Digging into Catlin’s endowment
By Lewis Anderson ‘24
Graphic by Harper Davis ‘24.
The endowment is critical for Catlin Gabel School’s daily operations. Without it, Catlin could not afford all its current programs except by raising tuition.
The endowment is basically a big pot of money that Catlin invests. Every year Catlin will withdraw about 4% of the money in the endowment to support the operating budget, funding things like the outdoor program and financial aid which Catlin could not otherwise afford.
Of Catlin’s 29 million dollar annual operating budget for the 2023-2024 school year, 1.7 million dollars comes from the endowment. Another 2.1 million dollars comes from the Catlin Gabel Fund which is made up of donations to fill the gap in the budget. This means a total of 3.8 million dollars, around 13% of the budget, comes from donor support.
The rest of the budget comes from tuition.
The endowment is made up of a variety of funds, some of which are earmarked by their donor for specific purposes or programs. The majority of the endowment is used to support financial aid and the second largest use of the endowment is supporting professional development. However, the endowment also supports a variety of other programs such as outdoor education, libraries, and athletics.
The Board of Directors and the Endowment Committee control the endowment and set guidelines for the outside investment firm that manages the endowment, Angeles Investments. Angeles is a registered B Corporation, which are “companies verified by B Lab to meet the high standards of social and environmental performance, transparency and accountability.”
Angeles invests most of the endowment through different investment managers. Angeles “goes through an entire process to review if they are aligned from a responsible investing and DEI perspective,” said the Outsourced Chief Investment Officer with Angeles Investment Derek Kellman. “We’re checking to see if they are investing in a responsible way.”
“DE and I is important to us because we believe that diverse teams …[are] higher performing teams,” Kellman said.
The higher return of diverse teams supports the goal of the endowment, which “is to support the operational and programmatic needs of the school,” said Kellman.
The endowment is designed to exceed the school’s annual spending and inflation rate over the long term. Ultimately, the goal is for the endowment to generate intergenerational equity, which is the value of the endowment growing or staying stable against inflation and spending.
The endowment has returned since its inception in June 2002 an annualized return of 6.8% net of fees, beating its investment policy benchmark return of 6.1%. This has allowed Catlin to meet its goals for the endowment.
When Catlin began working with Angeles in 2002, the endowment was 12.7 million dollars, which is worth about 23.5 million dollars in 2024 adjusted for inflation. Since then, 21.6 million has been contributed to the endowment and 30.4 million has been withdrawn. The endowment is now about 41 million dollars.
Catlin has not invested very much in fossil fuels or renewable energy, which are relatively small markets compared to the entire market. Fossil fuel investments represent about 2% of Catlin’s endowment, and renewable energy investments represent less than 1% of the endowment.
Catlin does not make any direct investments in fossil fuels, it gets most of its fossil fuel exposure from owning part of the S&P 500 ETF. ETFs are funds that include many different stocks. If you want to buy part of an ETF, you are investing in all the companies in it, and you can’t exclude any of them.
The endowment also gets its exposure to clean energy through the different funds it has invested in; it does not have direct investments in renewable energy or sustainable investments.
This is because “we don't have specific objectives for the Catlin endowment as tied directly towards sustainable objectives,” Kellman said. “Over the last 10 years, the ACWI ETF (global equity market) has outperformed ICLN ETF (clean energy) by 4.5% annualized.”
As the goal of the endowment is to generate returns that are better than the overall market’s returns, Angeles has not invested in clean energy as it “believes that direct clean energy investments are not yet suitable in helping generate returns needed to achieve the endowment’s investment objectives,” Kellman said.
“The biggest issue for me is that Catlin is not acting like climate change is an issue we are partly responsible for or that we have a responsibility in correcting,” said Environmental Action Team member Ari Wilda. “In divesting from companies investing in sustainable resources … we are actively promoting the fact that we do not see this as an immediate issue that is of any concern to us.”
A small part of the endowment is also used for sustainability purposes at Catlin. There is a fund with 50 thousand dollars pledged to it to provide a stipend for the director of the Catlin Gabel Sustainability Team. The intent behind this is “to make it so that this is always a position, there is always someone who oversees this, meaning this will always be a priority for the school,” said the Director of Advancement at Catlin, Nicole Rinetti-Clawson.
One of the goals of the ongoing Eagles Soar campaign Catlin is currently running is to increase the endowment by ten million dollars. Of that goal, so far 5.8 million dollars have been raised or pledged.
If more money was donated to this sustainability fund, its scope could be expanded to support operational programs with sustainability purposes like installing solar panels, increasing energy efficiency, adding more native plants around campus, and so much more.