CSUB endowment returns skyrocket

Endowment posts high returns this fiscal year, benefitting student programs

By California State University, Bakersfield

July 7^th, 2021

Last year, amid the pandemic, colleges and universities across the nation recorded lower-than-average endowment returns. Inside Higher Ed stated that endowment returns averaged 1.8% in 2020, compared to 5.3% in 2019, and compared to a target rate of 7.5%.

Last year, California State University, Bakersfield’s endowment returns were 1.51%, on par with the national average. This year, returns skyrocketed to 30.41%. The annual spend from the endowment is 4% of the value, based on a three-year rolling-average of fiscal year end market valuations.

What does that mean for CSUB? Essentially, more money to fund student scholarships and signature programs that help the university provide an outstanding education to those it serves.

An endowment portfolio is a corpus of money, designed to last forever to benefit the university and its students. This corpus is comprised of gifts, and the corresponding earnings that have been reinvested, that donors make to the CSUB Foundation. In order to ensure that these funds have the same purchasing power years from now, with inflation, the money is invested in assets that are expected to provide a return and grow over time.

According to Tony Parmisano and Todd Au of Graystone Consulting, who manage CSUB’s endowment portfolio, this year’s high returns are “positive and hopeful” for the university. But it’s also important to note that the returns will balance themselves out over time — not every year can be expected to have such high returns, as we saw during the pandemic last year.

So how does CSUB spend the returns? It is based on the original intention of the donor — and the university programs, scholarships and facilities they committed their gifts to support. CSUB has 240 active endowments, including:

The Valley Strong Fellowship Endowment, which supports a rotating fellowship for research projects related to the economic growth and prosperity of the Kern County region.
The Stiern Library Associates Endowment, primarily funded by the Cerro estate, which supports the various activities of the library.
The Marjorie Lindsey Endowment, which supports students in the Helen Hawk Honors program.
The John Brock Endowment, which supports scholarships for deserving students in the School of Business and Public Administration.
The Sheldon Endowment, which provides scholarships for CSUB transfer students from Bakersfield College.
The Wendy Wayne Nursing Endowment, which provides scholarships for outstanding nursing students.

“Donors who support endowments through the CSUB Foundation have made a lifelong investment in the university and the thousands of students we serve,” said Victor Martin, vice president for University Advancement at CSUB. “These gifts provide access to outstanding educational opportunities and enhance our ability to support research, cutting-edge programs, facilities and services that directly benefit our deserving students. The university is incredibly grateful to all of the donors who are making a positive and lasting impact on CSUB students.”