Rutgers, The State University of New Jersey: Budget Facts and Figures

Rutgers’ endowment is a set of funds that come primarily from charitable donations raised through the Rutgers University Foundation. Annual and capital campaigns seek to increase the endowment by soliciting generous gifts from private donors, alumni, and friends of the university. The goal of the endowment is to provide a permanent source of income beyond tuition and state monies to support the university’s mission.
As state support declines, the endowment has become an increasingly important element in the university’s funding of increased student aid, pioneering research, innovative teaching programs, and new technologies. The endowment is also essential to the university’s ability to attract and retain senior faculty and to maintain a vast physical infrastructure, including classrooms, libraries, and laboratories.
Rutgers’ endowment is modest for the university’s size and complexity. America’s wealthiest colleges and universities have endowments well exceeding $1 billion. The most recent survey released by the National Association of College and University Business Officers covering fiscal year 2011 lists Rutgers’ endowment at $698 million, placing the university 105th nationally in overall size of its endowment.
Rutgers’ endowment consists of thousands of funds, and most donors typically restrict their gifts to specific purposes. More than 51 percent of the university’s endowment funds are permanently restricted, and nearly half of these restricted funds are dedicated to scholarships and fellowships.
In 2009, the university revised the “Statement of Investment Objectives and Guidelines” (originally adopted in 2005), which describes the current investment objectives and policies governing management of the university’s endowment. Currently:
- The long-term investment objective of the endowment is to preserve and enhance the capital of the endowment by achieving a minimum total return of, on average, the spending rate plus inflation. Returns experienced in excess of this minimum total return provide for the long-term growth of the endowment.
- The university’s annual spending policy is to spend an amount not to exceed 4.3875 percent of a trailing 13-quarter average of the endowment’s market value. This spending rate allows the university to “smooth-out” year-by-year fluctuations in earnings, reducing the impact should an endowment lose value over the short-term.