only 3.5 percent to 5 percent of their endowment to spend on an annual basis. For Mizzou, it’s 4 percent.
About 95 percent of the gifts made to the university are restricted, Hiles said. At Mizzou, about one-third of the almost 4,000 active endowments are used to cover more than 1,200 scholarships. Just over 20 percent are used for more than 900 endowed faculty positions.
And almost one-third of the money covers specific programs, such as the Thompson Center for Autism.
Hitting the $1 billion mark for the overall endowment was a goal when the school kicked off its “Our Time to Lead” fundraising campaign back in 2012. A $21 million gift in September from the co-founder of Taco Bell pushed the campaign to $940 million. As is the case with capital campaigns, most of the larger gifts are pledges. A big payment on that $21 million gift — the sixth largest gift in the school’s history — helped push Mizzou into 10-digit territory.
Reaching the milestone hasn’t always been easy.
There was mounting concern after 2015 when some donors said they wouldn’t give to the university again. They were angry with the way the flagship campus handled a series of incidents including on-campus protests.
A then-Mizzou assistant professor, Melissa Click, was infamously filmed denying media access to student campus protesters, and ultimately, two top leaders stepped down from their posts.
The school has been plagued since with declining enrollment and donations.
Mizzou reported in July that the school collected $152 million during the budget year, which was down about $19 million from the previous year.
Leaders say they’ve bounced back from the donation dip.
José Gutiérrez, a co-chairman of the Our Time to Lead campaign, said the people who threatened not to donate again “became a minority.” As one of three co-chairs for the campaign, Gutiérrez is a major donor and advocate for the fundraising effort.
“I think everyone needed to vent, depending on what opinion they had on different issues, but ultimately I think we all reached the same conclusion,” said Gutiérrez, a retired AT&T executive. “When a person or an institution you love is going through its worst time, that’s when it needs help from its loyal ones.”
Overall, Mizzou’s endowment has grown by more than 85 percent in the last 10 years.
A chart from Hiles’ office shows the endowment at $540 million in 2008 before it dropped to $466 million the following year. It has recovered steadily since.
According to the National Association of College and University Business Officers annual catalog of university endowments, schools holding an endowment just over $1 billion after budget year 2016 included St. Louis University ($1.05 billion) and the University of Tennessee ($1.1 billion).
Mizzou is the seventh school in the Southeastern Conference to hit the milestone. The highest-ranking SEC school by endowment measures is Texas A&M University, which reached $10.5 billion in 2016.
Fewer than 40 public universities in the country have hit the $1 billion mark.
Leading all institutions in endowment size is Harvard University with $34.5 billion in 2016. In the same year, Washington University ranked No. 16 nationwide with $6.5 billion.