Governance and Endowment Management

Key Terms to Know

• Endowment Gifts

  The lifeblood of Bucknell. An endowed gift is a monetary donation given with the intent that the funds be held in perpetuity and invested. A percentage of accumulated appreciation and income is used to support annual expenditures in areas of the University's operations budget that reflect the original purpose of the gift, such as student scholarships, professorships or educational programs, construction or maintenance of buildings, general operating expenses and more.

   

• Endowment Management

  Bucknell's strategy for investing funds from the endowment. It's built on a hybrid model, leveraging the expertise of multiple internal and external groups to provide diversity of thought and idea generation to enhance sustainable growth. This hybrid model has three components: the Investments Committee of the Board of Trustees, the Bucknell Investment Office and external resources made up of a strategic adviser and a private investment specialty firm.

   

• Endowment Performance Appraisal

  How Bucknell assesses the overall performance of the endowment. We consider three factors:

  • Absolute return: Are we achieving our long-term objectives? The primary objective is to preserve intergenerational equity (maintaining purchasing power relative to inflation and ongoing spending support to the University). This objective is measured over rolling 10-year periods in order to approximate a full market cycle. We seek a 5.5% annualized real return net of the Consumer Price Index.
  • Policy benchmark: Are we adding value through our long-term strategic allocation mix? This represents the approximate target asset mix of our portfolio across equities, fixed income and other assets such as real estate and credit. This benchmark primarily comprises public securities and may be viewed as a baseline to assess value added from various elements of the investment process, such as investment manager selection, rebalancing, and layering on additional risks such as the illiquidity of private investments in pursuit of greater returns.
  • Asset allocation return attribution: Are we adding value through near-term allocation and manager selection? This performance measurement tool is used to identify the sources of excess return against its strategic asset target allocation to understand the active investment decisions.
  • Peer institutions: Are we advancing the University's financial competitiveness? Comparing Bucknell to a list of institutions with similar goals and constraints can provide insight into the relative competitive position of the University with respect to our ability to provide financial aid and other forms of budgetary support.

   

• Endowment Spend Policy

  The portion of the endowment the University can spend each year. Annually the endowment provides dollar support toward the University's budget. Bucknell's endowment spend policy, formulated and approved by the Board of Trustees, determines the annual flow of funds from the endowment to the operating budget.

   

• Intergenerational Equity

  The theory that each generation of students has the right to at least the same level of opportunity as the students that preceded them. The endowment represents the link between the past, present and future generations of donors and students and the institution.