2-5-99

OHIO STATE ENDOWMENT TOPS $1 BILLION

   COLUMBUS -- Ohio State University President William E. Kirwan made a surprise announcement at the Board of Trustees meeting Friday (2/5): The university's Endowment Fund ended the month of January with a market value of $1.01 billion. In reaching the figure, Ohio State joins just a handful of public or private colleges and universities nationwide that have billion- dollar endowments.

   The news coupled well with another milestone announced at the meeting: The "Affirm Thy Friendship" campaign, which recently increased its goal to $1 billion, last month surpassed its original goal of $850 million. Alumni, corporations and friends of the university have committed $884 million in private support since the campaign began in 1995, said Jerry A. May, vice president for development.

   "The dramatic increase in the university endowment has been fueled by $175 million in gifts to the endowment so far during the 'Affirm Thy Friendship' campaign, as well as a great stock market and outstanding investment management practices by the treasurer's office, and trustees and Foundation Board directors who serve on the university investment committee," May said. "The campaign is the result of a strong partnership between the University Foundation and volunteers, deans and academic leaders, and the University Development program."

   The campaign is chaired by volunteers Thekla Shackelford, Leslie Wexner, John F. Wolfe, Lawrence Barnett and Ambassador Milton Wolf. The honorary chair is Max M. Fisher.

   "The Ohio State University has enjoyed tremendous growth in private support for its academic priorities," Kirwan said. "We are committed to our goal of becoming a top 10 public university, and the tremendous support of our campaign and growth of our endowment will help us achieve that distinction. Much of our past and future success in making Ohio State one of the very best public universities in the nation would not be possible without the remarkable generosity of our donors."

   Like the campaign, the Endowment Fund has been picking up tremendous speed on the road to $1 billion, said University Treasurer James L. Nichols. It took the fund 133 years from its inception to achieve a balance of $500 million. It has taken just four years for it to increase from $500 million to $1 billion.

   The impact of the endowment at the university is widely felt. During fiscal year 1998, the endowment distributed more than $33 million of income to 2,559 funds. The fund distributes 5 percent of a three-year average of interest earnings.

   The impact on faculty and students also is clear. Through gifts to the "Affirm Thy Friendship" campaign alone, the endowment supports 61 new chairs and professorships, 203 new scholarships and fellowships, and 356 new research and program funds. In addition to the endowment, more than $40 million raised for scholarships already has been expended during the campaign.

   The month-end figures for January represented a $34.5 million increase from the Dec. 31 close of $975.7 million. Earnings in December were even greater, increasing the fund by more than $60 million. At the June 30 end of the 1998 fiscal year, the fund stood at $928.5 million, a $160.8 million increase over the previous year. The fund had a total rate of return of 20.6 percent for the year, as 123 new funds were added.

   Although market fluctuations can affect the fund -- the early stages of the crisis in Asian markets last summer sent the endowment plummeting more than $100 million, or 13 percent, over two months -- Nichols does not worry about major losses. "Markets go up and down, but the long-term trend is clear," he said. "Barring another Asian crisis, with a little luck in a month or two we'll be so far above $1 billion, we'll never look back."

   The key to success, Nichols said, has been the university's policy of asset allocation. Nearly 80 percent of assets are in common and preferred stocks, 15 percent in government and corporate bonds, 5 percent in real estate, and about 1 percent in cash and cash equivalents. "We have taken a posture in asset allocation that has been aggressive but not risky," he said. "That has paid off over time in a very handsome way."

Contact:
James L. Nichols, Treasurer, (614) 292-4777
Jerry A. May, vice president for development, (614) 292-2970

Written by David Bhaerman, University Communications, (614) 292- 8422