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ISSUE 119 VOL 12 PUBLISHED 3/3/2006

Endowment ranking improves

By Sara Perelli-Minetti
Contributing Writer

Friday, March 3, 2006

St. Olaf College's endowment has grown from $152.5 million in 2003 to $231.8 million in 2005, ranking it the 199th largest in the nation, according to a recent survey by the National Association of College and University Business Officers (NACUBO). The 52 percent growth of St. Olaf’s endowment over the past three years has made it the largest of the 28 ELCA colleges and universities in America.

A recent article from the College Announcements webpage states that from the past one- and three-year periods the St. Olaf endowment has been a top performer, ranking among the top 10 percent of its peers.

Three years ago, the St. Olaf Board of Regents created an investment to better manage the endowment. The committee hired Hammond Associates, a St. Louis-based consulting firm that specializes in institutional endowments.

St. Olaf Assistant Treasurer Mark Gelle believes that the hiring of Hammond Associates contributed to the exponential growth of the endowment over the past three years.

In an interview with David Gonnerman, St. Olaf media relations specialist, Gelle said, "Hammond Associates has pushed us to consider greater allocations to non-U.S. stocks and alternative asset classes."

Gelle also noted that Hammond has provided the college access to funds and fund managers that would not otherwise be available, including a fund in which Massacheusetts Institute of Technology, Princeton, Yale and Stanford Universities are the principal investors.

The other major boost to the endowment has come from the $10 million St. Olaf received from the 2004 sale of WCAL radio station.

Students will not see a decrease in tuition because of the endowment growth. Gelle pointed out that there is actually very little correlation between the size of the endowment and the cost of tuition: The institutions with the largest endowments tend to have the highest tuitions.

Only about five percent of St. Olaf’s endowment is used for the yearly operating budget and spending from the endowment represents about eight percent of the college’s budget.

The bulk of the endowment maintains the college’s long-term goals as opposed to short-term ones that would directly affect currently enrolled students. NACUBO statistics reveal that the current amount of endowment per student is around $77,415, while the actual amount spent per student out of the endowment for the operating budget per year is roughly $3,000 to $3,500.

While the significant endowment increase will not affect current students' tuition, it raises St. Olaf’s national standing significantly, increasing opportunities for professors and students alike to receive grants and other forms of government funding.

The increase in endowment also promises progress on the new science center, and will hopefully encourage more donor confidence among alumni. Gelle sees St. Olaf as being able to continue such an excellent growth rate.

As of October, St. Olaf had the highest one-year rate of return among 262 of its private college peers, inspiring confidence that St. Olaf’s endowment will continue to grow, and along with it, the prestige and status of the school.

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