History of the Endowment

One of the key events in the history of the University of Cincinnati was Charles McMicken’s 1858 donation of his estate, estimated at $1 million in value (worth over $25 million today), to the City of Cincinnati to establish an educational institution. McMicken’s bequest fulfilled his life’s ambition by helping UC establish its liberal arts programs. It also established the transformative power of the University’s Endowment and continues to represent a bedrock of the Endowment today, 165 years later.

archive photo of McMicken Hall

Prior to joining the state university system of Ohio, the investment of the Endowment’s main pool of assets (created in 1934 and called “Fund A”) was outsourced to third parties. In 1976, the Endowment management was brought in-house under an Administrative Investments Committee led by UC Vice President of Finance, Sigmund Ginsburg; Controller, Gordon Penning; and economics professor, Tim Johnson. Joining the State University system also prompted UC to form the University of Cincinnati Foundation (the “Foundation” or “UCF”) to cultivate private donations.

During the late 1980s and 1990s, the University’s spending approach was modernized, from a policy of spending current income on the portfolio, to a policy of 6% of the trailing 3-year average value and subsequently reduced to 5% of the 3-year average. During this period, the Administrative Investments Committee continually increased the diversification of the Endowment’s assets.

In 2001, UC and the UC Foundation agreed to commingle the two organizations’ assets into Fund A and unitize the fund (similar to mutual fund structure). Commingling and unitization resulted in a coordinated investment structure, investment management fee savings, and administrative efficiencies.

In 2005, UC established an investment office and hired Thomas Croft as the University’s first Chief Investment Officer. Mr. Croft served until 2011 when he retired and was replaced by the current CIO, Karl Scheer. Mr. Scheer has continued Mr. Croft’s foundational work in restructuring the Investment Committee governance structure, establishing and refining the investment process, hiring experienced staff, further diversifying the holdings of Endowment Fund A, migrating the portfolio from funds of funds to direct investment in funds, and creating a thorough and specific investment policy statement to guide the program. In 2011, UC also made a significant investment in the operational components of the Endowment’s investment program, hiring Treasurer, Gary Hunt; establishing a new position, Assistant Treasurer in charge of Investment Operations, Reporting, and Compliance; and moving the Endowment’s and Temporary Investment Pool’s custody to a single master record keeper and custodian.

Three decades of improvements to investment process and governance structure have been critical in providing UC’s endowment funds with the top tier stewardship that the University’s supportive community demands and deserves. Together, UC’s generous donors and strong internal stewardship have been instrumental in building the Endowment’s asset base from $70 million in 1977 to over $1 billion today.