Sunday, July 21, 2024

Louisiana university endowment growth trails national average 

by BIZ Magazine

PIPER HUTCHINSONLouisiana Illuminator

Endowments that support Louisiana universities performed sluggishly when compared with the national average, but their growth is actually better than schools with some of the largest donor accounts.

Endowments for LSU, Tulane, Loyola and the University of Louisiana at Lafayette grew 2.5% on average in the 2023 fiscal year, well below the national average of 7.7%, according to the National Association of College and University Business Officers. Its study examined 688 endowments with combined assets of $839 billion.

Loyola was the only one of the four Louisiana endowments included to report a loss in 2023, though just barely. The New Orleans university’s fund shrunk just 0.1% from the previous fiscal year.

The LSU system endowment reported the highest growth among Louisiana universities at 5.9%.

Endowments are funds that universities or their foundations manage to support their educational goals in perpetuity. They primarily consist of private donations. Universities typically only spend the investment income from these funds but occasionally dip into the main pot in difficult financial times.

Many university endowments, including those in Louisiana, reported losses in 2022, primarily the result of market volatility related to inflation.

The numbers are still an improvement from pre-pandemic levels for LSU and Tulane. Loyola and ULL did not participate in the study in 2019.

LSU’s endowment grew from $926 million in 2019 to more than $1 billion in 2023, while Tulane’s increased from $1.4 billion to $2.1 billion over the same period.

The study also found universities withdrew more money from their endowments than in previous years, although this trend has been observed over several years as higher education institutions have struggled with pandemic-related fiscal uncertainty. Most of the spending was attributed to student financial aid, the study found.

The 7.7% national average growth is mostly attributed to smaller endowments, the study found. Louisiana endowments actually outperformed most of the top 20 endowments, which mostly reported losses or very minimal growth.

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