Bowdoin's endowment performance among peer institutions has been in the top quartile over the one, three, five, and ten-year periods. The endowment's performance following the stock market slide three years ago is exceptional due to the structure of the investment portfolio, which has outperformed those of other Maine colleges, such as Bates and Colby, by as much as eight percent.
Bowdoin receives gifts from alumni and contacts and hires external market managers to invest the gifted money. The College received more than $26 million in voluntary support gifts in 2004. Endowment money is used to help cover operating expenses and to provide financial aid. One of the College's goals is to grow the endowment in order to continue a need-blind admissions policy.
The endowment per full time student this year is $314,329. Senior Vice President for Finance and Administration and Treasurer S. Catherine Longley said that this number is calculated annually based upon annual audited financial statements. The value of the Bowdoin endowment at June 30, 2004 was $514,243,000. Expenses per full time student in the current year are approximately $56,000.
Vice President of Investments Paula Volent added that over the past several years, the endowment per student has increased steadily.
"There has been a significant trend upwards," Volent said. "And this takes into account the fact that there are more students at Bowdoin than in years past."
Volent noted that there are several reasons why Bowdoin's endowment has out-performed other schools.
"Each school's endowment differs based on the college's alumni and contact base as well as connections and introductions," she said. "At Bowdoin, we are lucky to have top professionals in our alumni base."
Volent also stated that Bowdoin's management strategies differ from other schools. She credited Bowdoin's investment success to smart decisions and careful selection of external investors in addition to "not taking big bets and trying to be patient while taking advantage of the long-term horizon."
She also explained that the school's portfolio would bear little resemblance to that of private investors. "For a personal portfolio, investors look ten or twenty years ahead," said Volent, "but as a college, we try not to look short-term; instead, we might look out over a hundred years. We have a horizon that could extend to perpetuity, since we are supporting generations of college students."
Like many investors though, Bowdoin does its best to keep a diverse portfolio. "We have a bias towards looking at alternatives," Volent said. Bowdoin has taken advantage of investment opportunities in everything from oil and gas to real estate and international equity. Bowdoin can take advantage of many options that few personal investors can because the College is tax-exempt.
Longley noted that there are many ways that the endowment benefit students. "Money distributed from the endowment each year helps support college operations?most notably financial aid and faculty positions and research," said Longley. "During the current academic year, we will spend approximately $20.5 million from the endowment. A strong endowment provides financial stability to the College in the long run. Funds in the endowment provide a source of permanent support for the College's programs."
The endowment is used to cover 21 percent of Bowdoin's operating budget every year.