Endowment Radar
What role does your endowment
play in supporting your college
or university?
The Cambridge Associates Endowment Radar is a visual tool that focuses on four key metrics to assess the endowment’s contributions to the financial health of your institution and the sustainability of that role.
Find out
Endowment radar: How it works
The Endowment Radar plots four metrics on the radar chart. Each metric measures the endowment's role as a component of financial health.
Hover over each quadrant for explanation.
What Does Your Radar Look Like
Limited Role
Significant Role
Significant Role
Limited Role
When the endowment plays a significant role in supporting the budget, pricing, balance sheet, and sustainability, all four corners of the Endowment Radar are filled in.
When the endowment plays a minor role in supporting the institution, the Endowment Radar chart fills a limited area and has room for growth.
Endowment dependence
Endowment distribution to financial aid
Endowment to debt
Net flow rate
Click a quadrant to find out how your endowment supports key aspects of your institution’s business model.
Measuring the role of your endowment
Endowment dependence
(Range: 2.6% to 26.7%)
+
Endowment distribution to financial aid
(Range: 0.1 to 1.2x)
+
Endowment to debt
(Range: 1.4x to 6.9x)
+
Net flow rate
(Range: .-5.1% to -1.2%)
+
See real life examples of endowment radars from our clients.
Click to read an explanation of their charts.
Case Studies
Institution A
+
Institution B
+
Institution C
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The Endowment Radar tells us much about the role of your endowment today, but also seeds an important conversation about its future and actions that can be taken to expand that role.
Receive a free, customized endowment radar chart and discover how to maximize the success of your endowment.
Plot the future course of your endowment
Get your complimentary chart
Access the research
Ratio:
Endowment distribution
Operating expenses
measures the role of the endowment in the annual budget
Ratio:
Endowment distribution
Financial aid and scholarships
compares endowment spending to the institution’s financial aid and scholarship discounts to students
Ratio:
Endowment market value
Total outstanding debt
focuses on balance sheet health and the ballast the endowment provides for borrowing
Ratio:
Inflows minus spending
Beginning endowment market value
is the net ratio of endowment inflows to endowment spending
Your endowment’s contribution to operating health is measured by endowment dependence: the ratio of the annual endowment distribution
to the operating budget.
Endowment dependence:
Role in annual budget
What percentage of your operating budget is funded by the endowment?
Greater than 25%
10%-24%
Less than 10%
Greater than 25%
10%-24%
Less than 10%
Endowment Dependence
(Range: 2.3% to 25.2%)
Your endowment provides a moderate level of support.
Endowment Dependence
(Range: 2.3% to 25.2%)
Your endowment plays a significant role in supporting the budget. Institutions with an endowment at this level often use a spending policy that provides predictable spending and stable operations support.
Endowment Dependence
(Range: 2.3% to 25.2%)
Your endowment does not play much of a role in funding the budget. Institutions like yours may heavily depend on student revenues for supporting the operating budget.
What is the ratio of your endowment distribution to total scholarships?
The ratio of total endowment spending to total financial aid spending can be an informative way to consider the affordability of the financial aid strategy.
Endowment Distribution to Financial Aid: Role in Pricing
Greater than 75%
25%-75%
Less than 25%
Less than 25%
Your endowment likely plays a limited role in supporting pricing and affordability. Student revenues are highly competitive and can put pressure on the budget; providing more coverage from a larger endowment would contribute to sustainability of the pricing model.
25%-75%
Your endowment subsidy contributes to affordability of tuition and sustainability of the pricing model.
Greater than 75%
Endowment Distribution to finanical aid
(Range: .1 to 1.1x)
Your endowment plays a significant role in offsetting financial aid spending, therefore substantially contributing to a sustainable pricing model.
Endowment Distribution to financial aid
(Range: 0.1x to 1.1x)
Endowment Distribution to finanical aid
(Range: .1 to 1.1x)
What is the ratio of your endowment market value to your current outstanding debt?
In addition to providing annual revenue, your endowment offsets long-term liabilities and endowment capital is often a source of liquidity to support debt costs, ratings, and covenants.
Endowment to DEbt:
Role in balance sheet health
More than 4x outstanding debt
2-4x outstanding debt
Less than 2x outstanding debt
Less than 2x outstanding debt
Your endowment likely plays a minor role in your institution's balance sheet. Debt management and capacity issues can dominate your balance sheet and raise costs of borrowing; debt covenants may constrain portfolio construction.
2-4x outstanding debt
Your endowment provides moderate ballast for borrowing and contributes to your institution's balance sheet health.
More than 4x outstanding debt
Endowment to Debt
(Range: 1.1x to 5.7x)
Your endowment plays a significant role in the balance sheet. The endowment bolsters balance sheet health and supports affordable borrowing via strong debt ratings and covenant coverage.
Endowment to Debt
(Range: 1.1x to 5.7x)
Endowment to Debt
(Range: 1.1x to 5.7x)
How have additions (from gifts or other sources) to your endowment compared to spending?
Net flow measures the relationship of your endowment spending to inflows and assesses whether the combination of new gifts and additions and spending contribute to endowment growth.
Net FLow:
Role in sustainability
Minimal
About half of spending
Equals or exceeds spending
Minimal
Your institution's net flow is dominated by spending outflows. When spending dwarfs additions, endowment growth is only attainable when investment performance exceeds spending and inflation. The role of the endowment is likely shrinking over time. Your insitution may consider focusing on funding, directing some excess operating cash to the porfolio, and/or decreasing spending.
About half of spending
Your institution is likely able to keep pace with enterprise growth and supporting the budget.
Equals or exceeds spending
Net Flow Rate
(Range: -4.7% to -1.9%)
Your institution can support additional programs and enterprise growth. New gifts to the endowment enable the portfolio to support a growing enterprise.
Net Flow Rate
(Range: .-4.7% to -1.9%)
Net Flow Rate
(Range: .-4.7% to -1.9%)
Find out
What Does Your Radar Look Like
Get your complimentary chart
Access the research
Institution C
The endowment plays a significant role at this institution, serving as the single largest revenue source that more than offsets financial aid spending.
The endowment also meaningfully supports the balance sheet, improving the institution’s access to capital markets. This role is likely to persist as the net flow rate is sustainable at close to -1%.
Endowment plays significant role
Endowment dependence
(Range: 2.6% to 26.7%)
28%
Endowment distribution to financial aid
(Range: 0.1 to 1.2x)
1.5X
Endowment to debt
(Range: 1.4x to 6.9x)
5.7x
Net flow rate
(Range: .-5.1% to -1.2%)
-1.2%
The endowment currently plays a limited role at this institution, providing spending that makes up approximately 2% of the budget and offsets little of financial aid.
The portfolio’s role in the balance sheet is limited, possibly constraining the institution’s ability to access capital markets further. However, the very strong net flow rate in 2020 will allow the endowment to take on more of a role going forward.
Endowment plays limited role
Institution A
Endowment dependence
(Range: 2.6% to 26.7%)
3.1%
Endowment distribution to financial aid
(Range: 0.1 to 1.2x)
0.2X
Endowment to debt
(Range: 1.4x to 6.9x)
1.1x
Net flow rate
(Range: .-5.1% to -1.2%)
-1.2%
The endowment plays a moderate role at this institution with spending that supports a sizable portion of the budget, but offsets less than one third of financial aid spending.
The endowment is 3.5 times the size of the current debt portfolio, providing modest ballast for the balance sheet. The net flow rate of close to -3% suggests that this role is likely to persist or possibly decrease gradually over time as the budget grows.
Endowment plays Moderate Role
Institution B
Endowment dependence
(Range: 2.6% to 26.7%)
13.4%
Endowment distribution to financial aid
(Range: 0.1 to 1.2x)
0.3X
Endowment to debt
(Range: 1.4x to 6.9x)
3.5x
Net flow rate
(Range: .-5.1% to -1.2%)
-2.8%
Scroll to the bottom to get a complimentary endowment radar chart and explanation that's created for your insitution.
Endowment dependence
(Range: 2.3% to 25.2%)
Endowment dependence
(Range: 2.3% to 25.2%)
Endowment dependence
(Range: 2.3% to 25.2%)
Endowment distribution to financial aid
(Range: .1 to 1.1x)
Endowment distribution to financial aid
(Range: 0.1 to 1.1x)
Endowment distribution to financial aid
(Range: 0.1 to 1.1x)
Endowment to debt
(Range: 1.1x to 5.7x)
Endowment to debt
(Range: 1.1x to 5.7x)
Endowment to debt
(Range: 1.1x to 5.7x)
Net flow rate
(Range: .-4.7% to -1.9%)
Net flow rate
(Range: .-4.7% to -1.9%)
Net flow rate
(Range: .-4.7% to -1.9%)
Endowment dependence
Endowment distribution to financial aid
Endowment to debt
Net flow rate
Endowment dependence
Endowment distribution to financial aid
Endowment to debt
Net flow rate
Endowment dependence
(Range: 2.3% to 25.2%)
Endowment dependence
(Range: 2.3% to 25.2%)
Endowment dependence
(Range: 2.3% to 25.2%)
Endowment distribution to financial aid
(Range: 0.1 to 1.1x)
Endowment to debt
(Range: 1.1x to 5.7x)
Net flow rate
(Range: .-4.7% to -1.9%)
10%-
24%
Greater than 25%
10%-
24%
Less than 10%
Greater than 75%
25%-
75%
Less than 25%
Greater than 75%
25%-
75%
Less than 25%
More than 4x outstanding debt
2-4x
outstanding debt
Less than 2x outstanding debt
More than 4x outstanding debt
2-4
outstanding debt
Less than 2x outstanding debt
Equals or exceeds spending
About half of spending
Minimal
Equals or exceeds spending
About half of spending
Minimal
Endowment distribution to financial aid
(Range: 0.1 to 1.1x)
Endowment distribution to financial aid
(Range: 0.1 to 1.1x)
Endowment to debt
(Range: 1.1x to 5.7x)
Endowment to debt
(Range: 1.1x to 5.7x)
Net flow rate
(Range: .-4.7% to -1.9%)
Net flow rate
(Range: .-4.7% to -1.9%)
