The University’s endowment grew from $5.65 billion to nearly $7.1 billion in the fiscal year that ended June 30, according to the University’s annual financial report, which was released yesterday.

The 25.5 percent growth of the endowment keeps up with increases at Ivy League heavyweights Harvard University and Yale University, which posted 23 percent and 28 percent increases respectively last year.

The financial report, which will be submitted to the University Board of Regents for approval at its monthly meeting on Thursday, suggests that the University is financially sound despite falling state contributions and a troubled Michigan economy. The University’s endowment, which was $2 billion in 1997, has more than tripled in the last 10 years.

Timothy Slottow, the University’s chief financial officer, and Erik Lundberg, the University’s chief investment officer, could not be reached for comment. Slottow will speak about the University’s finances at Thursday’s regents meeting.

Over the last decade, the University has lost millions of dollars in state funding. In 1997, the University received $315 million in state appropriations. This year, the University will receive about $334 million – about $60 million less than the University would be receiving if the 1997 figure were adjusted for inflation.

The healthy gains could irk students after a summer where the University decided to raise tuition by 7 percent. Although University officials have said the endowment can’t be used to cut tuition because the donations to the endowment are earmarked for specific purposes, some legislators and experts have suggested that returns on endowment investments could be used to cut tuition and decrease the need for state appropriations.

Experts speaking at a meeting of the U.S. Senate Finance Committee last month suggested that Congress consider legislation that would require colleges with endowments over $1 billion to use at least 5 percent each year for university operations.

The University of Michigan had the ninth-largest college endowment in the United States and the third largest among public institutions last year, according to data from the National Association of College and University Business Officers. Harvard’s endowment, the largest in the country, is $34.9 billion. Yale’s, the next largest, is $22.5 billion.

The University’s endowment could surpass the University of California system, which was the second-largest public school endowment last year and was $80 million larger than the University of Michigan’s. The University of Texas system’s $13.2 billion endowment was the largest of any public institution last year.

The University’s Ann Arbor campus receives more money from the endowment than most California and Texas campuses, though – while the University of Michigan supports three campuses, the University of California’s endowment supports nine and the University of Texas supports 15.

Leave a comment

Your email address will not be published. Required fields are marked *