Endowment Endowment and Development

Area Overview

A university’s endowment is used for many different purposes, including operating expenses, capital projects, endowed professorships and student scholarships, research and academic program support, and to protect against future recessions. It follows quite logically, then, that faithfully growing its endowment is one of the most responsible things a university can do to maintain its financial health and ensure its longevity.

An endowment is a collection of monetary donor gifts that an institution invests to generate income. Purdue’s endowment is actually made up of about 2,500 individual endowments. Each of these is designated for a particular purpose according to the guidelines and restrictions placed on it by the donor. This means that the university must spend the funds according to the donor’s instructions, and cannot direct funds into other purposes. The exception to this is quasi-endowments, which are designated by the President or schools and colleges within the university.

Historically, Purdue’s Development Office has not solicited gifts specifically for sustainability related projects. Recently however, several accounts have been set up that focus on sustainability. The Roger B. Gatewood Wing addition to the existing Mechanical Engineering Building and the Herrick Laboratory renovation received donor gifts to fund their certification through the LEED green building rating system. The projects will the first two at Purdue University to be LEED certified.

Roger B. Gatewood addition rendering

Socially and environmentally responsible endowment investing is a growing component of sustainability programs at many campuses.  The Endowment Survey portion of the College Sustainability Report Card is a widely-used benchmarking tool for assessing a university’s processes related to selecting investments, where its money is invested and whether that information is made public, and to what extent input is solicited from the campus community. Purdue scored very highly in two of three Endowment Survey categories in the 2010 Report Card.

The campus received an "A" grade in the Endowment Transparency category because all of Purdue’s endowment holdings are available upon request to both the campus community and the public per open records law. Campuses that make this information publicly available and easily accessible receive credit in the Report Card for making open dialogue about investment opportunities and priorities possible.

Purdue earned an "A" in the Investment Priorities category because its investment managers invest in renewable energy and alternative fuels. Since optimizing return on investment is part of a sustainable endowment — in the sense that it generates essential funds that support the institution over its lifetime — credit was given to schools like Purdue that have this as a governing priority.

The campus received a "D" grade in the Shareholder Engagement category. Purdue is not falling as short as it seems at first, however, because this is the average grade received by participating universities. Purdue’s investment policy stipulates that the master trustee/custodian is responsible for voting proxies consistent with the endowment’s stated investment objectives. This means that when voting on shareholder resolutions for subjects related to sustainability and social responsibility, Purdue will vote with management. Universities that score higher in this category have created multi-stakeholder advisory committees to help inform the trustees╒ decisions and promote sustainability incorporate governance matters.

With a $1.45 billion endowment as of June 30, 2009, Purdue has a tremendous opportunity to make positive social and environmental impacts through its investments. Also coupled to the endowment is a great responsibility to support Purdue and its mission for hundreds of years to come. Finding ways to integrate these complementary ideals is an important emerging piece of the university’s growing sustainability program.

Metrics

Purdue will track the following metrics to assess its sustainable investing activities over time.

Sustainability investing: 2014 Short Term Goals

  1. Establish a committee or workgroup to address how Purdue can expand sustainability investments while continuing to meet its financial objectives.
  2. Review the Campaign for Purdue and assess whether there are any sustainability-related funding needs that fit well with the New Synergies strategic plan.

Sustainability investing: 2025 Long Term Goals

  1. Review investments to assess how much is invested in sustainability-related industries, as defined by the Purdue Investment Committee, such as:
    • Renewable energy or sustainable forestry
    • Businesses with exemplary sustainability performances
    • A sustainability investment fund, such as a community development financial institution (CDFI)
    • A renewable energy investment fund
    • Socially responsible mutual fund with positive screens
    • Development Officer Education and outreach

Sustainability investing: 2014 Short Term Goals

  1. Develop an information packet on sustainability-related donor opportunities for Development Officers to have on hand to provide to potential donors.

Sustainability investing: 2025 Long Term Goals

  1. Attend the quarterly Development Officer meetings to provide updates on projects in need of funding so that Development Officers can relay this information to potential donors.

Strategic Plan