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MSU's endowment fund grew by more than half a billion dollars last year

Posted at 8:25 AM, Nov 11, 2021

EAST LANSING, Mich. — Michigan State University's endowment fund jumped by half a billion dollars over the last fiscal year.

The endowment is an investment fund set up to support scholarships, research and other university activites. At the end of the 2020 fiscal year, MSU's endowment was worth $3.4 billion. By the end of the 2021 fiscal year this past July it had hit $3.9 billion.

“That is in part because of the stock market success that we saw last year," said MSU Spokesperson Dan Olsen.

Olsen said universities are seeing similar returns across the nation.

The University of Michigan's endowment was valued at $12.5 billion at the end of 2020's fiscal year and grew to $17 billion at the end of 2021's fiscal year.

Olsen said university officials are pleased with MSU's endowment increase compared to schools like U of M.

“We're pretty on par with how performance of other institutions had been doing," Olsen said. "But also some other private investors also experienced some of those same returns.”

The endowments rate of return also grew from 5.1 percent in 2020 to nearly 42 percent in 2021, though some of those gains won't be realized until the investments are sold, Olsen said.

Despite the success of the fund this year, the university won't be spending a greater share of the money on university programs or scholarships. MSU will keep their standard 4.4 percent spending rate.

Olsen said that spending limit allows the university to preserve the endowment's value and use the funds for their intended purpose which is decided by the donor.

“The growth of that endowment fund allows us to not only keep up with inflationary costs, but also to support more of our scholarships and academic programs as specified by the donors in those contracts,” Olsen said.

According to MSU's endowment website, finds are typically spent on seven different categories with the biggest amounts going to private investments and global equities.

A decade ago, MSU's endowment was worth just $1.7 billion, but has grown through aggressive fundraising and investment returns.