The Little Endowment that (Finally) Could

Today, Kenyon's endowment is worth a respectable $166 million. Recent striking successes-three years of returns exceeding 13 percent, for example, and a ten-year average of more than 11 percent-can be credited to the acumen of Kenyon's investment committee, which skillfully steers the College's portfolio through sometimes choppy financial waters.

The sailing hasn't always been smooth. Historically, Kenyon's endowment has had to overcome significant obstacles, from the limitations inherent in a small alumni base, to the need for directing funds into the College's physical plant, to the costs associated with working a seismic change in the student body.

Seed Money

The best way to make a lot of money is to have a lot of money to start. Peer institutions that possess much larger endowments than Kenyon include not only older Eastern colleges (which got a head start) but also institutions that benefited from endowment-fattening mega-gifts or lucky breaks. A good example is Grinnell College, which, on the advice of an alumnus and trustee, Joseph F. Rosenfield, invested early in a semiconductor company founded by another alumnus, Robert N. Noyce. That company later became Intel.

A friend of Rosenfield's by the name of Warren E. Buffett, meanwhile, suggested that Grinnell acquire a commercial television station. The college bought the station for nearly $13 million, then sold it five years later for $49 million. Grinnell is now the richest liberal-arts college in the nation, with an endowment of about $1.4 billion.

Creating Something out of Nothing

Since 1828, when Philander Chase's fledgling college moved to the hilltop site that would become Gambier, the campus has evolved from a handful of humble log cabins and thin-walled frame houses to fifty academic, residential, and administrative buildings, including state-of-the-art new facilities for music, science, and athletics. This essential investment in the physical plant, however, slowed the growth of the endowment.

The pattern started with Chase himself, who intended to use Kenyon's founding gifts-some $30,000 from English benefactors-for endowment and scholarships as well as equipment. But because American generosity never matched Chase's expectations, he used most of the English money to buy land for the College and struggled throughout his presidency to raise money for buildings.

Kenyon's longest-serving president, William Foster Peirce, was a tireless fundraiser who transformed the College during his forty-one-year tenure. He tried diligently to enlarge the endowment-and it did grow significantly-but during his presidency, 1896 to 1937, gifts went primarily toward campus development. Hanna, Leonard, Samuel Mather, Ransom, and Peirce halls all date from this period, as does Cromwell Cottage.

Kenyon earned a reputation for academic excellence and emerged as a literary center under President Gordon Keith Chalmers, but the endowment didn't fare as well. After the devastating Old Kenyon fire in 1949, the College learned that insurance would cover only $200,000 of the $800,000 needed for rebuilding, so Chalmers suspended all fundraising except for efforts directed at reconstructing the historic structure. By the end of his presidency in 1956, the accumulated operating deficit had ballooned from $64,000 to $518,000.

Survival, and Beyond

Recognizing its tenuous financial situation, Kenyon implemented several belt-tightening measures from 1964 through 1967, while developing a plan to expand enrollment from 750 to 1,250 by establishing a coordinate college for women. This decision not only ensured the College's survival but revitalized it. The forging of the modern Kenyon, however, came at the expense of the endowment. During a period when many institutions were expanding their portfolios, Kenyon focused its resources on the new construction and other institutional costs related to supporting a nascent coed student body.

Much has changed since then. Coeducation is fully established, and generous donors have enabled the College to make significant investments in the endowment-$12 million during "The Campaign for Kenyon" (1984-89) and $44 million during the "Claiming Our Place" campaign (1996-2001). Since 1986, the endowment has grown from $21 million to today's $166 million, nearly an eightfold increase. Prudent management has played a role, as has the expertise and connections of investment committee members, who have given the College unprecedented access to high-yielding private equity funds and other opportunities.

The returns are impressive. But those who tend the endowment are fully aware that impressive returns alone won't provide significant growth. That will come only from new gifts.

How Kenyon Compares

College	Endowment*	Rate of Return*
Grinnell	$1,471,804,000 ($945,000 per student)	9.3%
Williams	1,401,000,000 ($660,537 per student)	12.8
Amherst	1,337,157,518 ($820,846 per student)	18.9
Swarthmore	1,245,281,000 ($844,831 per student)	10.0
Oberlin	678,285,229 ($236,831 per student)	13.2
Macalester	577,100,000 ($304,538 per student)	14.8
Carleton	571,955,038 ($292,112 per student)	10.1
Denison	528,121,000 ($250,294 per student)	13.3
Colby	482,019,000 ($257,600 per student)	12.2
Kenyon	164,597,000 ($100,842 per student)	13.3

*As of June 30, 2005