Annual Report

2018
Indiana university Foundation
Annual Report

Much of the extraordinary impact that Indiana University continues to have on our state, our nation, and regions across the globe is the result of generous private support. On all of our campuses, groundbreaking research addresses society’s most pressing challenges, and life-changing experiences shape our next generation of community and industry leaders. And thanks to the generosity of alumni and friends, Indiana University will continue to be a presence for good for decades to come.

At the IU Foundation, we are committed to securing private funding in support of Indiana University’s mission and stewarding the investments of our supporters. As we reflect on 2018, we have much to celebrate, including a fifth-consecutive record fundraising year. And we are reminded every day that each dollar carries with it a story of those who give and helps to write the next chapter in the lives of those who are positively impacted.

We remain deeply grateful to all who invest in the mission and future of Indiana University, as ours is a charge to build a better tomorrow, for all, for now and forever.

Milton R. Stewart

IUF Board Vice Chairman

Daniel C. Smith

IUF President and CEO

Campaign Update

Cumulative giving to the bicentennial campaign

For All: The Indiana University Bicentennial Campaign is Indiana University’s $3 billion effort to lay a foundation for its next century and beyond. By focusing on four campaign priorities—enabling student success and support; creating the next generation of global leaders; discovering ideas and innovations that change the way we live; and creating a healthier state, nation, and world—we will set the stage for the IU of tomorrow.

From its inception, January 1, 2012, through June 30, 2018, the campaign has received nearly $2.5 billion.

291,625INDIVIDUAL CAMPAIGN DONORS

12,202ORGANIZATIONAL CAMPAIGN DONORS

967,773TOTAL GIFTS TO THE CAMPAIGN

Bicentennial campaign gift allocation

	Category	Percent
	Faculty Support and Research	30.1%
	Student and Academic Support	22.7%
	Facilities, Operation, and Maintenance	10.2%
	Unrestricted	0.8%
	Multiple-Use Funds	36.2%

Campaign gifts support a wide range of IU causes. These causes include faculty support and research; student and academic support; and facilities, operation, and maintenance. In addition, many donors wish to establish multiple-use funds that support more than one of the above areas. These funds allow for flexibility to support multiple restricted purposes over time to meet the greatest need. Unrestricted funds allow IU to address unforeseen areas of need and opportunity.

Fiscal Year 2018 Annual Financial Highlights as Seen Through Our Business Model

The IU Foundation business model includes five key steps that advance our mission of maximizing private support for IU: engage alumni and friends, raise funds, receive funds, invest funds, and utilize funds.

1. ENGAGE ALUMNI AND FRIENDS

The IU Foundation builds and stewards lifelong relationships with current and potential supporters through a wide variety of outreach opportunities.

Snapshot of engagement activities

A year-long calendar of print, digital, and social media communications, including IU Day, a 24-hour worldwide celebration of IU, and Imagine magazine, an annual publication highlighting stories around IU
Women’s Philanthropy, a program that brings women together to give back to IU
Parent Engagement, an effort to engage IU parents in the life and mission of the university
IU Student Foundation, a student organization that shapes the philanthropic leaders of tomorrow
Recognition societies, which honor generous donors for their commitment to and support of IU

Through these initiatives and more, we inspire current and potential supporters to connect their personal and philanthropic values with the mission of IU.

18,808NEW DONORS

2. RAISE FUNDS

Private support for IU comes from all over the world and includes giving from individuals as well as corporations, foundations, and other organizations. During fiscal year 2018, donors gave more than $550 million to IU. This total includes cash gifts, future pledge payments, and revocable and irrevocable planned gifts.

Giving snapshot

111,791

TOTAL DONORS

163,231

TOTAL NUMBER
OF GIFTS RAISED

$550.1M

TOTAL VALUE
OF GIFTS RAISED

$5 to $19.7M

RANGE OF
GIFT VALUE

Giving by location

In fiscal year 2018, most gifts to IU were made by Indiana residents, but donors from all 50 states and nearly 60 countries around the world also gave significant support. This strong global showing is further indication that our mission resonates with donors no matter where they reside.

Sources of giving

	Individuals
	Alumni	28.6%
	Friends	11.8%
	Organizations
	Foundations	26.6%
	Corporations	20.6%
	Other	12.4%

This variety of giving sources illustrates the broad appeal of IU as a place for philanthropic investment. From individuals to corporations, donors of all kinds recognized IU as a place to effect change in 2018.

New endowments

Endowed gifts leave legacies that bolster IU’s mission in perpetuity. By funding research, scholarships and graduate fellowships, faculty chairs and professorships, and other academic programs, endowments preserve IU’s commitment to providing a world-class education for generations to come.

598

TOTAL NEW ENDOWMENTS

416SCHOLARSHIPS & GRADUATE FELLOWSHIPS

48CHAIRS & PROFESSORSHIPS

134OTHER ENDOWMENTS

A fellowship gave IU grad and former refugee Mahja Zeon an opportunity to fight for others.

Planned giving by the numbers

Many donors support the causes that mean the most to them with a gift through their will or trust, or other type of future arrangement. These gifts, known as planned gifts, are usually, though not always, fulfilled after death. Although most planned gifts come from wills or living trusts, other options include life insurance, retirement assets, real estate, and securities. Planned gifts can provide a lasting legacy for IU while yielding certain financial and federal tax advantages. Below are the fiscal year 2018 planned giving results.

$135.2MTOTAL VALUE OF PLANNED GIFTS DOCUMENTED

327Total Number of Planned Gifts Documented

$5K to $10MRANGE OF GIFT VALUE

$41.0MVALUE OF REALIZED GIFTS

3. RECEIVE FUNDS

Donors can choose to support IU in a number of ways beyond cash gifts. From planned gifts and pledges to real estate, securities, and more, donors select gift vehicles that suit their specific needs and goals.

Gifts received by type

	Type	Percent
	Planned Gifts and Pledges	38.8%
	Non-Governmental Grants	36.9%
	Cash	17.1%
	Personal Property	4.6%
	Securities	2.4%
	Real Estate	0.2%

Demonstrating our donors’ strong commitment to IU and long-term philanthropic goals, planned gifts and pledges accounted for nearly 39% of total gifts received.

What a difference a donor makes. Hear directly from some of the students whose lives were forever changed thanks to generous gifts to IU.

Description of the video:

[Music begins.]

[Video: Aerial view from inside the Sample Gates on the Bloomington campus down Kirkwood Avenue of buildings and colorful autumn trees.

[Video: View of student’s hand placing a composition notebook on a desk, and putting red backpack on floor next to chair.]

[Video: Male student wearing a red t-shirt sitting in the grass typing on a laptop resting on his knees with a black backpack sitting on the ground next to him.]

[Video: Two hands unzip a red backpack resting on the floor next to a chair.]

[Video: View looking through laboratory equipment of a male student sitting at a desk writing in a notebook.]

Male Student #1 speaks: Dear Donor

[Video: Female student #1 wearing a blue plaid sweater vest with a white blouse sitting at desk writing in a notebook with a window in the background.]

Female student #1 speaks: Dear Donor

[Video: Left hand resting on a notebook while right hand writes in the notebook.] Female student #2 speaks: Dear Donor

[Video: Shadowy side-view of female #2’s head looking down]

Female student #2 speaks: I am a first-generation college student.

[Video: Close-up view of a small waterfall]

Male student # 2 speaks: A native of tiny Brookville, Indiana.

[Video: Male student #2 wearing red t-shirt sitting next to steps on a grassy hill with laptop propped up on his knees]

[Video: Close up of male student #2 wearing red t-shirt looking at his laptop]

Male student #2 speaks: A town still small enough to confuse spell-check. [Video: Left hand stabilizing a small notebook on a female’s lap while right hand writes with a pen in the notebook]

[Video: Female student #1 wearing red sweater sitting inside the Indiana University Gazebo writing in a notebook resting on her lap.]

[Video: Female student #1 wearing red sweater looks up and gazes outside the IU Gazebo at the landscape.]

Female #1 speaks: A person willing to put all my efforts toward my dream.

[Video: View from the ground up of a person standing on the IU South Bend pedestrian bridge facing the rail looking at the river below.]

[Video: Close-up of female student #3 wearing a blue lab coat over a white turtleneck standing on the IU South Bend pedestrian bridge gazing at the river below.]

Female #3 speaks: I’m a wife, a mother of two, part-time student, hospital volunteer

[Video: View looking up at the glass pyramid-shaped window at the top of the IU South Bend Schurz Library.]

Female #3 continues: and a highly motivated individual.

[Video: Close-up head shot of male student #1 looking down.]

[Video: View expands to male student #1 sitting at a desk inside a lab writing notes in a notebook]

Male student #1 speaks: I’m an only child. I live with my aunt and my grandmother

[Video: Close-up of male student #1’s hands writing in a notebook. Moves to a close-up of male student #1 lifting his head in contemplation.]

Male student #1 continues: due to the passing of my mother in 2008.

[Video: Treetop view of Bloomington campus in the fall with the clock tower rising above all the buildings and trees.]

[Video: Female student #2 wearing a red sweater and a scarf sitting at a high table next to a bank of windows with her laptop open in the IUPUI Campus Center.]

Female student #2 speaks: I grew up on a farm with my mom, my dad, and my younger brother.

[Video: Close-up of female student #2’s hands typing on the keyboard of a laptop. Moves to close-up of female student #2 lifting her head gazing out the window in contemplation.]

[Video: Male student #1 carrying his backpack, walking along a sidewalk lined with trees and a campus building in the background.]

Male student #1 speaks: My career goal is to become a cardiac surgeon.

[Video: Female student #2 walking through an enclosed pedestrian overpass on the IUPUI campus.]

Female student #2 speaks: A physical therapist.

[Video: Male student #2 walking on a campus sidewalk] Male student #2 speaks: A technology consultant.

[Video: Female student #3 walking across the IU South Bend pedestrian bridge with the Schurz Library in the background.]

Female #3 speaks: A radiologic technician.

[Close up view of male student #1 walking with his thumbs tucked into the straps of his backpack and trees in the background.]

Male student #1 speaks: Without your donation I would not be able to afford the cost of higher education.

[Video: View of female student #3 walking across campus with IU South Bend Schurz Library in the background.]

[Video: Close-up of female student #3’s hands writing in a red notebook resting on her lap]

Female student #3 speaks: I had all but given up.

[Video: Female student #3 sitting with legs crossed in a gray chair next to a big window with a blurred view of the IU South Bend pedestrian bridge in the background writing in a notebook.]

[Video: Ground up view of colorful red-leafed tree tops with blue sky and puffy clouds in the background]

[Video: Young girl climbing a rope tower in the park.]

Female student #3 continues: But just when I thought we might not be able to afford the cost of attending college,

[Video: Female student #3 clapping and smiling at young girl climbing the rope tower.]

Female student #3 continues: you gave me a beacon of hope.

[Video: Waist-down view of a woman riding a bike, wearing knee-high black boots, black tights, and a black skirt and red sweater.]

[Video: View expands to show female #1 smiling and riding her bike down a street on the Bloomington campus] Female student #1 speaks: This scholarship eases my pressure, so I don’t need to find another job to support myself. [Video: Ground-up view of tree branch covered with leaves changing color in the fall from green to yellow with rays of sun shining through the branches.} [Video: Close up of male hands folded together with a watch on the left wrist] [Video: View expands to male student #1 sitting on the steps outside a building with hands folded on his knees gazing up.] Male student #1 speaks: Because of you the burden has been lifted. [Video: Ground-up view of IU: FOR ALL Who Fulfill Our Promise banner next to a tree branch of colorful red and gold autumn leaves with rays of sun shining through.] [Video: IU logo on cement pillar] [Video: Ground-up view of IUPUI Campus Center} [Video: Female student #2 riding up an escalator in the IUPUI Campus Center] Female student #2 speaks: And what makes it feel even more special is that the people rooting for me [Video: Female student #2 standing on IUPUI Campus Center rooftop patio gazing out at the campus.] Female student #2 continues: don’t actually know me, [Video: Close-up side-view head shot of female #2 on the rooftop patio looking out at the IUPUI and downtown Indianapolis horizon.] Female student #2 continues: but they still have faith in what I can do. [Video: View from the back of male student #1 carrying a backpack while he walks on a sidewalk next to a campus building. Male student #1 speaks: My ultimate goal in life is to never stop learning [Video: Close up of male student #1 walking along a sidewalk next to campus building with his thumbs tucked into the straps of his backpack gazing up to the right] Male student #1: and to do my absolute best to leave the world in better condition than I found it. [Video: Big red clock on IU Bloomington campus] [Video: Close-up of Indiana University Radiologic Technology patch on the left arm of a blue lab coat.] {Video: Expands to full view of female student #3 walking looking to the right as she walks across the IU South Bend pedestrian bridge with Schurz Library in the background.} Female student #3 speaks: Your generosity will go on to benefit the patients I will treat in the future. [Video: Student wearing a red t-shirt riding a bike through the Sample Gates next to planters filled with colorful mums and orange and red leafed trees in the distance.] [Video: Close-up of male student #1’s hands writing in a notebook. Moves to close-up headshot of male student #2 looking down as he adjusts his glasses.] Male student #1: I only hope that one day you will be able to understand what your gift truly means to me. [Video: Male student #2 wearing a red IU Crimson Guard t-shirt carrying a backpack while walking down a campus sidewalk next to a bike rack filled with bicycles and colorful trees and grassy area in the background. Male student #2 speaks: I hope that one day I can fill your shoes and help someone in a similar situation. [Video: Male student #2 walks across footbridge over stream on Bloomington campus with trees in the background.] Male student #2 continues: For now though I’ll have to settle for saying thank you. [Video: Close-up of male student #2 carrying a backpack and wearing red Crimson Guard t-shirt standing at the base of limestone steps with a blurred image of a student descending the steps in the background.] Male student #2 continues: Sincerely grateful Adam. [Video: Female student #3 wearing a blue lab coat over a white turtleneck shirt standing with arms crossed on the IU South Bend pedestrian bridge with a blurred image of Schurz Library in the background.] Female student #3 speaks: Thank you so much Ashley. [Video: Female student #1 wearing a blue plaid sweater vest and white blouse standing and smiling with arms crossed in front of three ornate windows.] Female #1 speaks: Thanks again. [Video: Close up of Female student #2 wearing red sweater and leopard print scarf] Female #2: Thank you so much Mikayla. [Video: Close up of Male student #1 smiling] Male student #1 speaks: Deepest gratitude George Patrick Hutchins. [Video: IU logo descends.] [Words appear: INDIANA UNIVERSITY FOUNDATION] [Music ends.] [End of transcript]

4. INVEST FUNDS

By taking a disciplined, consistent, and diversified approach to investing funds, the IU Foundation generates steady, long-term funding for the university’s people, places, and programs.

Endowment performance over time

IUF has built a broadly diversified portfolio with a strong equity (ownership) bias, striking an optimal balance of providing long-term growth with acceptable levels of volatility. This chart illustrates the growth of an endowed scholarship from its initial funding of $100 thousand in 1989 along with the cumulative value of earnings distributed to support scholarships. This endowed scholarship would have paid out more than $228 thousand by 2018.

Pooled long-term investment growth

The pooled long-term investment portfolio holds nearly $2.3 billion in assets. The current size of the portfolio reflects the combination of generous gifts and effective investment strategy. While each is a source of pride, the focus is on growing the asset base, which translates into increased support to IU students, faculty, and programs.

Investment performance

IUF’s investment performance has exceeded the long-term objective of maintaining purchasing power over time. Since its inception (1989), the portfolio has posted an average annual return of 8.9%, consistently surpassing both internal goals and the performance of most peer institutions.

Pooled long-term investment asset allocation

	Category	Percentage
	Public Equity	43.7%
	Hedge Funds	18.3%
	Private Equity/Venture Capital	17.9%
	Real Assets	13.4%
	Fixed Income & Cash Equivalents	6.7%

Beyond the benefits of proper diversification, asset allocation decisions are designed to emphasize the most attractive opportunities and to provide exposure to various investments that perform well in different economic environments.

5. UTILIZE FUNDS

In 2018, The Chronicle of Philanthropy recognized Indiana University as one of America’s top 50 favorite nonprofits, ranking IU seventh among public universities. This is undoubtedly due, in part, to the breadth of ways donors can make a philanthropic impact through IU.

Private support is directed as donors wish, benefitting students, faculty, research, facilities, and areas of critical need. But the story doesn’t end once funds are distributed; it continues in the innovations, student successes, and global impacts the gifts make possible.

You can see that impact in the 171 inventions and 141 patents filed by IU researchers in fiscal year 2018 alone; in the tens of thousands of students who earned a world-class IU degree; and in national rankings that name IU schools and programs No. 1 for music, public affairs, business, and more. The benefits of private support are truly profound.

Innovative IU research is helping in the early detection of concussions.

Use of funds

	Category	Percent
	Student and Academic Support	45.8%
	Faculty Support and Research	23.8%
	Facilities, Operation, and Maintenance	20.2%
	IU Auxiliaries	7.2%
	Public Service and Extension	3.0%

*The chart above excludes private non-governmental grants used primarily for research and instruction.

Funds utilized each year are made available from the earnings on donor-restricted endowments combined with donor annual giving. During fiscal year 2018, with nearly 70% of the funds made available directed to student, faculty, research, and academic support, it is clear that pursuing excellence in world-class education, research, and scholarship is the greatest priority for IU donors.

Our Heartfelt Thanks

Thank you for reviewing the IU Foundation’s annual report.

Private support makes so much possible at Indiana University: the dream of an IU education, life-changing research and discovery, and a near 200-year tradition of serving the community near and far. From IU’s humble beginning to its current status as a multi-campus, internationally renowned university, the commitment of its alumni and friends has been paramount. If the past year is any indication, the future of IU looks bright.

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