Letter from the President
This past fiscal year was filled with newsworthy events and significant transitions for both the University System of Maryland (USM) and the USM Foundation. Perhaps most noteworthy to the Foundation was a changing of the guard, with Dennis Wrasse stepping down after two years as chair, and Bonnie Stein succeeding him. The Foundation, the USM, and the leadership at our USM institutions continue to work together to encourage philanthropy and to engage more than one million alumni living worldwide.
Not surprisingly, the highest concentration of USM alumni resides in Maryland (70 to 80%). With this in mind, the USM and the USM Foundation hosted a regional event in April at the Maryland Zoo in Baltimore. More than 2,700 USM alumni, family and friends attended the event and enjoyed an evening of camaraderie, animal exhibitions, and rides. We hope you will enjoy the pictures of this great event that appear on page three of the Annual Report, that you may download on this page.
In FY17, we travelled throughout the state to visit USM institutions. We were impressed by the fantastic fund-raising efforts underway, which will undoubtedly help our campuses and the community at large. On pages four and five of the Annual Report, you will find a spotlight on a key campaign priority, endowment. As you will see, building endowment sets a cycle in motion that perpetually turns. Just as rain and sun allow flowers to bloom, our endowments grow and serve our students, faculty, staff, and future generations of the USM.
Investment performance in FY17 was also a highlight of the year. The endowment portfolio ended the fiscal year with a +12.9% return, its policy benchmark experiencing a +10.5% return — with the endowment outperforming expectations by approximately +240 basis points. Additionally, the endowment outperformed its policy benchmark on a three-year and five-year basis by roughly 240 basis points and 100 basis points, respectively. We are pleased with the defensive nature of our portfolio, as it exceeded our expectations, protecting capital during moments of market uncertainty while also participating with markets during their upward movement. Of particular note, the endowment posted positive results in every month throughout FY17. The operating portfolio ended the fiscal year with a +5.2% return, outperforming its policy benchmark on a one-, three-, and five-year basis. Similar to the endowment, the operating portfolio demonstrated positive results in all months throughout FY17.
During FY18, we look toward initiating a new strategic planning process that will propel the work of and solidify the future of the Foundation, and effectively complement and support the strategic plan of the USM. In our most recent strategic plan, our goals were to steward private support, build a culture of philanthropy, and share expertise and best practices within the USM and nationally. We met these goals by growing endowment through investment returns, providing fundraising leadership to our campuses, offering a wide array of professional development efforts to staff within the USM, and increasing the Foundation’s national stature among peers through speaking invitations and sharing expertise at conferences.
As always, we are sincerely grateful to the donors and friends of our institutions throughout the USM. We also remain thankful to our dedicated board members for their hard work in sustaining the important work of the Foundation year after year.