Words from Waller
Dear Bearcats,
The wealth of a university is measured in many ways: the talent of its faculty and staff, the beauty of its campus, the equipment in its studios and laboratories, the impact of its alumni. But for many journalists and politicians, it all boils down to a single number. “Harvard’s endowment soars to $53 billion!” shouts the headline. Although not on the same level as the Ivy League schools, Willamette’s endowment is very healthy: at the end of our last fiscal year, Willamette’s endowment stood at $347 million, an increase of $100 million from the year before. Willamette has the second largest endowment on a per-student basis of any Oregon college or university, after only Reed College.
Wealth and character are two very different things, of course, and far more important than the size of Willamette’s endowment is how the income generated by our investments is spent. Some endowment funds are restricted in purpose, used for everything from support of Willamette Academy to purchases of art for the Hallie Ford Museum. But at Willamette, most of the $14 million or so spent from endowment returns in recent years has been spent on financial aid, in support of the Board of Trustees’ goal of opening the institution’s doors as widely as possible to talented students regardless of means. 
Many universities far wealthier than Willamette have chosen to spend their wealth in other ways, often reinforcing rather than breaking down class privilege. Twenty-eight percent of Salem campus undergraduates at Willamette have family incomes low enough to qualify them for federal Pell grants compared to just sixteen percent of students in the Ivy League. At a time when college education is more important than it has ever been in driving economic mobility, we can all be proud that Willamette has made that choice.
Historically, many college and university boards themselves bought and sold stocks and bonds and other investments, but today Willamette’s board uses an outside firm – Global Endowment Management (GEM) – to oversee its investment portfolio. In addition to reducing costs and expanding investment options by pooling the funds of multiple organizations, GEM’s record keeping has allowed us to track and annually report on various environmental, social, and governance (ESG) factors in the companies in which we invest.
An example of interest to many has been what fraction of our funds are invested in companies that own or extract fossil fuels. This was once a big part of many endowments, but over time concerns about global warming, the relatively poor performance of this sector, and the decreased value of commodities as a hedge against inflation have all led to reduced investments: in 2020 less than 2% of Willamette’s endowment was invested in fossil fuel companies.
Working with us and their other clients, GEM developed new investment strategies that could fully divest from these companies and, importantly, they showed that their divested portfolio had slightly higher historical returns than their standard portfolio. On January 1 of this year, Willamette’s endowment was moved to GEM’s new portfolio, which does not include fossil fuel investments.
There is, then, much to celebrate about the endowment, whether it is the historic returns that are making financial aid more available and Willamette more accessible to more students, or the creative investment management team that has helped align equity and ESG considerations with the board’s fiduciary goals.
I want to celebrate and thank the generations of alumni and other donors whose legacy gifts to Willamette’s endowment continue to change and improve the lives of today’s students. Because of their support, Willamette has a healthy endowment and a solid foundation to not only maintain its status as one of the Northwest’s leading private universities, but to grow and expand with new schools, new programs, and new opportunities that respond to the evolving needs and interests of students and prepare them to address complex regional and global challenges.
Non nobis solum nati sumus,
Steve