How The Chronicle’s Survey of Nonprofit Endowments Was Conducted

The Chronicle’s sixth annual survey on endowments at the country’s biggest foundations, universities, and other nonprofit organizations, includes data from 229 institutions.

The endowments included in the results were altogether worth more than $381-billion at the end of their 2008 fiscal years. The median return for the endowments in 2008 was minus-6 percent, meaning half the groups achieved better returns, and half worse.

The effects of the financial crunch in the fall were clear in the findings. The median return for groups with fiscal years ending in December 2008 was minus-24.6 percent, while those whose fiscal years ended in September or earlier in 2008 reported a median return of minus-2.1 percent. The Chronicle requested updated information about the endowments’ market values, as well as investment returns, as of early April.

More than 100 organizations provided midyear estimates of their endowment market values, but many others could not. Several groups with the largest endowments (including Harvard, Yale, and Stanford Universities) said they don’t release midyear estimates.

Therefore, determining the largest endowment in the country in 2009 is tricky. At the close of their 2008 fiscal years last June and December, respectively, Harvard outranked the Bill & Melinda Gates Foundation, in Seattle, for the first time in several years, with an endowment of $36.9-billion compared with Gates’s $29.7-billion. By the end of February, Gates’s endowment had fallen to $26.1-billion.

Harvard’s president told the university’s deans in a letter late last year that the university’s endowment could lose as much as 30 percent of its value by the end of June, The Harvard Crimson reported. A 30-percent drop in its endowment from the 2008 value would put it at around $26-billion — in other words, tied with Gates.

The survey attempted to include all nonprofit endowments of at least $5-million, and questionnaires were sent to more than 430 organizations. The value of endowments on this year’s list (more than $381-billion in 2008) is comparable to the value of nearly 3 percent of the 2008 gross domestic product of the United States. It is greater than the 2008 gross domestic product of Thailand and Vietnam combined.

Until 2009, organizations were not required by law to disclose information about their endowment values or returns, or how they invest or use their endowment assets. Starting this year, the revised Internal Revenue Service Form 990 (the informational tax return all nonprofit organizations file annually) began to collect data on endowments. When all of the biggest nonprofit organizations are filing the new annual form (in 2010), The Chronicle expects such standard information to provide a more well-rounded picture of endowment data.

Several endowments grew in 2008 or 2009 thanks to gifts. They included Marine Toys for Tots Foundation, in Triangle, Va., which liquidated a $15-million stock gift and transferred it to its endowment in 2008; Young Life, in Colorado Springs, which received a $30-million gift for camp construction in December; and the Skoll Foundation, in Palo Alto, Calif., which has received nearly $80-million from its founder, Jeff Skoll, since the close of its 2008 fiscal year last June. The Chronicle’s full data set for the 2007 and 2008 fiscal-year periods is online in an interactive database, at http://philanthropy.com/extras.

The survey on endowments was conducted by Noelle Barton and Candie Jones, with assistance from Maria Di Mento.