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 (RDA) stock from DeWitt and Lila Wallace.
How large is the Macalester endowment?
The September 30, 2017 market value of the endowment (including the Holl trust) was $760 million, which puts Macalester above 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 RDA common stock that we received in 1990 were sold in 2002. Our final holdings of RDA preferred stock were liquidated in 2007. The sale proceeds were invested in a diversified portfolio of stocks, bonds, and alternative assets (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 Fixed Income and Cash is managed in-house.
What have been the investment returns?
Our September 30, 2017 one-year net of fees return was 10.6%. Our 3, 5, and 10 year average returns were 4.3%, 7.8%, and 5.5%, 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.
Is the Macalester endowment invested in a socially responsible way?
The College’s social responsibility policy for investments in corporations was formulated largely in response to South African apartheid. It affirms the primacy of maximizing economic return on the endowment, but allows the Trustees to take non-economic factors into consideration when making investment decisions. With increased campus interest in corporate citizenship, the Investment Committee has adopted a more proactive approach to exercising our shareholder rights. Emerging corporate social responsibility issues are reviewed in consultation with the College’s Social Responsibility Committee, and proxies and shareholder resolutions are voted with input from this committee when applicable.
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 Kate Abbott, Associate Vice President for Advancement and Campaign Operations, at 651-696-6065, by email at email@example.com or visit us online at www.macalester.edu/supportmac/howtogive/.