This report on Wheaton College’s endowment covers the 2021 fiscal year, ending on June 30, 2021. The endowment ended the year at a record high of $266.8 million and included $60 million of investment returns plus more than $8.6 million in new gifts. This growth during the 2021 fiscal year represented careful, long-term investment management and stewardship, along with the new contributions from the college community.
The college’s endowment is critically important to Wheaton’s future and helps it to sustain educational excellence. It ensures that a Wheaton education remains accessible to students, supports faculty teaching and scholarship, provides the flexibility to make strategic investments that enhance educational programs and strengthens the institution for the future.
Fundamentally, the college’s endowment is an intergenerational gift. It began with the Wheaton family’s estate and has grown over the years through the generosity and foresight of alumni, parents, families and friends who want to ensure that Wheaton’s distinctive educational opportunities are available for the students of today and the students of tomorrow. We are both honored, and take seriously, the responsibility of stewardship as we lead the effort to preserve and grow this resource for the present and future of Wheaton.
Janet Lindholm Lebovitz ’72
Chair, Board of Trustees
Maryann E. Carroll ‘79
Trustee and Chair, Investment Committee
Endowment At a Glance
Fiscal Year 2021
$266.8 million
Value of the endowment
$12.8 million
Distribution to Wheaton’s operating budget
16.6%
Portion of Wheaton’s operating budget supported by the endowment
657
Number of individual endowed funds
28.4%
One-year annual return
Endowment overview
Fiscal Year ’21 Endowment
The value of Wheaton’s endowment increased to $266.9 million in the 2021 fiscal year, which ended on June 30, 2021. That rise not only recovered the modest decline in value that was experienced in 2020 due to the pandemic, but also represented an historic high for the portfolio of endowed funds.
The college endowment’s $56.2 million net gain in the 2021 fiscal year came from both exceptional investment performance and generous philanthropic contributions. For the year, the funds realized a total of $60.4 million in investment returns as well as an additional $8.6 million in gifts from alumni, parents, families and friends. The endowment’s year-end total also reflects the $12.8 million distribution from the funds to support the college’s operating budget during the fiscal year.
| Description | Values |
|---|---|
| Beginning Value | $210,646 |
| Net Investment Return | $60,427 |
| Gifts and additions | $8,605 |
| Distribution | ($12,801) |
| Ending value | $266,877 |
Endowment value over time
Measuring investment performance
The annual average return on the endowment portfolio provides a critical measurement of the college’s investment strategy. The objective as stated in the Investment Committee’s policy is to realize a return that is equal to the annual inflation rate plus five percent. The target reflects the overall goal of preserving the long-term purchasing power of the endowment while generating revenue to support college operations. In the 2021 fiscal year, the average annual return exceeded the target by nearly 300 percent. Over the past decade, the college’s endowment investment results have consistently outperformed the committee’s goal.
We recognize that past is not prologue and there will inevitably be periods when investment returns will be more challenging. As constructed, we believe the endowment portfolio is well-positioned to weather more difficult markets and will be well served by our commitment to a long-term disciplined investment strategy.
Average Annual Earnings
Managing the endowment
The overall investment objective for Wheaton’s endowment funds is to preserve their purchasing power in order to provide a growing stream of endowment support for the college’s programs.. The college seeks to achieve on average an annual total rate of return equal to the annual inflation rate plus the annual spending rate, or draw, of the college. (e.g., CPI + 5%)
A fundamental piece of the investment strategy for the college’s endowment centers on diversification—diversification of the types of assets in which funds are invested as well as geographic diversification across domestic, international and emerging markets. The Investment Committee of the Board sets target ranges for each asset class and reviews the college’s portfolio against these guidelines regularly throughout the year, rebalancing holdings when necessary. The current asset class breakdown is shown in Table 2.
Wheaton’s endowment is structured to capture a significant portion of upside in world equity markets, while limiting its downside exposure when markets are under pressure. In the seven years to FY21, the endowment captured 77 percent of returns in world equity markets with about 51 percent of the risk.
While Wheaton’s endowed funds are managed to optimize risk-adjusted returns, the college also considers a broad array of Environmental, Social and Governance (ESG) factors in adopting, selecting, and regularly monitoring investment strategies and investment managers. In 2021, the Wheaton board made the decision to specifically allocate 10% of portfolio assets to managers with proactive ESG strategies.
| Description | Value |
|---|---|
| Equity (Total) | 64.0% |
| Private Investments | 6.3% |
| Multi-Strategy | 17.5% |
| Fixed Income | 6.5% |
| Cash & Equivalents | 1.80% |
The endowment management team
The Board of Trustees delegates to the Investment Committee the day-to-day work of overseeing the endowment portfolio based on the objectives, policies and practices as outlined in the Board’s Investment Policy. The Investment Committee currently includes 12 trustees and three non-trustee members who are experienced professionals in the investment industry or in higher education; it typically meets six times per year.
Additionally, the committee collaborates with the college’s administrative finance team and with their investment advisors, LVW Advisors, that provides outsourced Chief Investment Officer services including strategic counsel, research and implementation of manager selection and monitoring.
Looking to the future
“When I served as Chair of the Investment Committee, I saw how important the endowment is to not only sustain Wheaton’s excellence in the future, but to protect the college against inflation. A strong endowment helps Wheaton remain competitive and perpetuate the values and culture that we all admire and share. I would not have been able to attend Wheaton if it weren’t for the scholarship I received, and I feel proud to be able to give back to a close-knit community and well-managed institution like Wheaton.”
~ Diane Nordin ‘80, Trustee Emerita
Endowment Use at Wheaton
Providing essential support
Wheaton College’s high-quality and flexible liberal arts education is possible with the support of the endowment. This support, which takes the form of an annual cash distribution to the operating budget of the college, provides an essential source of funding for Wheaton’s programs. Aside from tuition and fees, the endowment is the largest source of revenue underwriting annual operations.
Endowed funds directly impact the most essential aspects of a Wheaton education. Eighty percent of the college’s endowed funds are “restricted” to support a defined purpose identified by the donors when the endowed funds were established (Table 3). These restricted funds help to create a stable foundation for the college’s students and programs, now and for the future.
| Purpose | Total Funds | Total Endowed Value-FY’21 | Distribution |
|---|---|---|---|
| Scholarships, Fellowships, & Internships | 348 | $133,665,830 | $5,938,850 |
| Faculty Chairs & Professorships | 85 | $50,587,698 | $2,342,188 |
| Academic Programs & Library | 141 | $25,216,068 | $1,155,485 |
| Facilities | 21 | $15,699,522 | $729,876 |
| Other (including athletics and equipment funds) | 62 | $41,708,589 | $2,635,124 |
The Louise Flaccus Reese ’66 Endowed Scholarship Fund
All small colleges are facing difficult challenges. A growing endowment enables Wheaton to compete with the best liberal arts colleges in the future. Endowments are typically the hardest funds to raise, but they are crucial for the viability of Wheaton. The Wheaton endowment is the life blood of the institution.
~ Louise “Weezie” Flaccus Reesse ’66
Providing stability and building strength through flexibility
The stability offered by the endowment can be particularly important in times of challenge. During the early days of the pandemic, like many colleges and universities, Wheaton encountered significant additional costs and a temporary revenue shortfall. The strength and stability of the endowment allowed the Board to authorize a temporary increase in the spending rate of the endowment, from five to six percent in fiscal year 2021, to help offset the combined cost/revenue impact of the pandemic, to support the students, and to maintain the quality of a Wheaton education. This spending rate will decrease over the next several years and return to the 5% target level.
Beyond stability, the college’s endowed funds provide critical flexibility to navigate new situations and embrace new opportunities as they arise. Nearly 20 percent of the college’s endowed funds are unrestricted, meaning those resources can be utilized where they are most needed, or to capitalize on emerging strategic opportunities that will strengthen the institution and enhance students’ educational experience. Future growth of the endowment will only add to the opportunity and flexibility that it brings to the college.
The college’s unrestricted endowment funds total $47.7 million and the return from those funds may be directed wherever it is most needed. The remainder of the endowed funds total $219 million and are dedicated to support specific programs and purposes.
The White Family Endowed Scholarship Fund
“Starting in the early 1900s, my grandparents began to contribute significant gifts to educational institutions in Rhode island. Our father, John Hazen White, Jr., extended the family passion for education with support to his alma mater as well as those of John III (Wheaton Class of 2010) and me. As a family, we recognize the value of education and believe in providing opportunity for anyone who wants to take advantage of a strong education. The White Family Endowed Scholarship is our small way of opening up doors.”
~ Benjamin White ’12, Trustee
View and download a PDF version of the Endowment Investment Report