Published October 28, 2020 by Bowdoin News

Bowdoin Endowment Critical to Financial Aid in Challenging Times

The Bowdoin College endowment, of which nearly half is permanently restricted by donors to the support of student financial aid, generated an investment return of 5.9 percent for the fiscal year that ended June 30, 2020. 

Of the total endowment distribution in 2019–2020, approximately $33 million supported financial aid, accounting for approximately three-quarters of Bowdoin’s $45-million financial aid budget in the current fiscal year. Other distributions restricted by donors are used to support professorships and instruction, lectureships, museums, the library and book purchases, and technology.   “Economic stress and job losses caused by the pandemic mean it can be even more difficult for many families to afford a Bowdoin degree, making support for financial aid from our endowment as important as ever,” said Bowdoin President Clayton Rose. “The outstanding work in these very challenging times by Chief Investment Officer and Senior Vice President for Investments Paula Volent, her talented team, and the members of our Investment Committee means that we can continue to support every student in need who has earned a spot at Bowdoin.”  Fifty-one percent of Bowdoin’s first-year class receives need-based financial aid, a percentage that is expected to grow. The average grant for all aided students—funds that do not have to be paid back—is approximately $50,000 a year.  The Bowdoin investment return of 5.9 percent compares with the median return of 1.6% percent for all college and university endowments during this period as reported by Cambridge Associates, a firm that tracks the performance of foundations and endowments nationwide.  As of June 30, 2020, the three-, five-, and ten-year annualized returns for Bowdoin’s endowment were 10.7 percent, 8.5 percent, and 11.6 percent, respectively—all in the top 5th percentile among comparative college and university annualized returns, where the respective median returns were 5.2 percent, 5.0 percent, and 7.4 percent.  On June 30, 2020, Bowdoin’s endowment was valued at $1.8 billion. During the 2019–2020 fiscal year, approximately $19.0 million in gifts and other transfers were added to the endowment. The endowment provided $71.8 million to the annual operations of the College, and because the actual cost of educating a student at Bowdoin is 36 percent higher than the comprehensive fee, the endowment subsidizes every student, not just those receiving aid.  “Bowdoin is one of only nineteen colleges and universities in America that provide need-based financial aid without required loans, and that meet a student’s full financial need for all four years. This powerful combination changes lives, but it wouldn’t be possible at Bowdoin without the generations of Bowdoin alumni, families, and friends who have helped to build our endowment and the exceptional team at the College that manages and grows these resources for the future,” said Rose.  Bowdoin’s endowment consists of more than 1,700 individual funds earmarked for the perpetual support of a variety of College initiatives. The endowment portfolio is diversified across different asset classes, including domestic and international equities, fixed income, private equity, venture capital, real estate, and absolute return strategies. All asset classes are invested through a selection of external investment managers or through market indices. The portfolio is structured with a long-term time horizon, with portfolio diversification and manager selection directed toward protecting endowment capital in challenging investment environments, while growing those assets during periods of economic stability and growth.

Of the total endowment distribution in 2019–2020, approximately $33 million supported financial aid, accounting for approximately three-quarters of Bowdoin’s $45-million financial aid budget in the current fiscal year.

Other distributions restricted by donors are used to support professorships and instruction, lectureships, museums, the library and book purchases, and technology.

“Economic stress and job losses caused by the pandemic mean it can be even more difficult for many families to afford a Bowdoin degree, making support for financial aid from our endowment as important as ever,” said Bowdoin President Clayton Rose.

“The outstanding work in these very challenging times by Chief Investment Officer and Senior Vice President for Investments Paula Volent, her talented team, and the members of our Investment Committee means that we can continue to support every student in need who has earned a spot at Bowdoin.” 

Fifty-one percent of Bowdoin’s first-year class receives need-based financial aid, a percentage that is expected to grow. The average grant for all aided students—funds that do not have to be paid back—is approximately $50,000 a year.

The Bowdoin investment return of 5.9 percent compares with the median return of 1.6% percent for all college and university endowments during this period as reported by Cambridge Associates, a firm that tracks the performance of foundations and endowments nationwide.

As of June 30, 2020, the three-, five-, and ten-year annualized returns for Bowdoin’s endowment were 10.7 percent, 8.5 percent, and 11.6 percent, respectively—all in the top 5th percentile among comparative college and university annualized returns, where the respective median returns were 5.2 percent, 5.0 percent, and 7.4 percent. 

On June 30, 2020, Bowdoin’s endowment was valued at $1.8 billion. During the 2019–2020 fiscal year, approximately $19.0 million in gifts and other transfers were added to the endowment.

The endowment provided $71.8 million to the annual operations of the College, and because the actual cost of educating a student at Bowdoin is 36 percent higher than the comprehensive fee, the endowment subsidizes every student, not just those receiving aid. 

“Bowdoin is one of only nineteen colleges and universities in America that provide need-based financial aid without required loans, and that meet a student’s full financial need for all four years. This powerful combination changes lives, but it wouldn’t be possible at Bowdoin without the generations of Bowdoin alumni, families, and friends who have helped to build our endowment and the exceptional team at the College that manages and grows these resources for the future,” said Rose. 

Bowdoin’s endowment consists of more than 1,700 individual funds earmarked for the perpetual support of a variety of College initiatives. The endowment portfolio is diversified across different asset classes, including domestic and international equities, fixed income, private equity, venture capital, real estate, and absolute return strategies.

All asset classes are invested through a selection of external investment managers or through market indices. The portfolio is structured with a long-term time horizon, with portfolio diversification and manager selection directed toward protecting endowment capital in challenging investment environments, while growing those assets during periods of economic stability and growth.