2008 Woodie Awards
How deep are Vandy's pockets?
Robyn Hyden
Issue date: 1/29/08 Section: Guide to Vanderbilt
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61% budgeted for health care services.
20.7% allocated for education, room and board.
13% funded research.
3% went to public services
2.3% for institutional support.
Operating revenues for fiscal year 2007: $2,732,900
64% from medical center revenues
13.9% from government grants and contracts
8.5% from gifts, private grants, and endowment distribution
8.4% from tuition, fees, room and board
5.2% from investment income and "other"
Vanderbilt's Endowment
as of June 30, 2007:
$3,487,500,000
What is an endowment?
An endowment is a fund that is donated to the university to be set aside and accrue interest. This money is invested to keep up with inflation. Endowments enjoy huge tax breaks.
Vanderbilt's endowment has grown significantly in the past ten years using a high-risk investment strategy. Around 22% of total assets are invested in venture capital, hedge funds, and private equity.
Well-managed endowments can outperform the market by huge margins. Some schools offer initiatives to donors by allowing them to invest their own money along with the endowment funds.
Approximately 75 percent of Vanderbilt's endowment is designated for specific uses by donors. It may be earmarked to give scholarships to particular students or to fund a particular part of the university, and it cannot be used elsewhere. Donors may also specify how the money can be invested.
Vanderbilt has the 23rd largest endowment in the country. The largest endowment in the country belongs to Harvard ($29.2 billion), followed by Yale ($22.5 billion) and Stanford ($17.5 billion).
Universities are generally required to spend at least 5 percent of their endowment annually in the general operating budget.
Despite requests from student organizations, a more transparent breakdown of the operating budget is not forthcoming from the administration.
Why can't the endowment be used to help lower tuition costs or increase financial aid?
Some members of Congress are asking the same question. Sen. Max S. Baucus (D. - Mont.) and Sen. Charles E. Grassley (R. - Ia.) sent out questionnaires to 136 of the nation's most well-endowed institutions, including Vanderbilt, on Jan. 24. The questionnaires are part of an investigation into the huge investment returns of the nation's wealthiest universities.
The Senators note that, while college endowments performed especially well in 2007, increasing by an average of 18 percent and considerably outperforming the market average, tuition rates continued to skyrocket faster than the rate of inflation. Presidential salaries also increased tremendously.
Harvard and Yale both recently announced initiatives to increase financial aid for students in higher tax brackets. Both schools plan to tap into their endowments to fund the difference. However, the initiatives will only take small percentages from the school's deep pockets-in the case of Yale, about one-tenth of one percent.
Lobbying
Vanderbilt currently spends around $200,000 annually on Congressional lobbying. These efforts are supervised by Vice Chancellor for Public Affairs, Michael Schoenfeld, and have helped Vanderbilt secure federal funding for the new Children's Hospital, the Free Electron Laser and the Advanced Carbon Nanoscale Program.
WHO TO KNOW:
Matthew Wright, Vice Chancellor for Investments
As Chief Investment Officer, Matthew Wright manages Vanderbilt's endowment. He is advised by the Board of Trust Investment Committee. Williams' last post was at Emory University, where he managed a $5 billion endowment. He replaced long-time CIO Bill Spitz last year.
Lauren Brisky, Vice Chancellor for Administration and CFO
As Vice Chancellor for Vanderbilt's Administration and Chief Financial Officer, Lauren Brisky heads up over 1400 staff members, including seven
Assistant Vice Chancellors and two Associate Vice Chancellors. Her job description says that she is responsible "for finance, facilities and construction, human resources, information systems, and
business operations."
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