What is the Macalester endowment?
The Macalester endowment is a long term investment fund made up almost entirely of private gifts made to the College over the past 100 or more years. The income from the endowment supports scholarships for students, academic programs, and salaries for faculty and staff. The Macalester endowment increased dramatically in 1990 as the result of a large gift of Readers Digest stock from DeWitt and Lila Wallace.
How large is the Macalester endowment?
The June 30, 2018 market value of the endowment (including the Holl trust) was $768 million, which puts Macalester near the average of the 40 largest liberal arts college endowments.
Do we still hold Readers Digest stock?
No, we do not. The last of the 10 million shares of Readers Digest common stock that we received in 1990 were sold in 2002. Our final holdings of Readers Digest preferred stock were liquidated in 2007. The sale proceeds were invested in a diversified portfolio of stocks, bonds, and alternative investments (real assets, private capital, hedge funds).
Who manages the endowment?
The Investment Office Staff has responsibility for management of the endowment. Staff includes Gary Martin, Chief Investment Officer, Derrick Griffin, Director, Alternative Investments, Jeff Doherty, Manager of Investment Analysis, and Molly Papetti, Manager of Investment Operations and Reporting. Oversight is provided by the Investment Committee of the Board of Trustees, chaired by Jeff Larson (’79). An investment consultant, Cambridge Associates, is retained to assist in asset allocation and other policy matters. 85% of the assets are managed externally, by approximately 45 different investment firms; 15% of the portfolio in treasuries and cash is managed in-house.
What have been the investment returns?
Our June 30, 2018 one-year net of fees return was 7.3%. Our 3, 5, and 10 year average returns were 4.9%, 6.7%, and 6.1%, respectively.
How much of the endowment do we spend each year?
Our distribution policy attempts to preserve intergenerational equity, i.e. future students should benefit from the endowment with the same purchasing power as today’s students. To attempt to assure this the Macalester endowment shall distribute spendable income equivalent to 50% of the allowable draw per unit of the previous year, increased by 2%; plus 50% of the long-term draw rate of 5% applied to the 16 quarter market value average of the endowment unit value for the period ending November 30 of the fiscal year preceding the budget year. After computing the proposed draw, the draw amount per unit shall be compared to the unit value of the endowment on the November 30 date; the proposed draw per unit shall not be more than 6% or less than 4% of that value.
How can you support Macalester’s mission?
There are many ways in which you can help ensure the strength of Macalester’s mission for generations to come. One of them is to endow a special fund, arrange a planned gift, or make a contribution to the Annual Fund (which reaches our areas of greatest need). In case you have any questions or concerns related to donations and gifts, please contact Nancy Swanholme, at 651-696-6070, by email at firstname.lastname@example.org or visit us online at www.macalester.edu/supportmac/howtogive/.