By Mark Sullivan
Boston College reached a significant financial milestone recently when it broke the $1 billion mark in endowment, underscoring the Universityís emergence as a national institution over the course of a generation.
BC closed out the 1999 calendar
year with $1.009 billion in endowment, a figure which places it among some
of the elite US colleges and universities, according to Financial Vice
President and Treasurer Peter McKenzie.
When the most recent nationwide statistics on endowments were compiled last June, Boston Collegeís endowment - which stood then at $908 million - was the 37th largest. The top three endowments were: Harvard University, with $14.3 billion; University of Texas, $8.1 billion; and Yale University, $7.2 billion. Others in the top 40 included the University of Notre Dame, whose $2 billion endowment was 18th largest; Dartmouth College, $1.7 billion (20th); and Brown University, $1.2 billion (29th).
The strength of the Universityís endowment is important because earnings help keep tuition stable while providing dollars for financial aid, faculty salaries and top-quality academic resources, McKenzie said.
"If weíre going to compete with the best schools, we need the financial resources,"said McKenzie, who estimated Boston Collegeís annual operating expenses at $450 million, about 10 percent of which is met by earnings on the endowment.
"The more we can use earnings on our savings to support operations such as faculty salaries, financial aid, library books and technology, the less we have to increase tuition," he said.
Financial Vice President and Treasurer Peter McKenzie (right) and Undergraduate Admission Director John Mahoney, whose office has seen an unprecedented level of applications for this fall's freshman class.
Boston College each year typically spends investment earnings totaling 4 percent of the value of its endowment, McKenzie said, which means that every $100 million increase in endowment translates into $4 million in extra spending money for the school.
The $1 billion benchmark is all the more noteworthy considering that Boston College faced bankruptcy in the early 1970s, when the value of the BC endowment was only about $5 million, McKenzie said.
Over the past two decades, the endowment has grown annually at a rate of between 18 and 22 percent, said McKenzie, who reported Boston College received $24 million in new gifts and earned roughly $200 million on its investment portfolio during the 1999 calendar year.
"Investment returns and gifts are helping fund new initiatives in a way we couldnít 15 years ago," he said. "But if weíre going to compete with other top colleges and universities for better faculty and students, we canít rely just on tuition dollars but must grow the endowment."
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