The rate of return on endowments for higher education institutions rebounded from last year’s historic lows, a recent study found.

The National Association of College and University Officers, or NACUBO, conducted the study and sampled more than 850 U.S. colleges and universities.

The turnaround for endowments is a welcome sign for the higher education community and would like to see the results repeat in 2011, NACUBO President John S. Griswold said in a news release.

“After a strong first half of the 2011 fiscal year, we are hopeful that good results in the 2010 fiscal year will be repeated for the current year and return endowments to the solid footing needed,” Griswold said.

Last year, the national average for the rate of return on investments for endowments was -18.7 percent. Nikki Krawitz, Vice President for Finance and Administration for the UM System, credits the Finance and Administration division for adopting an asset allocation policy for Missouri beating the national average.

“We did better than the national average in FY2009,” Krawitz said. “The university saw returns of -17.5 percent. When the stock market was struggling, our policy of low risk investments allowed us to do better than the economic downturn.”

The success of the endowment helps students and faculty at MU, Krawitz said.

“Our 1.2 billion-dollar endowment benefits students because as donors make a gift to the university, it helps to fund scholarships and to increase the amounts of scholarships,” Krawitz said. “These gifts are perpetual benefits, meaning they will continue to grow over time and will continue to give more over time.”

Last year MU endowment struggled and missed the national average, though Krawitz says the results were extremely close: MU’s endowment rate of return for fiscal year 2010 was just below the national average at 11.4 percent, Krawitz said.

To calculate the strength of each institution’s endowment, the NACUBO uses a formula that compares institutional spending, university gifts and donations, debt and operating costs.

MU reported an increase in donor contributions in fiscal year 2010, and 60 percent of the nation’s colleges and universities reported a decrease. The university’s funding in fiscal year 2009 was $101.5 million. In fiscal year 2010, the funding and donor gift levels were $107.7 million.

Every fiscal year, the Finance and Administration division creates an asset allocation policy for MU to select investments that meet the goal of maximized return.

“We look for investments that provide a minimum risk for a maximum return,” Krawitz said. “We look for long term investments. We try to do better than the downturn and do better than the upturn. We do this through a diverse asset allocation.”