UW-Madison’s endowment grew 28.7% in the most recent fiscal year, joining a number of colleges across the country reporting record returns because of the soaring stock market.
The one-year return rate for the year ending June 30 brought the total endowment to an all-time high market value of $3.98 billion, UW Foundation spokesperson Tod Pritchard said. Past one-year returns over the previous four years have ranged from 1.2% to 14.2%.
The UW Foundation hasn’t historically highlighted return rates beyond including them in annual reports, but officials provided data ahead of publishing their fiscal year 2021 report at the Wisconsin State Journal’s request.
Large universities and highly ranked colleges nationwide are celebrating record-setting endowment gains in recent weeks, according to news releases and media reports. The University of Minnesota‘s endowment gained 49%, the University of Michigan‘s endowment grew 41% and University of Illinois posted a 34% return. Massachusetts Institute of Technology and Duke University both reported a 56% gain in the past year and Harvard University saw a 34% rise.
UW-Madison’s endowment gain trails slightly behind some of its peer universities, which UW Foundation president and CEO Mike Knetter attributed to having a lower tolerance for risk in its investments compared to some other schools. That means the endowment experiences a little less upside when the market is up and a little less downside when the market is down.
“A year like we just had is a great tailwind,” he said. “But we’re really long-term investors.”
Over a 10-year period, the UW Foundation is averaging a nearly 9% return. “That’s really the number we tend to focus on,” Knetter said.
Michael Stohler started last month as the foundation’s new chief investment officer. He came from Washington University in St. Louis, which has a larger endowment than UW’s and posted a 65% return.
UW’s endowment portfolio is made up of more than 6,300 funds from donors, many of whom have specified how they want their gifts spent. The foundation each year moves some of the money from its endowment — about 4.5% — to UW-Madison.
During the 2021 fiscal year, a record amount of more than $300 million was distributed to support student scholarships, faculty, research and other programming, Knetter said. The rest remains invested in stocks, bonds and other assets to keep the fund going in perpetuity.
When the COVID-19 pandemic hit, UW Foundation officials initially worried about transferring the same percentage of the endowment it has historically distributed to UW-Madison.
“We weren’t sure we could maintain the 4.5%,” Knetter said. “There were more conversations about does this need to be dialed back a bit?”
The markets, however, recovered quickly. But concerns remain about what’s to come.
“Many feel we’re at precarious point right now,” Knetter said, noting inflation is on the rise. “We’re always trying to be invested in a way that we can ride the ups and downs without too much volatility in the underlying distributions.”
Know Your Madisonian 2021: Profiles from the Wisconsin State Journal's weekly series
They're your neighbors, co-workers or friends you may not have met yet. And they all have a story to tell.
Lessner started out in the laundromat business when he was about 10 years old helping his dad.
The Madison Police Department's new public information officer Tyler Grigg wants to be timely, open and maybe even a little creative in his new position.
Rowan Childs, 44, wanted to fill her home with books for her own children to enjoy but knew not all children are able to have the same experience.
“I did find my passion," says Sally Zirbel-Donisch, "... it was working with not only students and families but staff and partners in the community."
In 1992, Kathy Kuntz enrolled in UW-Madison, expecting to earn a PhD in history, but it was a temp job as a receptionist at a nonprofit that led her into what would become a career in energy.
Michael Graf has written five screenplays: "Winter of Frozen Dreams," "The Last Indian War," "Throwing Hammers," "Venice of America" and "Picket Charlie," a just-finished environmental action picture tackling climate change.
A poll worker and volunteer interviewer for the Fire Department, Pranee Sheskey says she enjoys being part of making democracy work.
John Adams and Michael Moody founded the nonprofit Catalyst for Change in January 2020 to eliminate human suffering one life at a time by placing human dignity and development at the forefront of poverty, addiction and homelessness.
Harambee Village Doulas is trying to improve infant mortality, maternal health.
For more than two decades, the Droids Attack front man has refurbished games at his business Aftershock Retrogames. Now, he's looking to open an arcade bar.
Tiffany Olson owns 120 plants, a Willy Street greenhouse store and a loving Havanese named Mia.
Matt Reetz has spent years studying birds, doing postdoctoral research around the United States, Australia, the Caribbean and southern Chile.
Tony Gomez-Phillips' prairie-inspired planting connects Frank Lloyd Wright's architecture with a garden style that embodies his views of nature and how it interacts with humans.
Since 1962, the McCann family name led efforts to make sure Hilldale shopping center is clean and safe. Now Tom McCann has retired to fish, hunt turkeys and catch Dungeness crabs.
Out Health, run by Dr. Kathy Oriel, is in a former dentist's office on University Avenue.
Ken Fager turned pandemic boredom into a popular public art campaign of 3D-printed miniature state Capitols placed throughout Downtown.
Teresa Holmes became Madison Rotary Club president in July.
Sedric Morris is Madison School District's new director of safety and security. His wife, Yolanda Shelton-Morris, is community resources manager in the city's Community Development Division.
This month, Magney announced he will be departing from the WEC to join VoteRiders, a nonpartisan nonprofit organization with the goal of ensuring that voter ID laws don't prevent qualified citizens from voting.
Omar Anguiano, founder of La Barra 608, cheers on his team and his group's community service mission.
American Family Children's Hospital's first facility dog was trained in Georgia and likes snuggling and Goldfish crackers.
"A year like we just had is a great tailwind."
Mike Knetter, UW Foundation president and CEO