Denison’s endowment plays a vital role in the financial stability and growth of the institution. The endowment provides a permanent source of revenue, with annual endowment distributions comprising 30% of the college’s annual operating budget. This support is vital for Denison’s mission of offering a life-shaping education and meeting the full demonstrated financial need of every admitted student, a robust commitment to access and affordability that Denison has undertaken along with fewer than 100 other colleges and universities nationally.
The endowment’s growth, from $92 million in 1992 to over $1 billion today, has been achieved through strategic investment and the generous support of Denison’s donors and has generated an annualized return of approximately 9.7% since 1992.
Denison’s Board of Trustees serves as legal fiduciaries of the college and its endowment. Their primary responsibility regarding the endowment is to maximize long-term risk-adjusted returns to provide the financial support the college needs to carry out its mission now and in the future. The Investment Office, with the guidance of the Board Investment Committee, manages the endowment within a policy framework designed to meet or exceed annual spending objectives plus inflation over the long term.
Denison’s investment strategy focuses on diversification across asset classes and maintaining relationships with exceptional and ethical independent investment managers, who often oversee commingled funds with a finite group of institutional investors; the Investment Office does not select individual stocks or bonds. Ensuring the value and growth of the endowment through the careful selection of external partners and fund managers is complex and highly competitive work. The confidentiality of investment holdings protects the investment managers’ and their portfolio companies’ competitive market positioning, and for that reason, Denison is typically subject to confidentiality obligations under the terms of its investment agreements. Comprehensive information about the endowment portfolio is reviewed regularly by the Board Investment Committee, including Denison’s president and the chair of the Board of Trustees as ex officio members.
The endowment’s long-term focus also means that endowment managers diligently consider a wide range of factors to maximize risk-adjusted financial returns, which includes assessing opportunities and risks associated with a range of responsible investment considerations. This approach ensures that investments are evaluated comprehensively, taking into account not only current financial metrics but also other variables that could impact performance and resilience, aligning with our primary fiduciary duty to grow and protect the endowment for future generations.
Denison recognizes that members of our community may hold passionate views on various social and political issues, and some have called for divestment from certain industries, activities, or geographies. However, the endowment is not a tool to further specific political or social positions. Divestment requests often involve matters on which reasonable people may disagree, and taking a side would be inconsistent with Denison’s core educational mission and commitment to encouraging respectful debate. Divestment also poses significant challenges to the legally required prudent management of the endowment. Endowment assets are held in commingled funds managed by external managers who typically cannot accommodate investor-specific divestment demands without potentially hindering overall performance. Divesting can also limit Denison’s ability to maintain a diversified portfolio and meet long-term investment objectives, and there are certain legal prohibitions against boycotts and divestments, further constraining Denison’s ability to accommodate divestment requests.
As stewards of Denison’s endowment, the Board of Trustees and Investment Office remain dedicated to ensuring that Denison’s investments support the university’s mission in perpetuity. By adhering to sound fiduciary principles and maintaining a long-term perspective, we can continue to provide the financial foundation necessary for Denison to fulfill its commitment to students, both now and in the future.