Earlier this year, Commonfund, in partnership with the National Association of College and University Business Officers (NACUBO), released the 2025 NACUBO-Commonfund Study of Endowments (NCSE). The Study examines investment performance, governance and management practices at hundreds of U.S. higher education endowments and related foundations over the July 1, 2024 – June 30, 2025 fiscal year (FY25).
Following the release of the FY25 study, Commonfund did a deep dive into results from the 10 participating Historically Black Colleges and Universities (HBCUs). Below is a comparative analysis of these institutions and the 657 total respondents from the full NCSE report. Note: Additional types of schools surveyed in the full report are private colleges and universities, public colleges and universities, institutionally-related foundations (IRFs) and combined endowment/foundations. Detailed analysis of these is included in the full report.
HBCUs accounted for $2.4 billion of the reported $944.3 billion in assets represented in the full FY25 Study, with an average endowment size of $236.7 million vs. $1.4 billion respectively.
THE TOP-LINE RESULTS
Performance
Returns for all time horizons reported in the Study were positive across both groups for all institution sizes. The 10 HBCUs participating in this year’s Study reported a 10.2 percent average 1-year return vs. 10.9 for the total NCSE respondent’s cohort. Three-, five- and 10-year average returns for HBCUs were reported as 9.6, 10.5 and 8.3 percent, respectively, vs. 10.0, 10.2 and 7.7 percent for total NCSE respondents over the same time periods. Note: There was insufficient data to report longer-term returns for the HBCU group.
Asset Allocation
Participating HBCUs reported an overweight to U.S. equities more than double that of the NCSE total respondents (28.0 percent vs. 13.7 percent), and an overweight to fixed income (17.2 percent vs. 10.7 percent). Notable underweights included private venture capital (6.8 percent vs. 12.2 percent), private equity (12.5 percent vs. 16.8 percent), and marketable alternatives (11.8 percent vs. 15.4 percent).
Spending
Responding HBCUs reported an annual effective spending rate of 3.4 percent, compared with 4.9 percent for total NCSE respondents. Looking at spending policy, the most frequently reported spending methodology being used is a percentage of a moving average, 90.0 percent of responding HBCUs reported using this method, while 74.3 percent of total NCSE respondents did so. The average percentage of a moving average targeted by this spending policy was 4.7 percent for HBCUs and 4.6 percent for total schools.
Gifts
FY25 marked a decline in total and average new gifts to endowments reported by total Study participants – and by HBCUs. Total gifts to the 657 NCSE respondents in FY25 were $13.9 billion, down from $15.4 billion reported for FY24. HBCUs’ total reported gifts fell to $67.7 million in FY25, from $91.9 million in FY24. Meanwhile, average gifts for total respondents were $22.6 million in FY25 (from $24.8 million in FY24) and HBCUs average gifts were $7.5 million (from $9.2 million).
Operating Budget Support
A plurality of total respondents to the FY25 NCSE reported a year over year increase in the percentage of operating budget funded by the endowment – 42.8 percent – while 37.5 percent reported a decreased rate of support to the operating budget. The average percentage of total schools’ operating budgets funded by endowments in FY25 was 15.2 percent, meanwhile for HBCUs that figure was 19.5 percent. However, there are typically outliers that fund a disproportionately high share of their operating budgets from their endowment, which is demonstrated by the disparity between average and median values: Median values were 4.0 percent for HBCUs and 6.1 percent for total respondents.
We hope these top-line insights will serve as a guidepost for your own analysis into these important topics and we encourage you to read the Study in its entirety to best evaluate your performance vs. your benchmark or peers.
