The Ball State University Foundation is investing its money in the right places.
Compared with 765 other colleges, Ball State is ranked in the top 7 percent for its average investment returns during the past three fiscal years, which start on July 1 and end on June 30. An investment return is interest received from the money the foundation invests in stocks, bonds and alternative assets.
For the university, 40 percent of investments go in stocks, 15 percent are invested in bonds and 45 percent are invested in alternative assets, said Tom Heck, foundation vice-president of operations and treasurer.
The foundation also ranked in the top 9 percent of colleges with its 14.8 percent investment return in the last fiscal year.
The foundation had a 0.7 percent return in 2003 and a 6.1 percent loss in 2002, Heck said.
Heck said even though the foundation lost money in 2002, it didn't lose as much money as the stock market did. The S&P 500, or Standard and Poor's 500 Index, made up of 500 of the largest corporations, had a 23.4 percent loss, according to the S&P's financial adviser.
David Bahlmann, Ball State University Foundation president and CEO, said the 2006 National Association of College and University Business Officers endowment study is important because it is a comparison of how well universities have done investing money. It will also allow Ball State to plan how much to invest and what to invest in during the following years. Bahlmann said past performance, however, is no indication for the future investments.
"We have to take into account our economic conditions," he said.
Heck said the foundation invests donors' money, and part of the returns goes back into donor funds while the rest goes into a general fund that provides support for the university. Consistency in good returns is important for three reasons: Donors see the foundation is managing its money wisely, significant returns demonstrate the foundation is following good investment advice and more money can be spent on the university.
The foundation provides support to the university for recruitment, scholarships, academic programs, capital building programs and more.
"For every dollar more we can earn in investments, a dollar more can be spent on university purposes," Heck said.
He said the investment committee, manager and staff are the reason why the foundations have made successful investments. The group use long-term investment strategies, which haven't changed in the past three years, he said.
The foundation also employs a professional investment firm, Hammond Associates, who advises and consults the foundation on the investments it makes.
"We're not just getting lucky," Heck said. "We're actually skilled."
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