Another gift

[roper1313]

UND (based on what I've read) tries to get 4% annual, spendable return on endowments.

Returns above that are put back in to the endowment to grow the principle amount.

For example: $4 million.

If you get 4% you'll have $160 thousand to spend annually. But what you really want is a higher return, for example 6% (I'd like 12% but why be that greedy in an example). That'd get you the 4% for the annual operations and the other 2% ($80k) to put back into the kitty ($4.080 million to start at next year).

12% might be a little greedy. You forgot to include inflation in your calculation. CPI averages around 4% (lets not even talk about higher ed inflation) then you only have 2% to play with. IMO, these large endowment funds are invested fairly conservatively, maybe to a fault. My guess is that their goal is 8% with anything more being great and anything less than 7% being unacceptable. i.e. assets managers loosing their jobs. I have lunch with some members of the UND foundation about 6 times a year, I'll have to pick their brain a little on this.

Thank you to the Engelstad Family, IMO, this is just the beginning. When Betty passes on, hopefully in many years, I foresee the Engelstad Family Trust giving a bulk of its assets to UND. That number will probably in the hundreds of millions of dollars.

[The Sicatoka]

12% might be a little greedy.

Then I'm glad I didn't write "15%".

[star2city]

Endowments Celebrate a Streak

The largest endowments earned the best returns, allowing the wealthiest of colleges to put even more distance between themselves and the rest of the pack.

Those endowments worth more than $1-billion had an average annual return of 15.2 percent in the 2006 fiscal year. For endowments worth less than $25-million, the average investment return was only about half as good, 7.8 percent.

2006 returns

Endowments by size

More than $1-billion +15.2%

$501-million to $1-billion +12.8%

$101-million to $500-million +11.9%

$51-million to $100-million +10.0%

$26-million to $50-million +9.3%

$25-million or less +7.8%

All +10.7%

The largest college endowments, because they wield so much money and have more expertise, become aware of better deals. The larger staffs and sophistication of the largest endowments, or the money managers they hire, eventually make the difference, he said.

"You have market knowledge, and you are known to sellers," said Mr. Hammond. "Those two things make it possible to make the good returns."

For example, he said, it is very expensive for a college to have in-house expertise in real-estate investing. Once it is established, however, those endowments that have the expertise will get access to deals through the connections made by their employees. Smaller endowments generally never hear about those deals because they cannot afford to have employees committed solely to investing in real estate.

PERFORMANCE OF COLLEGE ENDOWMENTS

Average returns, 1996-2006

1996 17.3%

1997 20.7%

1998 18.0%

1999 11.0%

2000 13.0%

2001 -3.6%

2002 -6.0%

2003 3.0%

2004 15.1%

2005 9.3%

2006 10.7%

[roper1313]

Not only are the larger funds more sophisticated they also have more money that they can invest in riskier ventures. Where a college/university with less funds can't afford to risk their principle. Also don't forget that 2006 was a great year for the markets. It didn't take a sophisticated investor to make money last year.

[Rick]

The largest endowments earned the best returns, allowing the wealthiest of colleges to put even more distance between themselves and the rest of the pack.

Those endowments worth more than $1-billion had an average annual return of 15.2 percent in the 2006 fiscal year. For endowments worth less than $25-million, the average investment return was only about half as good, 7.8 percent.

2006 returns

Endowments by size

More than $1-billion +15.2%

$501-million to $1-billion +12.8%

$101-million to $500-million +11.9%

$51-million to $100-million +10.0%

$26-million to $50-million +9.3%

$25-million or less +7.8%

All +10.7%

The largest college endowments, because they wield so much money and have more expertise, become aware of better deals. The larger staffs and sophistication of the largest endowments, or the money managers they hire, eventually make the difference, he said.

Looks like Erwin Martens should have gotten us +15.2% last year, so The Sicatoka is being a little conservative.

[star2city]

Wow, a tribute to the Engelstad family from the Fargo Forum:

[url=http://www.in-forum.com/Opinion/articles/165188]Forum Editorial: Engelstad

[star2city]

Engelstad Family Foundation keeps the tap open: College of Southern Nevada announces $8.2 millino gift

Officials say the money will pay for a 10-thousand square-foot expansion of the health sciences building now known as Building K. It'll be renamed the Ralph and Betty Engelstad School of Health

Sciences to honor Ralph Engelstad, the late owner of the Imperial Palace hotel and casino. He died of lung cancer in 2002

[star2city]

Las Vegas Review-Journal: Faith, humility sustain generous heart of Engelstad Family Foundation

In a community built by larger-than-life characters and glorified carnival barkers, this is the quietest big story I've written in a long time.

Between sips at Starbucks, Kris Engelstad McGarry politely tells me I won't be interviewing the inspiring woman behind the Engelstad Family Foundation. Not today. Or, I suspect, on any other day.

The devoted daughter explains that Betty Engelstad is as shy and unassuming as she is thoughtful and generous. And that is saying quite a lot.

I might run into Betty one morning at a local Catholic church, McGarry says, sensing morning Mass isn't on my regular circuit.

But her mother wouldn't dream of talking to a reporter or basking in praise for the foundation's increasingly generous gifts to Southern Nevada. It's just not part of the North Dakota native's character.

The contractor and casino man also was one of the largest real estate owners in the United States. Before he died, he set in motion a plan to create a foundation that would pour his family's formidable assets back into the communities they call home.

The foundation, with more than $500 million in assets, already has donated more than $200 million in less than six years. That includes more than $80 million in donations and commitments in Southern Nevada.

Betty worked in a bank as a young woman. With her husband, she spent almost every day of her adult life working within a budget. The Engelstad family wasn't penurious, just prudent.

Now the money flows out even faster than it came in.

"She never thought in a million years she'd leave Grand Forks, North Dakota, and not work, and find herself giving money away -- let alone this kind of money," McGarry says.

"She loves the stories, but she's really uncomfortable with people thanking her in person," McGarry says. "I don't think she knows what to do with gratitude."

McGarry stands in her mother's place and is unabashedly elated to watch the foundation change lives and help the community grow in the right direction.

"I have the greatest job ever," she says. "I give away hope. There's no greater job on Earth."

[gfhockey]

So it looks like we may receive more?

[star2city]

So it looks like we may receive more?

Thought article offered an insight into Betty Engelstad's and Kris McGarry's personalities. Since UND athletics has already received so extravagantly, just thankful for what has already been given.