Chapman's endowment grew 164% while Webster's fell 46%, but Webster's 55% withdrawal in 2023 reveals the real story. Raw numbers mislead without context. The standard endowment draw is 4.5-5%, so Webster's rate signals severe financial trouble.
Chapters
So let's move on, take a look at a couple of endowment values on the Private College Advanced Financial Compass. That is a tool that we're using to show comparisons, and it's the comparisons that matter, the trends that matter for colleges like yours. We can start off the raw value, and we can see, not surprisingly, based on our true demos that the endowment value is much higher in terms of raw numbers at Chapman than it is at Webster. But let's take a look at the percent change. One of the examples that suggests it's not good to look at just your data is really associated with endowment. If your endowment is up 5% over the course of the last 4 or 5 or 8 years, but the market is up 45%, you're not doing so well. And that's really what this graph represents. We can see again that our two colleges have distinct changes in their percent change of endowment value. Chapman is up 164%. Webster is down 46%. But if you look back a few years, Webster's endowment was actually up 27% in 2021. And without a comparison visual, they might have said, hey, we're doing okay. But back in 2021, the median, the mean, the average college, the growth of their endowment as I hover over that point, was 51%. Again, this is one of the factors that we share a lot in, in this training video and other media that we do. It's the comparisons with others that matter. And this is a perfect example of, for colleges maybe like yours who don't look at external comparisons, you may think a value is good, and maybe it is, or maybe you're not calculating it right, and maybe you need comparisons to be able to ask yourself and your leadership better questions about your finances. So we looked at the end of year endowment value. Let's take a look then at the appropriation. You and I call this the endowment draw. The generally accepted standard draw is somewhere in the vicinity of 4.5%, 4.5 to 5%. We can track that value, and we can see that Webster withdrew 55% of their endowment in 2023, a significant indicator of financial stress. And went down quite a bit, but still up 27%, almost 28% in 2024. As you look at this chart, you, you really don't even need me to do the analysis for you. You can see this is a college— this is our demo college, this is actual data— that had severe financial distress sometime in 2022 and 2023, and they used their endowment as the means to fund those expenses that needed to be funded. You might be able to get away with it for a year or two, but such a big draw in such a short period of time is a significant indicator of financial distress.
