University endowment grew by $330 million, Comptroller’s latest financial report reveals
Money in natural resources decreased by $147 million, including in fossil fuels.
USC’s endowment grew by more than $330 million in the past year, according to the latest financial report from the University Comptroller. The endowment, which saw a net increase to $7.7 billion from $7.4 billion in the previous report, saw growth in all categories of investment except “natural resources partnerships,” which lost $147 million after the Board of Trustees decided to pull back its assets in fossil fuels in February 2021.
The new report also revealed that, for the first time since the coronavirus pandemic began, USC received no pandemic-related grants from the federal government. The previous year, USC reported $11.7 million in grant revenue to the University, $31.9 million in grants to the USC Health System and $41.7 million in deferred Social Security taxes.
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In the past ten years, year-over-year changes in endowment have ranged between -8% and 11% — with the exception of fiscal year 2021, which saw a 37% year-over-year increase that USC attributed to endowment performance and donor generosity.
The “natural resources partnerships” that saw scale-backs this year encompass the fossil fuel investments the board voted to liquidate, as well as other infrastructure and commodity investments, including energy, power and timber, Chief Investment Officer Amy Diamond wrote in a statement to the Daily Trojan.
The total value of USC’s net assets increased by over $523 million between fiscal year 2022 and fiscal year 2023. The greatest increase came when USC acquired Methodist Hospital of Southern California in July 2022, renaming it to USC Arcadia Hospital.
In addition to the $488 million value of Arcadia hospital changing hands, USC gained an additional $47 million from the value of land leased to the University by the city of Arcadia for $1 annually through the year 2121
The report also disclosed information on the University’s lease for a medical office building under construction in Pasadena. Under the lease agreement — which went into effect last July — the University will have the right to purchase the building between the 18th and 20th year of the lease without the landlord being able to sell to a third party.
Those expansions will allow the University Health System to better serve a larger group of patients, said Erik Brink, senior vice president of finance and chief financial officer at USC.
“When you’re in [the healthcare] industry, you’re always looking for what are the opportunities to enhance care,” Brink said in an interview with the Daily Trojan. “Quite frankly, it works well for both. There’s a continued consolidation in the health industry to make sure that you’re providing the best care that you can.”
The acquisition of what is now Arcadia Hospital allows USC students to also gain access to its services under the University’s Student Health Insurance Plan, in addition to the residents of Arcadia.
Anika Ricks, a junior majoring in sociology, said the USC hospital system can be particularly important for out-of-state students.
“I’m from California, but a lot of people are from out of state so they don’t have access to their parents’ health care, their hometown health care,” Ricks said. “To have health care in the area is great.”
Contributions to the University saw the largest increase from fiscal year 2023 of any category of USC’s operating revenue, rising 59% to total $386 million.
USC received contributions from more than 135,000 individual donors in fiscal year 2023, wrote Scott Rabenold, senior vice president of advancement, in a statement to the Daily Trojan. The University then pushed those contributions to President Carol Folt’s declared “moonshots, including computing, health sciences, sustainability, and athletics.”
University expenses rose from just over $6.07 billion to nearly $6.98 billion between fiscal year 2022 and fiscal year 2023. Though expenses rose in all categories, the greatest increase occurred in operating expenses, which includes office supplies, communications, travel and other costs necessary to maintain business operations.
For fiscal year 2023, the University reported nearly $6.9 billion in operating revenue, $802 million more than the preceding period.
The largest share of the University’s operating revenue came from the USC Health System at 41.43%, earning just over $2.85 billion. Tuition and student fee revenue was the second-largest portion of operating revenue at 25%.
However, student tuition and fee revenue increased the least of all revenue categories — up only $1.6 million from the year before and a 3% smaller share of total operating revenue than fiscal year 2022 — even as students saw their tuitions raised by 5% for the 2022-2023 school year.
Brink said that tuition and student fee revenue remained relatively unchanged because of increases in total student financial aid awards and the volume of enrolled students.
For fiscal year 2023, the University reported awarding nearly $763 million dollars in financial aid, an increase of $38 million from the previous year.
In a statement to the Daily Trojan, the Financial Aid Office wrote that the increase in financial aid was attributable in part to “the lingering effects of the pandemic, along with the Affordability Initiative.”
Olivia Orlowski, a freshman majoring in psychology who resides on the East Coast, said the financial aid offered by the University was a significant factor in her decision to attend USC.
“If they didn’t give me the amount they gave me, I wouldn’t have come here at all,” Orlowski said.
