Given by alumni and friends of MSU, endowment gifts are invested by the university rather than available for spending.

Throughout the past five years, MSU’s endowment investment value has increased on a cumulative basis more than 25 percent, said Glen Klein, MSU’s director of investments and financial management. Only in fiscal year 2009 did MSU’s endowment value suffer with a decline in global investment markets, decreasing for the first time in recent history, Klein said.

“MSU’s 7 percent average annual return … is in the top 3 percent of a group of over 300 endowments monitored by MSU’s investment consultants, Cambridge Associates,” Klein said Friday in an e-mail.

The endowments are an ongoing funding source for MSU, Klein said.

“Always equated with excellence and long-term strength, endowments are absolutely essential if MSU is to remain leaders in education, research and outreach,” he said.

The gifts usually reflect the stock market and the economy, said Robert Groves, vice president for University Advancement.

“(Our alumni and friends’) investments are in the same market as ours,” Groves said. “Their businesses and their retirement accounts have been impacted by the economy. So whether they give to MSU depends on what the economy will look like five years from now or 10 years from now.”

Unlike MSU, most universities suffered a decrease in endowment value in fiscal year 2008 as well as fiscal year 2009, said William Jarvis, managing director and head of research for the Commonfund Institute, a nonprofit investment firm for colleges and universities.

However, endowment values are now on the upswing for colleges and universities as a whole. In a preliminary report issued last week by the Commonfund Institute, the first 80 colleges and universities surveyed by the group showed a significant turnaround in endowment values with endowments increasing about 12.6 percent on average for fiscal year 2010.

The economy is a major factor in the positive trends, Jarvis said.

“The market stopped going down,” he said. “During 2009, the U.S. and international stock markets rebounded significantly. We’ll have the final results at the end of January.”

Although numbers still are pouring in, Jarvis said these initial numbers are solid indicators that higher education institutions are seeing positive results for 2010 endowment levels.

“This is a good year,” he said.

“The numbers represent a healing process. That means some things that had been cut from budgets might be able to be restored.”

Although MSU’s numbers were not included as a part of the preliminary report, Jarvis said he hopes the university will participate in providing its endowment value numbers again this year as they did last year.

Both Groves and Klein emphasized the importance of MSU taking the long-term view in terms of development — whether in terms of alumni giving to MSU in their will or in Spartans providing endowments for new Spartans’ education.

“MSU’s (University Advancement) office works with donors, highlighting the permanent benefit of endowment gifts to MSU,” Klein said.

“MSU has made its need for endowed scholarship funding very clear.”