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’ 2007 endowment total of $654 million is modest for a university of its size and complexity. Many colleges and universities have endowments that exceed $1 billion. In the most recent survey of endowments released by the National Association of College and University Business Officers, Rutgers ranked 115th nationally in overall size of its endowment.
At approximately $13,000 per student, Rutgers’ endowment pales in comparison to America’s wealthiest colleges and universities, whose endowments can translate into more than $1 million per student.
Rutgers’ endowment consists of thousands of funds, and most donors typically restrict their gifts to specific purposes. More than 56 percent of the university’s endowment funds are permanently restricted, and nearly half of these restricted funds are dedicated to scholarships and fellowships.
In 2007, approximately $7.4 million in endowment funds were distributed as tuition assistance. That figure represents more than 25 percent of the total endowment income in 2007 and is nearly twice the amount distributed in 1998.
In 2005, the university adopted a “Statement of Investment Objectives and Guidelines,” which describes the current investment objectives and policies governing management of the university’s endowment. Currently:

The long-term investment objective for the endowment is to attain an average annual real total return on investment of at least 5 percent as measured over rolling five-year periods.
The university’s annual spending policy is to spend an amount not to exceed 4.5 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 when an endowment loses value over the short-term.