NYU’s endowment — which contributes around 4 percent to NYU’s annual budget — grew 2.5 percent during the 2018 fiscal year, and the total combined endowment grew by $100 million, according to the Investment Office’s Endowment Fact Sheet, published earlier this month.
Though NYU’s Investment Office does not publish its returns on investment, the endowment’s growth rate slowed significantly from the previous year, which saw the fund grow nearly 14 percentage points or about half a billion dollars.
Universities typically spend around 5 percent of their endowments each year to fund university operations and programs. The larger the endowment, the more money NYU has to spend on research, financial aid, building renovations and more. The Investment Office uses an active, long-term investment approach and does not look to maximize any single year’s returns, according to the fact sheet.
The growth rate of NYU’s endowment was lower than almost all of its peer universities and was about half that of the worst performing school in the Ivy League, NYU’s upstate neighbor Cornell University. NYU’s 2.5 percent growth rate was also below NYU’s 15-year average growth rate of 8.4 percent, according to the Endowment Fact Sheet.
NYU spokesman John Beckman cautioned against drawing conclusions from yearly growth rates.
“The size of the endowment changes year over year as a consequence of various factors, including the return, annual spend — i.e., the income on the endowment that goes toward the budget — new contributions, and other withdrawals that are not part of annual spend,” Beckman said.
While the size of NYU’s endowment ranks about 25th in the country, the size of its endowment per student — which is a better indicator of how much the school can spend on its students each year — ranks around 200th, Beckman said.
Chief Investment Officer Kathleen Jacobs, who oversees NYU’s endowment, declined to comment.
Methodology note: Growth rates were calculated by subtracting 2017 endowment values from 2018 endowment values and dividing by 2017 endowment values.
A version of this article appeared in the Monday, Oct. 29 print edition. Email Sayer Devlin at [email protected].
