University funds: Danko aims to grow resources

Butler University’s endowment totaled $150 million as of August 2012, but President Jim Danko’s strategic vision wants to increase it to $750 million by 2025.

In order to achieve this goal, Butler’s endowment would need to grow by more than $4 million per month, on average, from September 2012 to 2025.

During Butler’s last fiscal year—Danko’s first year in office—the endowment lost $15 million.

Danko did not respond to The Collegian’s request for comment.

Ben Hunter, chief of staff, said Butler is in the process of developing a plan and assessing how the endowment will grow more than $600 million in 12 years.

“We’re holding forums,” Hunter said. “It’s one of those stretch goals, as the president has said before, but it’s one that is something that we have to have out there for people to understand—that the endowment is important for the health of this institution.”

Growing Butler’s endowment will be critical to achieving Danko’s goals, Michele Miller, executive director of constituent services, said in an email.

Hunter said educating people about Butler’s endowment will be essential to growing it.

“It’s educating folks (about) what the endowment does for the institution and how folks can participate, contribute and be life-long givers to the university,” Hunter said.

The endowment grew $5 million from May 31, 2012, to Aug. 31, 2012, the last period surveyed.

Bruce Arick, vice president of finance and administration, said the endowment will continue to grow mostly from new gifts but also from having a net gain in the return on Butler’s invested endowment.

“The economy impacts the general condition of the endowment,” Arick said. “We’re trying to balance risk with trying to optimize return.”

Arick said Butler’s endowment is invested in a diversified portfolio with more than half of Butler’s investment in domestic and international equities or stocks.

Every Dec. 31, administrators survey the last 12 quarters and determine what can be spent during Butler’s next fiscal year, Arick said.

In order to keep from losing money on investments or cutting into the endowments, Arick said Butler can spend 5.4 percent of its endowment this fiscal year.

“Anything that we’re spending now is benefiting the students in some way,” Arick said. “Aid is probably the most direct way in which students are benefiting.”

$2.4 million of the $51.8 million financial aid budget is expected to come from the endowment this year.

Hunter said one thing administrators are evaluating is how a growing endowment could change or lessen the cost of tuition.

Aside from financial aid, the endowment is also spent on things with no restrictions, such as Butler’s budget and investments.

Other endowment gifts have various restrictions, such as paying the salary of an endowed chair of a department, or money for a new building on campus.

Arick said endowment gifts are not given regularly like other gifts, but there is some spike in giving during December—when people try to take advantage of taxes—and at the end of Butler’s fiscal year in May.

Eli Lilly and Company and its affiliated foundations is one group that has given to Butler regularly.

David Marbaugh, Eli Lilly’s communications director of corporate responsibility, said the company provides Butler a yearly $75,000 grant for diversity and matches Lilly employees’ charitable contributions to Butler dollar-for-dollar.

Danko’s strategic vision operates from the “presumption of yes,” the idea that Butler will seek and reward creativity and innovation, but finding enough donors to say yes may not be easy.

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