The school announced their endowment figures last week.
Notre Dame’s endowment pool returned 7.2 percent for the 2019 fiscal year, ending the year with a value of $13.8 billion compared to $13.1 billion at the prior June 30.
Over the past 20 years, the annualized return of the Notre Dame endowment pool was 10 percent, placing its long-term results in the top tier of institutional investors. Over that same period, a 60/40 index blend of stocks and bonds returned 5.5 percent. On this basis, the University’s actively managed investment program created value-added compared to the 60/40 index blend of $8.3 billion for the 20 years. Additionally, spending distributions over that period in support of the University’s mission were $4.6 billion, and grew at an annualized rate of 9.5 percent.
You can do a lot with $4.6 billion over 20 years, unless it gets taxed away.
The endowment tax, which became law on January 1, 2018, imposes a 1.4 percent excise tax on net investment income at private schools with at least 500 tuition-paying students and assets of at least $500,000 per student. Notre Dame’s $11 billion endowment qualifies, and the University estimates the tax will cost the institution about $8 million to $10 million annually — an amount, it is pointed out, that could be going toward financial aid for needy students.
About 60 percent of the $154 million that Notre Dame provides annually in financial aid is underwritten by its endowment — a percentage the University has worked hard to increase over the years. “In trying to maximize the amount of financial aid funded by the endowment,” says Andrew Paluf ’80, associate vice president and controller of the University, “having to pay this excise tax moves us in the wrong direction.”
Read more about Notre Dame’s endowment here.
Post by Marcelino Pantoja