The Hamilton endowment is comprised of gifts and the subsequent growth of these assets due to superb investment strategies over the long term, income from which provides a permanent source of financial support for the College. It is the College’s largest financial asset, and generates income for its mission of providing an accessible, distinctive, quality liberal arts education for talented students regardless of family background or economic means. Our endowment includes over 1,000 individual funds, with nearly half designated for student financial aid. Many others also support faculty salaries, research programs, student internships and career related experiences, lectures, pedagogical innovation, the physical plant and other College priorities. Since the College’s founding more than 200 years ago, hundreds of donors have established endowed funds to ensure Hamilton’s future.
The endowment functions as a unitized pool. Each endowed fund owns shares defined as units of the endowment. The market value per share is calculated monthly. As new gifts are added to the endowment, shares are purchased based on the market value at the end of the month. “Income,” defined as the endowment draw in the Spending Policy below, is distributed to each endowed fund based on the number of units held as of the beginning of the fiscal year on July 1. Income is allocated to new endowed funds in the fiscal year following receipt.
Thanks to the generosity of generations of Hamilton alumni, parents, and friends, the College’s endowment and planned gift assets stood at approximately $1.33 billion as of June 30, 2022.
Hamilton depends on endowed funds, which generate income year after year, to provide fiscal stability over the long term. Our endowment enables Hamilton to remain a college of opportunity – to attract, enroll and support the most qualified students regardless of their family’s financial means. It also allows us to recruit and retain the best teacher-scholars to our faculty, ensuring the continual strengthening of our distinctive liberal arts mission.
About 20% of the College’s annual operating expenses, including a substantial part of the financial aid budget, is supported by the endowment. The remaining 80% of the annual operating budget is met largely by tuition revenue and fundraising. Income drawn from the endowment is used according to the instructions of donors as stipulated in formal written agreements and verified by auditors, for the following purposes: (incl. chart)
The College endowment falls roughly in the middle of the pack among selected peers. See chart below.
Hamilton's annual compound return on its entire endowment pool has consistently ranked in the top quartile of all colleges and universities nationally.
Hamilton’s endowment is managed by the College’s Chief Investment Officer, Lauren Jacobsen, who is based in Manhattan. The Investment Committee of the Board of Trustees provides ongoing counsel. The Investment Committee is a select group of board members (outside experts also occasionally serve) who are willing and able to devote significant time to the committee’s important work, have varied and complementary expertise, have experienced several market cycles, avoid conflicts of interest, and proactively plan for succession.
The College invests its assets in a prudent manner to achieve a long-term rate of return sufficient to fund a portion of its annual spending and to increase investment value after inflation. The College’s investment strategy incorporates a diversified asset allocation approach with exposure to domestic and international equity, fixed income, real estate, commodities, hedge funds, and private equity markets based on targets defined by the Investment Committee of the Board of Trustees. As a perpetual institution, it is our fiduciary duty to manage the endowment to support the educational mission of the College and to preserve equity among generations.
Yes. The Investment Office incorporates ESG factors into the evaluation of investment managers and Hamilton’s full Investor Responsibility Policy can be found here. The goal of this policy and the focus on ESG factors are not intended to result in the exclusion of specific investments on the basis of any single factor alone, but as an aid in improving the long-term performance of the endowment. The Investment Committee will continue to exercise care in the oversight of our endowment, to consider ESG factors in our investment process, to encourage its managers to do the same, and to support the College’s ongoing efforts to steward our environment thoughtfully and responsibly.
Fossil fuel investments have not played a significant role for the endowment in many years. In fact, the endowment has not made an investment in fossil fuels during the past eight years. As of fiscal year end 2023, the endowment has less than 2 percent direct exposure to fossil fuels, substantially below most college and university endowments. The remaining direct fossil fuel exposure in the endowment today resides in legacy private investments made prior to 2009 that will liquidate over time.
Implemented in fiscal 2009, our endowment spending policy is a common industry practice known as the “mixed rule.” The formula uses 70% of last year’s spending plus inflation (HEPI*), plus 5% of the average market value of the prior four quarters of the endowment weighted at 30%. The endowment draw for fiscal 2022 was approximately $47.9 million, 4.76% of the trailing 12-quarter average market value of the endowment. The amount allocated to each endowment is the ratio of units “owned” by each fund in the endowment pool multiplied by the annual endowment draw. Contact Karen Leach, Vice President of Finance and Administration, if further explanation is desired. *HEPI – the Higher Education Price Index, HEPI is a more accurate indicator of changes in costs for colleges and universities than the more familiar Consumer Price Index.
Governed by a legally binding endowment agreement, your investment in Hamilton will be used solely for the purpose(s) approved by you and the College. We pride ourselves on superb stewardship of all endowed funds and are committed to transparency through annual audits and by directly reporting to donors as outlined in the endowment agreement.
Since most of the funds that comprise the Hamilton endowment are restricted by donors for particular purposes, like financial aid or faculty salaries, the College cannot spend down the endowment like a bank account, even if needed for legitimate priorities. The endowment must also provide financial stability over the very long term, for hundreds of years into the future.
Most gifts from individuals to Hamilton each year are under $500 and are made through the Annual Fund. These unrestricted gifts, made by thousands of alumni, parents and friends, are allocated to three of the College’s top priorities: 70% of the total raised supports the financial aid budget, 20% supports the work of the Career and Life Outcomes Center, and 10% helps to underwrite the teaching of writing and speaking. The millions donated through annual giving complements the income generated by the endowment, enabling us to provide the “special touches” that make the Hamilton experience second to none. That said, gifts to the endowment secure the future of the College, ensuring that access to all that Hamilton has to offer remains open to every qualified student regardless of their family’s economic means.
Donors can provide the capital necessary to establish endowed funds at Hamilton through outright gifts of cash, through transfer of stocks or appreciated securities, through gifts of real estate or real property such as important works of art, and by naming the College as a beneficiary of a will, trust, insurance policy or other retirement asset. While donations may be made at any time and for any amount to the general endowment, the minimum for establishing a “named” fund, one which will bear the name of the donor’s choosing, is as follows: see chart below.
No. Donors may pledge to make payments for up to five years to fully fund an endowment, though income from such funds will not be available for the designated purpose until the fund is complete.
Yes. Naming a fund in honor of a family member, beloved faculty member or coach, a friend, or yourself provides a personal connection for the recipient of your generosity. Naming a fund also enables the College to share your story and celebrate your legacy with future generations of Hamiltonians.
Yes. You and/or others can make additional gifts to add to the principal or “book” value of your endowment at any time. These additions are often made to commemorate an anniversary, a birthday, a retirement, or other life events. You may also add to your endowment through provisions in your will or other estate plans.
We encourage those who wish to make a contribution to the endowment through their will to document and share their intentions with the College, including a dollar amount if possible and the preferred purpose for which income is to be used. This not only prevents misunderstandings and legal complications, but ensures that your wishes will be honored and that future generations will continue to be blessed by your generosity.
How does Hamilton’s endowment measure up with its liberal arts peers?
The College endowment falls roughly in the middle of the pack among selected peers.
Rank
Institution
Endowment Market Value
($000s) 6/30/2021
1
Williams
4,170,895
2
Amherst
3,775,153
3
Wellesley
3,236,785
4
Pomona
3,035,208
5
Grinnell
2,931,550
6
Swarthmore
2,899,311
7
Bowdoin
2,719,628
8
Smith
2,559,083
9
Washington & Lee
2,092,420
10
Wesleyan
1,572,651
11
Middlebury
1,511,001
12
Hamilton
1,399,289
13
Vassar
1,378,988
14
Davidson
1,341,387
15
Oberlin
1,296,962
16
Colgate
1,263,077
17
Colby
1,257,738
18
Claremont McKenna
1,222,151
19
Carleton
1,157,982
20
Lafayette
1,063,747
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