Macalester has three main revenue sources: its endowment, tuition, and philanthropy. The purpose of the college’s endowment is to provide a sustainable and reliable level of support to Macalester’s operating budget. Each year, the college’s operating revenues include 5 percent of the endowment’s value averaged out over the previous four years. This formula is designed to support the college’s activities while preserving the endowment’s value over time and thus being responsible to those who will benefit from Macalester in the future.
The endowment revenue funds less than 40 percent of Macalester’s operating budget. The rest comes from tuition and fees and annual philanthropic support. The revenue from our endowment does enable the college to spend more on educating students, but it does not lessen the need for tuition or donor generosity. Relying entirely on the endowment to fund operations would quickly deplete it.
In the year that ended September 30, 2016, Macalester’s portfolio returned 5.5 percent, totaling $716 million. Macalester has outperformed its policy benchmark over the long term and ranks in the top quartile of endowment portfolios over 10 years. The endowment is managed to ensure that it grows faster than inflation and spending over time, providing a reliable foundation for Macalester’s future.