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Investment Office

Supporting Swarthmore's Mission

Department Overview

Frequently Asked Questions

What is the endowment?

The endowment is a pool of investments made up of gifts and bequests by donors, funds allocated by the College, and accumulated interest, dividends, and capital appreciation. Donors have contributed funds to the endowment that support buildings, equipment, collections, professorships, scholarships, awards, general operating expenses, and more. The endowment, which grows over time, contributes in perpetuity to the operating budget of the College and safeguards the institution from economic and political forces.

Who manages the endowment?

The Board of Managers reviews and approves investment policies annually. In conformity with those policies, the Investment Committee of the Board sets the asset allocation; approves the selection of investment managers and partnerships (not individual securities); and monitors and evaluates performance of the endowment and the investment managers. The Investment Office works collaboratively with the Investment Committee to meet their goals. The Finance Committee of the Board determines spending.

How are distributions calculated?

Swarthmore uses a growth-based formula to calculate endowment spending. The spending rate varies from year to year within a target range of 3.5%–5%. In Fiscal Year 2023, the budgeted rate was 4.33%. The spending rate is applied to the endowment’s value on a quarterly basis, and distributions are made based on the previous quarter’s value (e.g. the December distribution is based on September’s units).

What happens to endowed gifts?

When endowed gifts are received, they are allocated to the endowment at the previous quarter’s market value per unit. Funds are pooled for investment purposes but tracked individually. 


The endowment is made up of gifts from donors, funds allocated by the College, and accumulated interest, dividends, and capital appreciation. Original endowment contributions totaling $531 million were worth more than $2.7 billion on June 30, 2023.

Annualized Rates of Return with Benchmarks

SWARTHMORE COLLEGE 4.2% 13.4% 10.0% 9.4%
HEPI + 4.25% 8.8% 8.4% 7.7% 7.2%

The Commonfund Higher Education Price Index (HEPI) is an inflation index designed specifically to track the main cost drivers in higher education. It measures the average relative level of prices in a fixed basket of goods and services purchased by colleges and universities each year through current fund educational and general expenditures, excluding research. The Investment Committee uses HEPI as a long-term measure of the endowment’s ability to support the College’s present and future operations.

Callout One

Provide a sustainable level of distribution in support of the College’s operating budget

Asset Allocation

A balanced asset allocation reflects the College's dual needs of liquidity and growth. The asset allocation as of June 30, 2023 was approximately:

Domestic Equity includes investments in publicly-traded stocks of companies domiciled in the U.S.
International Equity includes investments in publicly-traded stocks of companies domiciled in international countries.
Alternative Strategies includes investments in corporate direct lending, financial assets and distressed debt, and absolute return hedge funds.
Private Equity includes investments in privately-held companies including leveraged buyout and venture-backed companies that are domiciled in the U.S. or in international countries.
Real Assets includes investments in real estate and natural resources.
Fixed Income, Cash, and Cash Equivalents includes investments in fixed income securities, such as U.S. Treasury bonds and Treasury Inflation-Protected securities.

The endowment is invested through external managers and partnerships. The Investment Office does not select individual securities across any asset class.

Image Callout Two

Attain a strong total return over the long-term to preserve the real purchasing power of the endowment

How Much of the Budget Does the Endowment Cover and What Does It Support?

The endowment provides the largest source of revenue for the College through an annual distribution. Donors who have supported the endowment continue to make a perpetual impact on Swarthmore. In Fiscal Year 2023, the operating revenue budget, including debt service, was $200.7 million. The endowment distributed $111.2 million, or 55.0% of College operating revenue.


Sources of College Revenues (millions of dollars)

Areas Supported by the College Endowment

Learn more about how you can support the endowment