Date of Award
5-2024
Culminating Project Type
Dissertation
Styleguide
apa
Degree Name
Higher Education Administration: Ed.D.
Department
Educational Administration and Higher Education
College
School of Education
First Advisor
McCullar, Steven
Second Advisor
Ikegwuonu, Chukwuemeka
Third Advisor
Benson Jones, Jennifer
Fourth Advisor
Linde, Nicholas
Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.
Keywords and Subject Headings
endowment, spending allocation, investment strategy
Abstract
The aim of this study was to determine the optimal spending allocation and investment portfolio strategies that could provide a consistent source of alternative revenue through endowment funds while growing value for private 4-year higher education institutions. By assessing institutional endowment management through alignment of long-term investment strategies and spending allocation plans, institutions can optimize strategic endeavors and minimize risk (Suttles & Snyder, 2023). Many higher education institutions use a simplistic approach to calculating their spending allocation (i.e., moving average) and little attention is given to analyzing various strategies, both spending allocation and investment philosophy, to unleash the true power of the perpetual nature of endowment funds. Through modeling different investment portfolio strategies and spending allocation methodologies for 27 private 4-year higher education institutions in the Higher Education Price Index West North Central region from 2000 to 2022, this quantitative research study determined the optimal endowment pool investment strategy and spending allocation methodology that maintained or increased purchasing power and maximized investment performance overall in the long term. The Friedman’s two-way analysis of variance by ranks with planned post hoc comparisons indicated investment strategies (i.e., weighing equity securities and fixed-income compositions) with the more aggressive composition toward equities provided the largest significant growth in the overall endowment value. Further analysis indicated the spending allocation model that provided the most consistent allocation allotment over the period modeled was a moving average that took a longer time horizon into account.
Recommended Citation
Constantineau Ries, Tressa, "Not so Hidden Secret of Endowment Growth" (2024). Culminating Projects in Higher Education Administration. 86.
https://repository.stcloudstate.edu/hied_etds/86
Comments/Acknowledgements
This dissertation would not have been possible without the guidance and the help of several individuals who, in one way or another, contributed and extended their considerable expertise in the preparation and completion of this study. I have many supporters and I would like to take the opportunity to thank them for their encouragement throughout this process.
First, I would like to express my deepest appreciation to Dr. Steven McCullar, my advisor and chair of my committee, for his invaluable wisdom and feedback. I could not have undertaken this journey without my defense committee, Dr. Jennifer Benson Jones, Dr. Chukwuemeka A. Ikegwuonu, and Dr. Nicholas Linde, who generously provided knowledge and expertise.
I would like to extend special appreciation to Jeanne Forneris, JD, for her thoughtful leadership on both the Audit & Finance and Investment Committees at Mitchell Hamline School of Law, which sparked my interest in leveraging the financial and strategic use of endowment funds, and to Patrick Hager, CFA, who provided guidance related to various investment and spending strategies. I am also thankful for the support of the president and dean, and other institutional leadership, for their continued advice and suggestions.
Lastly, I would be remiss in not mentioning my family. To my husband, Dennis, who kept my spirits and motivation high during this process. To my children, Logan and Teagan, for supporting and understanding my higher education pursuits. To my parents, for always challenging me to be my best self. Finally, to my twin, Stacy, for her continued encouragement.